Interim Board of Directors' Report for 3Q2023

Interpump Group S.p.A. and subsidiaries

Interim Board of Directors' Report at 30 September 2023 – Interpump Group

Page

Composition of Corporate Bodies	5
Interpump Group Organization Chart at 30 September 2023	7
Interim Board of Directors' Report:
- Directors' remarks on performance in 3Q2023YTD	11
- Directors' remarks on performance in 3Q2023	21
Financial statements and notes	27

This document can be accessed on the Internet at: www.interpumpgroup.it

Interpump Group S.p.A.

Registered office in S. Ilario d'Enza (Reggio Emilia), Via Enrico Fermi 25 Paid-up Share Capital: Euro 56,617,232.88 Reggio Emilia Companies Register - Tax Code 11666900151

Interim Board of Directors' Report at 30 September 2023 – Interpump Group

Board of Directors

Fulvio Montipò Executive Chairman

Giovanni Tamburi (b) Deputy Chairman

Fabio Marasi (d) Chief Executive Officer

Antonia Di Bella (a) (c) Independent Director

Nicolò Dubini (a) (c) Independent Director

Marcello Margotto (b) Independent Director Lead Independent Director

Federica Menichetti (a) (b) (c) Independent Director

Roberta Pierantoni Independent Director

Rita Rolli (d) Independent Director

Anna Chiara Svelto (d) Independent Director

Board of Statutory Auditors

Anna Maria Allievi Chairman

Mario Tagliaferri Statutory Auditor

Mirco Zucca Statutory Auditor

Independent Auditors

PricewaterhouseCoopers S.p.A.

(a) Member of the Audit and Risks Committee (b) Member of the Remuneration Committee and the Appointments Committee (c) Member of the Related Party Transactions Committee (d) Member of the Sustainability Committee

Interim Board of Directors' Report at 30 September 2023 – Interpump Group

Interim Board of Directors' Report

Directors' remarks on performance in the first nine months of 2023

PERFORMANCE INDICATORS

The Group uses several alternative measures that are not identified as accounting parameters in the framework of IFRS standards, to allow better evaluation of the trend of economic operations and the Group's financial position. Such indicators are also tools that assist the directors in identifying operating trends and in making decisions on investments, resource allocation and other business matters. Therefore, the measurement criterion applied by the Group may differ from the criteria adopted by other groups and hence may not be comparable with them. Such alternative performance indicators are constituted exclusively starting from the Group's historical data and measured in compliance with the matters established by the Guidelines on Alternative Performance Measures issued by ESMA/2015/1415 and adopted by Consob with communication no. 92543 of 3 December 2015. These indicators refer only to performance in the period illustrated in this Interim Board of Directors' Report and the comparative periods and not to expected performance and must not be taken to replace the indicators required by the reference accounting standards (IFRS). Finally, the alternative indicators are processed consistently, using the same definitions and presentations for all periods for which financial information is included in this Interim Board of Directors' Report.

The performance indicators used by the Group are defined as follows:

Earnings/(Losses) before interest and tax (EBIT): Revenues plus Other operating income less Operating costs (Cost of sales, Distribution costs, General and administrative expenses, and Other operating costs);
Earnings/(Losses) before interest, tax, depreciation and amortization (EBITDA): EBIT plus depreciation, amortization, writedowns and provisions;
Net financial position: the sum of Loans obtained and Bank borrowing less Cash and cash equivalents;
Net indebtedness: the sum of the Net financial position and Debts for the acquisition of equity investments;
Capital expenditure (CAPEX): the sum of investment in property, plant and equipment and intangible assets, net of divestments;
Free cash flow: the cash flow available for the Group, defined as the difference between the cash flow deriving from operating activities and the cash outflow for investments in tangible and intangible fixed assets;
Capital employed: calculated as the sum of shareholders' equity and net financial position, including debts for the acquisition of equity investments;
Return on capital employed (ROCE): EBIT / Capital employed;
Return on equity (ROE): Net profit / Shareholders' equity.

The Group's income statement is prepared by functional area (also called the "cost of sales" method). This form is deemed to be more representative than its "type of expense" counterpart, which is nevertheless included in the notes to the Annual Financial Report. The chosen form, in fact, complies with the internal reporting and business management methods.

The cash flow statement was prepared using the indirect method.

Consolidated income statements for the first nine months

(€/000)	2023	2022
Revenues	1,720,442	1,544,939
Cost of sales	(1,113,270)	(1,008,462)
Gross industrial margin	607,172	536,477
% of revenues	35.3%	34.7%
Other operating income	31,225	32,167
Distribution expenses	(125,783)	(116,277)
General and administrative expenses	(161,194)	(146,991)
Other operating costs	(4,431)	(15,243)
EBIT	346,989	290,133
% of revenues	20.2%	18.8%
Financial income	20,332	26,274
Financial charges	(49,555)	(25,171)
Equity method contribution	484	115
Profit for the period before taxes	318,250	291,351
Income taxes	(77,684)	(76,618)
Consolidated profit for the period	240,566	214,733
% of revenues	14.0%	13.9%
Attributable to:
Shareholders of Parent	238,202	212,557
Minority shareholders of subsidiaries	2,364	2,176
Consolidated profit for the period	240,566	214,733
EBITDA	425,639	365,123
% of revenues	24.7%	23.6%
Shareholders' equity	1,773,063	1,497,751
Net financial position	526,138	603,753
Debts for the acquisition of equity investments	75,116	53,282
Capital employed	2,374,317	2,154,786
Unannualized ROCE	14.6%	13.5%
Unannualized ROE	13.6%	14.3%
Basic earnings per share	2.228	2.013

SIGNIFICANT EVENTS IN THE FIRST NINE MONTHS

After a better start to 2023 than was expected, given the fall in energy prices and the re-opening of China, the forecasts for global growth have moderated.

The effects of the restrictive monetary policies adopted in recent months have become increasingly visible, both in the United States and in Europe, with business and consumer confidence starting to sag.

Economic activity in China is hampered by heightened difficulties in the real estate sector and by deflationary risks, requiring the implementation of economic support policies that might not prove to be entirely successful.

Internationally therefore, leading countries find themselves at different stages in their economic cycles, with rising uncertainty about whether or not the inflation rate will continue to slow.

This last factor is affected by the upturn in energy commodity prices, spurred in part by recent geopolitical tensions in the Middle East.

Despite current uncertainties in the macroeconomic environment, the Interpump Group continues to report excellent results.

In this context, the limited exposure to countries involved in the Russia-Ukraine conflict is confirmed. Specifically, € 16.5 million was invoiced to customers in Russia, Belarus and Ukraine during the first nine months of 2023, with outstanding receivables at 30 September 2023 of € 1.9 million.

Revenues reached € 1,720.4 million, up by 11.4% compared with 3Q2022YTD when they totaled € 1,544.9 million. Analysis by business sector shows that revenues in the Hydraulic Sector rose by 10.5% with respect to 3Q2022YTD, while those in the Water-Jetting Sector were 14.0% greater.

EBITDA was € 425.6 million (24.7% of revenues). In 3Q2022YTD EBITDA amounted to € 365.1 million (23.6% of revenues), so 16.6% growth was achieved.

Net profit was € 240.6 million in 3Q2023YTD (€ 214.7 million in 3Q2022YTD), up by 12.0%.

The Group continues to monitor and manage inventories with great care, while pushing ahead with major planned investments. Despite this and thanks to a more than proportionate reduction in working capital, the free cash flow generated during 3Q2023YTD totaled € 100.7 million, compared with € 22.5 million in the first nine months of 2022.

The net financial position at 30 September 2023 totals € 526.1 million (€ 603.8 million at 30 September 2022), primarily after paying dividends of € 34.4 million and making net investments of € 57.4 million to acquire equity investments and residual minority interests.

Compared with 3Q2022YTD, the consolidation now includes Eurofluid Hydraulic S.r.l., which was acquired in October 2022 and consolidated in full from 31 October 2022.

Again in the Hydraulic sector, on 20 February 2023 Interpump Group announced the acquisition of 85% of the capital of Indoshell Automotive System India P.L. (now IPG Mouldtech India Pvt Ltd.). This company was previously owned by Indoshell Mould Limited, an Indian Group specialized in the smelting of ferrous and non-ferrous metals (cast iron and aluminum). Company output is expected to total about 8,000 tonnes by the end of 2023, with estimated revenues of about € 12 million and an EBITDA of about € 2 million. The value of this operation was fixed at around € 8 million and put option mechanisms were defined, through which Interpump Group can acquire the remaining 15% interest from Indoshell Mould Limited. The company has been consolidated on a line-by-line basis from 31 March 2023 and, therefore, has contributed to the consolidated results for six months.

Minority interests in a number of companies were acquired during 3Q2023, specifically in: Hangzhou Transtecno Power Transmission, thus raising Group ownership to 100% (from 72%), as well as in Transtecno Iberica and MA Transtecno S.A.P.I., which are now both 70% owned (up from 50.4%).

During the period, agreement was also reached for the partial early exercise of the options to purchase/sell the minority interests in Hydra Dyne, which is now 89.99% owned. The related "put and call" mechanisms were also redefined, enabling the counterparties to purchase/sell the remaining 10.01% equity interest following approval of the 2028 financial statements.

With regard to the Water-Jetting sector:

On 20 April 2023, the Group announced the acquisition of 70% of the capital I.Mec S.r.l., which specializes in the production of mechanical sifters and vibrating devices for the granulometric selection of materials, mainly for industries active in the ceramics, recycling, filtration, food processing and cosmetics sectors. The company closed 2022 with revenues of about € 17 million and an EBITDA margin of around 23%. The value of this operation has been fixed at approximately € 14 million and "put and call" mechanisms have defined, through which the counterparties can purchase and sell the remaining 30%.

On 18 May 2023, the Group announced acquisition of the entire capital of the Waikato Group that, with more than 50 years of history, leads the automated milking market in New Zealand and Australia. This reflects the constant development and technological innovation that has enabled progression from the design and production of components in the late 1970s, to the current offer of automated and integrated systems. The company closed 2022¹ with revenues of almost NZ\$ 80 million (about € 48 million) and an EBITDA margin of around 14%. The total value of the transaction was set at about € 30 million.

Both new acquisitions have been consolidated on a line-by-line basis from 31 May 2023 and, therefore, have contributed to the consolidated results for four months.

¹ Financial year from April 2022 to March 2023

REVENUES

Revenues in 3Q2023YTD totaled € 1,720.4 million, up by 11.4% compared with € 1,545.0 million in the same period of 2022 (+8.8% at unchanged perimeter and +10.4% also net of exchange differences).

Revenues by business sector and geographical area were as follows:

		Rest of	North	Pacific	Rest of the
(€/000)	Italy	Europe	America	Area	World	Total
3Q2023YTD
Hydraulics	234,495	457,631	341,521	126,871	108,118	1,268,636
Water-Jetting	47,367	162,663	141,901	55,863	44,012	451,806
Total	281,862	620,294	483,422	182,734	152,130	1,720,442
3Q2022YTD
Hydraulics	207,490	412,730	307,531	125,074	95,629	1,148,454
Water-Jetting	38,545	134,172	146,984	44,432	32,352	396,485
Total	246,035	546,902	454,515	169,506	127,981	1,544,939
2023/2022 percentage changes
Hydraulics	+13.0%	+10.9%	+11.1%	+1.4%	+13.1%	+10.5%
Water-Jetting	+22.9%	+21.2%	-3.5%	+25.7%	+36.0%	+14.0%
Total	+14.6%	+13.4%	+6.4%	+7.8%	+18.9%	+11.4%

The changes at unchanged perimeter are as follows:

Hydraulics	+9.9%	+7.2%	+11.1%	+1.4%	+11.9%	+8.5%
Water-Jetting	+	+	−	+	+	+
Total	+10.2%	+10.0%	+5.8%	+4.3%	+17.7%	+8.8%

PROFITABILITY

The cost of sales accounted for 64.7% of revenues (65.3% in 3Q2022YTD). Production costs, which totaled € 445.5 million (€ 401.3 million in 3Q2022YTD, which however did not include the costs of Eurofluid Hydraulic S.r.l., I.MEC S.r.l., IPG Mouldtech India Pvt Ltd, the Waikato Group, and 5 months of Draintech S.r.l.), accounted for 25.9% of revenues (26.0% in the equivalent period of 2022). At unchanged perimeter, production costs were 25.8% of revenues (0.2% of revenues lower than in the same period of 2022). The purchase cost of raw materials and components sourced on the market, including changes in inventories, was € 667.7 million (€ 607.2 million in the equivalent period of 2022, which however did not include the costs of Eurofluid Hydraulic S.r.l., I.MEC S.r.l., IPG Mouldtech India Pvt Ltd, the Waikato Group, and 5 months of Draintech S.r.l.). The incidence of purchase costs, including changes in inventories, was 38.8% compared to 39.3% in 3Q2022YTD.

At unchanged perimeter, distribution costs were 5.5% higher than in 3Q2022YTD, but their incidence on revenues fell by 0.2 percentage points.

Also at unchanged perimeter, general and administrative expenses rose by 6.6% with respect to 3Q2022YTD, while their incidence on revenues was 0.2 percentage points lower.

Payroll costs totaled € 348.6 million (€ 316.4 million in 3Q2022YTD, which however did not include the costs of Eurofluid Hydraulic S.r.l., I.MEC S.r.l., IPG Mouldtech India Pvt Ltd, the Waikato Group, and 5 months of Draintech S.r.l.). At unchanged perimeter, payroll costs amounted to € 342.2 million, up by 8.1% due to a 3.7% rise in per capita cost and an increase in the average headcount by 372 employees. The average total number of Group employees in 3Q2023YTD was 9,295 (9,068 at unchanged perimeter) compared to 8,696 in 3Q2022YTD. Excluding persons employed by the new companies, the increase in average headcount is analyzed as follows: +213 in Europe, +164 in North America and -5 in the Rest of the World. In addition, the Group employed 1,789 temporary workers during the period (1,574 in 3Q2022YTD) at a cost of € 31.4 million (€ 28.7 million in 3Q2022YTD).

EBITDA was € 425.6 million (24.7% of revenues) compared with € 365.1 million in 3Q2022YTD, which represented 23.6% of revenues. The following table sets out EBITDA by business sector:

	3Q2023YTD €/000	% on total revenues*	3Q2022YTD €/000	% on total revenues*	Increase/ Decrease
Hydraulics	298,485	23.5%	250,798	21.8%	+19.0%
Water-Jetting	127,154	27.9%	114,325	28.6%	+11.2%
Total	425,639	24.7%	365,123	23.6%	+16.6%

* = Total revenues include those to Group companies in the other sector, while the revenues analyzed previously are exclusively those external to the Group (see note 2 in the explanatory notes). Accordingly, for consistency, the percentage is calculated on total revenues rather than on those reported previously.

EBIT was € 347.0 million (20.2% of revenues) compared with € 290.1 million in 3Q2022YTD (18.8% of revenues), reflecting an increase of 19.6%.

The effective tax rate for the period was 24.4% (26.3% in 3Q2022YTD). This reduction reflects the reversal of earlier tax provisions, € 6.1 million, after receiving a favorable response from the Tax Authorities to a question posed by the Parent Company during 2023.

Net profit in 3Q2023YTD was € 240.6 million (€ 214.7 million in 3Q2022YTD), up by 12%. Basic earnings per share rose 10.7%, from € 2.013 in 3Q2022YTD to € 2.228 in 3Q2023YTD.

Capital employed has increased from € 2,170.7 million at 31 December 2022 to € 2,374.3 million at 30 September 2023. This increase mainly reflects continued implementation of the major investment plan during the period.

Unannualized ROCE was 14.6% (13.5% in 3Q2022YTD). Unannualized ROE was 13.6% (14.3% in 3Q2022YTD).

CASH FLOW

The change in the Net Financial Position breaks down as follows:

	3Q2023YTD	3Q2022YTD
	€/000	€/000
Opening net financial position	(541,784)	(494,924)
Adjustment: opening net financial position of companies not consolidated
line by line at the end of the prior year	(1,274)	-
Adjusted opening net financial position	(543,058)	(494,924)
Cash flows from operating activities	318,790	306,086
Principal portion of leasing installments paid	(15,470)	(20,462)
Cash flow generated (absorbed) by the management of operating capital
	(70,302)	(172,939)
Cash flow generated (absorbed) by other current assets and liabilities	(7,297)	(5,439)
Capital expenditure on property, plant and equipment	(121,774)	(79,531)
Proceeds from the sale of property, plant and equipment	2,598	952
Increase in intangible assets	(4,237)	(4,420)
Financial income received	1,865	481
Other	(3,466)	(2,272)
Free cash flow	100,707	22,456
Net acquisition of investments, including received debt
and net of treasury shares assigned	(57,383)	(26,656)
Dividends paid	(34,435)	(30,387)
Disbursements for purchase of treasury shares	-	(94,793)
Proceeds from the sale of treasury shares to stock option beneficiaries	2,104	9,591
Principal portion of leasing installments paid	15,470	20,462
Principal portion of new leasing contracts arranged	(8,867)	(10,806)
Restatement and early redemption of leasing contracts	1,199	(454)
Change in other financial assets	(393)	-
Net cash generated (used)	18,402	(110,587)
Exchange differences	(1,482)	1,758
Closing net financial position	(526,138)	(603,753)

Net liquidity generated by operations totaled € 318.8 million (€ 306.1 million in 3Q2022YTD), reflecting an increase of 4.2%. Free cash flow increased significantly to € 100.7 million (€ 22.5 million in 3Q2022YTD) despite the continuation of major planned investments, given the reduction in working capital absorption and the impact of the careful inventory management policy implemented during 2022.

Net indebtedness, including payables and commitments, determined in accordance with ESMA guidance 32-382-1138 and included in Consob notice no. 5/21, comprises:

	30/09/2023	31/12/2022	30/09/2022	01/01/2022
	€/000	€/000	€/000	€/000
Cash and cash equivalents	348,982	358,275	347,133	349,015
Payables to banks (advances and STC amounts)	(37,623)	(30,928)	(25,025)	(7,760)
Interest-bearing financial payables (current portion)	(260,277)	(288,456)	(268,843)	(232,213)
Interest-bearing financial payables (non-current portion)	(577,220)	(580,675)	(657,018)	(603,966)
Net financial position	(526,138)	(541,784)	(603,753)	(494,924)
Commitments for the acquisition of investments	(75,116)	(62,812)	(53,282)	(77,794)
Total net indebtedness	(601,254)	(604,596)	(657,035)	(572,718)

CAPITAL EXPENDITURE

Expenditure on property, plant and equipment totaled € 154.6 million, of which € 11 million through the acquisition of equity investments (€ 90.4 million in the first nine months of 2022, of which € 0.5 million through the acquisition of equity investments). The additions are analyzed in the following table.

€/000	3Q2023YTD	3Q2022YTD
	€/000	€/000
Increases for the purchase of fixed assets
used in the production process	122,734	75,018
Increases for machinery rented to customers	11,855	4,059
Leased assets	8,867	10,806
Capex	143,456	89,883
Increases through the acquisition of equity investments	11,136	483
Total increases in the period	154,592	90,366

The increases in 2023 include € 43.9 million invested in land and buildings (€ 24.8 million in 3Q2022YTD).

The difference with respect to the expenditure recorded in the cash flow statement is due to the timing of payments.

Increases in intangible fixed assets amounted to € 17.5 million (€ 20.6 million in 3Q2022YTD), of which € 13 million through the acquisition of equity investments (€ 17 million in 3Q2022YTD).

INTERCOMPANY AND RELATED PARTY TRANSACTIONS

In compliance with the provisions of the Consob regulation adopted with resolution no. 17221 of 12 March 2010, as amended, Interpump Group S.p.A. has adopted the procedure that regulates related party transactions. This procedure was approved for the first time by the Board of Directors on 10 November 2010 and has been continuously updated in accordance with the regulatory provisions in force time by time and adapted to reflect current practices. In particular, on 28 June 2021 the Board of Directors approved a new version that takes account of the effects of Decree 49/2019, which transposed into Italian law the provisions of Directive (EU) 2017/828 ("Shareholders' Rights II") with regard to related parties, as well as the related amendments made by CONSOB on 10 December 2020 to the Issuers' Regulation and the Regulation governing Related Party Transactions. Lastly, on 4 August 2023 the Board of Directors approved a new version of the procedure that reflects the latest regulatory changes, of a minor nature, made since the amendments mentioned above. The new version can be found in the Corporate Governance section of the Interpump website www.interpumpgroup.it. Information on transactions carried out with related parties is given in Note 9 of the interim consolidated financial statements at 30 September 2023. Overall, no atypical or unusual transactions were carried out with related parties during 3Q2023YTD and the transactions that did take place were completed on an arm's-length basis.

CHANGES IN GROUP STRUCTURE DURING 3Q2023YTD

As described earlier, the scope of consolidation has changed as follows since 31 December 2022:

In the Hydraulics sector, the newly-acquired IPG Mouldtech India Pvt Ltd has been consolidated on a line-by-line basis with effect from 31 March 2023. In addition, Benmec S.r.l. - previously not consolidated on a line-by-line basis as immaterial - was absorbed by Transtecno S.r.l. with effect from 1 January 2023, thus contributing in full to the consolidated data from 31 March 2023. Furthermore, minority interests were acquired in Hangzhou Transtecno Power Transmission, now wholly owned, as well as in Transtecno Iberica and MA Transtecno S.A.P.I., now both 70% owned.

Lastly, agreement was reached for the partial early exercise of the options to purchase/sell the minority interests in Hydra Dyne, which is now 89.99% owned.

In the Water-Jetting sector, the newly-acquired I.Mec S.r.l. and Waikato Group have been consolidated on a line-by-line basis with effect from 31 May 2023.

EVENTS OCCURRING AFTER THE CLOSE OF 3Q2023

No atypical or unusual transactions have been carried out subsequent to 30 September 2023 that would call for changes to the consolidated financial statements at 30 September 2023.

Directors' remarks on performance in 3Q2023

3Q consolidated income statements

(€/000)	2023	2022
Revenues	535,908	518,647
Cost of sales	(347,768)	(342,083)
Gross industrial margin	188,140	176,564
% of revenues	35.1%	34.0%
Other operating income	8,525	17,213
Distribution expenses	(40,417)	(39,180)
General and administrative expenses	(51,835)	(48,078)
Other operating costs	(1,409)	(8,034)
EBIT	103,004	98,485
% of revenues	19.2%	19.0%
Financial income	7,382	11,117
Financial charges	(14,036)	(9,947)
Equity method contribution	155	255
Profit for the period before taxes	96,505	99,910
Income taxes	(24,393)	(24,690)
Consolidated profit for the period	72,112	75,220
% of revenues	13.5%	14.5%
Attributable to:
Shareholders of Parent	71,623	74,433
Minority shareholders of subsidiaries	489	787
Consolidated profit for the period	72,112	75,220
EBITDA	130,289	123,423
% of revenues	24.3%	23.8%

Shareholders' equity	1,773,063	1,497,751
Net financial position	526,138	603,753
Debts for the acquisition of equity investments	75,166	53,282
Capital employed	2,374,317	2,154,786
Unannualized ROCE	4.3%	4.6%
Unannualized ROE	4.1%	5.0%
Basic earnings per share	0.670	0.709

REVENUES

Revenues in 3Q2023 totaled € 535.9 million, up by 3.3% compared with € 518.6 million in the same period of 2022 (+0.2% at unchanged perimeter and +4.0% also net of exchange differences).

Net sales in 3Q are analyzed below by business sector and geographical area:

(€/000)	Italy	Rest of Europe	North America	Pacific Area	Rest of the World	Total
3Q2023
Hydraulics Water-Jetting Total	65,830 15,009 80,839	134,705 51,665 186,370	108,618 48,253 156,871	36,942 22,451 59,393	37,799 14,636 52,435	383,894 152,014 535,908
3Q2022
Hydraulics Water-Jetting Total	64,280 11,365 75,645	132,154 48,658 180,812	108,651 48,252 156,903	45,398 16,750 62,148	31,849 11,290 43,139	382,332 136,315 518,647
2023/2022 percentage changes
Hydraulics Water-Jetting Total	+2.4% +32.1% +6.9%	+1.9% +6.2% +3.1%	+0.0% +0.0% +0.0%	-18.6% +34.0% -4.4%	+18.7% +29.6% +21.5%	+0.4% +11.5% +3.3%

The changes at unchanged perimeter are as follows:

2023/2022 percentage changes

Hydraulics	-0.1%	-0.6%	+0.0%	-18.6%	+17.2%	-1.0%
Water-Jetting	+	+	−	+	+	+
Total	+1.0%	-0.1%	-1.3%	-10.0%	+19.9%	+0.2%

PROFITABILITY

The cost of sales accounted for 64.9% of revenues (66.0% in 3Q2022). Production costs, which totaled € 141.2 million (€ 137.3 million in 3Q2022, which however did not include the costs of Eurofluid Hydraulic S.r.l., I.MEC S.r.l., IPG Mouldtech India Pvt Ltd and the Waikato Group), accounted for 26.3% of revenues (26.5% in the equivalent period of 2022). At unchanged perimeter, production costs in 3Q2023 were 26.3% of sales (-0.2% compared with the same period in 2022). The purchase cost of raw materials and components sourced on the market, including changes in inventories, was € 206.6 million (€ 204.8 million in the same period of 2022). The incidence of purchase costs, including changes in inventories, was 38.5% (39.5% in 3Q2022).

At unchanged perimeter, distribution costs fell by 1.9% with respect to 3Q2022, while the associated incidence on revenues fell by 0.2 percentage points.

Again at unchanged perimeter, general and administrative expenses rose by 3.2% with respect to 3Q2022, and their incidence on revenues rose by 0.3 percentage points.

EBITDA totaled € 130.3 million (24.3% of revenues) compared to € 123.4 million in 3Q2022, which accounted for 23.8% of revenues, reflecting growth of 5.6%.

The following table sets out EBITDA by business sector:

	3Q2023 €/000	% on total revenues*	3Q2022 €/000	% on total revenues*	Increase/ Decrease
Hydraulics	86,775	22.6%	83,493	21.8%	+3.9%
Water-Jetting	43,514	28.4%	39,930	29.1%	+9.0%
Total	130,289	24.3%	123,423	23.8%	+5.6%

EBIT amounted to € 103.0 million (19.2% of revenues) compared with € 98.5 million in 3Q2022 (19.0% of revenues), up by 4.6%.

The third quarter closed with a consolidated net profit of € 72.1 million (€ 75.2 million in 3Q2022), reflecting a rise of 4.1%.

Basic earnings per share were € 0.670, compared to € 0.709 in 3Q2022.

BUSINESS OUTLOOK

The results for 3Q2023 are positive. The first nine months of 2023 have generated records for both turnover and EBITDA margin. The geo-political, macro-economic and financial environment has deteriorated, while inflation continues to condition the markets, which have tended to normalize with respect to the dynamics experienced in 2022. Nevertheless, the Group has reason to believe that 2023 revenues will close ahead of initial forecasts, while the EBITDA margin will achieve another new record level.

Sant'Ilario d'Enza (RE), 10 November 2023

For the Board of Directors Fulvio Montipò Executive Chairman

Mauro Barani, the manager responsible for drafting the company's accounting documents, declares - pursuant to article 154-(2), subsection 2, TUF - that the accounting disclosures in this document correspond to the contents of the underlying documents, the accounting books and the accounting entries.

Sant'Ilario d'Enza (RE), 10 November 2023

Mauro Barani Manager responsible for drafting the company's accounting documents

Financial statements and notes

Consolidated statement of financial position

(€/000)	Notes	30/09/2023	31/12/2022
ASSETS
Current assets
Cash and cash equivalents		348,982	358,275
Trade receivables		459,554	433,812
Inventories	4	726,888	683,819
Tax receivables		45,839	45,133
Other current assets		36,423	33,983
Total current assets		1,617,686	1,555,022
Non-current assets
Property, plant and equipment	5	762,501	681,095
Goodwill	1	776,572	754,944
Other intangible assets		71,648	61,863
Other financial assets		2,988	2,961
Tax receivables		3,839	5,051
Deferred tax assets		67,746	66,184
Other non-current assets		3,396	2,648
Total non-current assets		1,688,690	1,574,746
Assets held for sale	6	-	1,291
Total assets		3,306,376	3,131,059

(€/000)	Notes	30/09/2023	31/12/2022
LIABILITIES
Current liabilities
Trade payables		278,798	312,222
Payables to banks		37,623	30,928
Interest-bearing financial payables (current portion)		260,277	288,456
Tax liabilities		55,890	60,662
Other current liabilities		169,566	111,553
Provisions for risks and charges		9,877	13,329
Total current liabilities		812,031	817,150
Non-current liabilities
Interest-bearing financial payables		577,220	580,675
Liabilities for employee benefits		20,796	20,088
Deferred tax liabilities		57,227	56,947
Tax liabilities		358	355
Other non-current liabilities		52,450	76,745
Provisions for risks and charges		13,231	12,989
Total non-current liabilities		721,282	747,799
Total liabilities		1,533,313	1,564,949
SHAREHOLDERS' EQUITY
Share capital		55,622	55,584
Legal reserve		11,323	11,323
Share premium reserve		45,444	39,444
Remeasurement reserve for defined benefit plans		(5,320)	(5,320)
Translation reserve		19,503	18,379
Other reserves		1,637,697	1,434,138
Group shareholders' equity		1,764,269	1,553,548
Non-controlling interests		8,794	12,562
Total shareholders' equity	7	1,773,063	1,566,110
Total shareholders' equity and liabilities		3,306,376	3,131,059

Consolidated income statements for the first nine months

(€/000)	Notes	2023	2022
Revenues		1,720,442	1,544,939
Cost of sales		(1,113,270)	(1,008,462)
Gross industrial margin		607,172	536,477
Other operating income		31,225	32,167
Distribution expenses		(125,783)	(116,277)
General and administrative expenses		(161,194)	(146,991)
Other operating costs		(4,431)	(15,243)
EBIT		346,989	290,133
Financial income	8	20,332	26,274
Financial charges	8	(49,555)	(25,171)
Equity method contribution		484	115
Profit for the period before taxes		318,250	291,351
Income taxes		(77,684)	(76,618)
Consolidated profit for the period		240,566	214,733
Attributable to:
Shareholders of Parent		238,202	212,557
Minority shareholders of subsidiaries		2,364	2,176
Consolidated profit for the period		240,566	214,733
Basic earnings per share	9	2.228	2.013
Diluted earnings per share	9	2.219	1.997

Comprehensive consolidated income statements for the first nine months

(€/000)	2023	2022
Consolidated profit (A)	240,566	214,733
Other comprehensive income (losses) which will subsequently be reclassified to consolidated profit or loss
Gains (losses) on translating the financial statements of foreign companies	841	55,829
Gains (losses) from companies accounted for using the equity method	(316)	420
Applicable taxes	-	-
Total other consolidated income (losses) which will subsequently be reclassified to consolidated profit or loss, net of the tax effect (B)	525	56,249
Comprehensive consolidated profit for the first nine months (A) + (B)	241,091	270,982
Attributable to:
Shareholders of Parent Minority shareholders of subsidiaries	239,326 1,765	267,788 3,194
Comprehensive consolidated profit for the period	241,091	270,982

Consolidated cash flow statements for the first nine months

(€/000)	2023	2022

Cash flows from operating activities
Profit before taxes	318,250	291,351
Adjustments for non-cash items:
Losses (gains) on the sale of fixed assets	(3,238)	(4,016)
Amortization and depreciation	76,188	73,250
Costs recognized in the income statement relative
to stock options that do not involve	3,934	3,689
monetary outflows for the Group Losses (profits) from investments	(484)	(115)
Net change in risk provisions and allocations to employee
benefit provisions	4,052	1,051
benefit provisions Expenditures for tangible assets to be leased	(11,981)	(4,051)
Proceeds from the disposal of leased tangible assets	5,362	8,296
Net financial charges (revenues)	29,223	(1,109)
	413,202	368,346
(Increase) decrease in trade receivables and other current assets	(9,588)	(74,990)
(Increase) decrease in inventories	(28,581)	(133,183)
Increase (decrease) in trade payables and other current liabilities	(39,430)	29,795
Interest paid	(21,911)	(4,051)
Realized exchange differences	(3,038)	2,632
Taxes paid	(69,463)	(60,841)
Net cash from operating activities	241,191	127,708

Cash flows from investing activities
Payments for the purchase of investments, net of cash received and excluding treasury shares assigned	(40,790)	(25,778)
Capital expenditure on property, plant and equipment	(121,774)	(79,531)
Proceeds from the sale of property, plant and equipment	2,598	952
Increase in intangible assets	(4,237)	(4,420)
Financial income received	1,865	481
Other	(55)	(1,193)
Net cash (used in) investing activities	(162,393)	(109,489)
Cash flows from financing activities
Disbursements (repayments) of loans	(44,863)	94,249
Dividends paid	(34,435)	(30,387)
Disbursements for purchase of treasury shares	-	(94,793)
Proceeds from the sale of treasury shares to stock option beneficiaries	2,104	9,591
Disbursals (repayments) of shareholder loans	(567)	(568)
Change in other financial assets	(393)	-
Payment of finance lease installments (principal)	(15,470)	(20,462)
Net cash generated by (used in) financing activities	(93,624)	(42,370)

Net increase (decrease) in cash and cash equivalents	(14,826)	(24,151)

(€/000)	2023	2022
Net increase (decrease) in cash and cash equivalents	(14,826)	(24,151)
Translation differences for cash held by non-EU companies	(1,162)	5,004
Opening cash and cash equivalents of companies consolidated
on a line-by-line basis for the first time	-	-
Cash and cash equivalents at the beginning of the period	327,347	341,255
Cash and cash equivalents at the end of the period	311,359	322,108
Cash and cash equivalents consist of the following:
	30/09/2023	31/12/2022
	€/000	€/000
Cash and cash equivalents as per the consolidated statement of financial position	348,982	358,275
Bank payables (overdrafts and subject to collection advances)	(37,623)	(30,928)

Cash and cash equivalents as per the consolidated cash flow statement 311,359 327,347

Consolidated statement of changes in shareholders' equity

				Remeasurement
			Share	reserve for			Group	Non
	Share	Legal	premium	defined benefit	Translation	Other	shareholders'	controlling
	capital	reserve	reserve	plans	reserve	reserves	equity	interests	Total
At 1 January 2022	55,327	11,323	66,472	(8,170)	6,013	1,197,234	1,328,199	11,465	1,339,664
Recognition in income statement of fair value
of stock options granted and exercisable	-	-	3,689	-	-	-	3,689	-	3,689
Purchase of treasury shares	(1,082)	-	(93,711)	-	-	-	(94,793)	-	(94,793)
Sale of treasury shares to stock option beneficiaries	362	-	9,229	-	-	-	9,591	-	9,591
Transfer of treasury shares to pay for equity investments	-	-	-	-	-	-	-	-	-
Purchase of residual interests in subsidiaries	-	-	-	(56)	-	65	9	(534)	(525)
Dividends paid	-	-	-	-	-	(29,092)	(29,092)	(1,199)	(30,291)
Dividends resolved	-	-	-	-	-	(566)	(566)	-	(566)
Comprehensive profit (loss) for 3Q2022YTD	-	-	-	-	55,231	212,557	267,788	3,194	270,982
Balances at 30 September 2022	54,607	11,323	(14,321)	(8,226)	61,244	1,380,198	1,484,825	12,926	1,497,751
Recognition in income statement of fair value
of stock options granted and exercisable	-	-	1,306	-	-	-	1,306	-	1,306
Purchase of treasury shares	-	-	-	-	-	-	-	-	-
Sale of treasury shares to stock option beneficiaries	977	-	52,459	-	-	-	53,436	-	53,436
Transfer of treasury shares to pay for equity investments	-	-	-	-	-	-	-	-	-
Winding up of subsidiaries	-	-	-	-	-	-	-	-	-
Purchase of residual interests in subsidiaries	-	-	-	(19)	-	-	(19)	-	(19)
Dividends paid	-	-	-	-	-	(566)	(566)	(311)	(877)
Dividends resolved	-	-	-	-	-	566	566	-	566
Comprehensive profit (loss) for 4Q2022	-	-	-	2,925	(42,865)	53,940	14,000	(53)	13,947
At 31 December 2022	55,584	11,323	39,444	(5,320)	18,379	1,434,138	1,553,548	12,562	1,566,110
Recognition in income statement of fair value
of stock options granted and exercisable	-	-	3,934	-	-	-	3,934	-	3,934
Purchase of treasury shares	-	-	-	-	-	-	-	-	-
Sale of treasury shares to stock option beneficiaries	38	-	2,066	-	-	-	2,104	-	2,104
Transfer of treasury shares to pay for equity investments	-	-	-	-	-	-	-	-	-
Winding up of subsidiaries	-	-	-	-	-	-	-	-	-
Purchase of residual interests in subsidiaries	-	-	-	-	-	(2,569)	(2,569)	(3,431)	(6,000)
Dividends paid	-	-	-	-	-	(32,074)	(34,074)	(2,102)	(34,176)
Dividends resolved	-	-	-	-	-	-	-	-	-
Comprehensive profit (loss) for 3Q2023YTD	-	-	-	-	1,124	238,202	239,326	1,765	241,091
Balances at 30 September 2023	55,622	11,323	45,444	(5,320)	19,503	1,637,697	1,764,269	8,794	1,773,063

Interim Board of Directors' Report at 30 September 2023

–

Interpump Group

3Q consolidated income statements

(€/000)		2023	2022
Revenues		535,908	518,647
Cost of sales		(347,768)	(342,083)
Gross industrial margin		188,140	176,564
Other operating income		8,525	17,213
Distribution expenses		(40,417)	(39,180)
General and administrative expenses		(51,835)	(48,078)
Other operating costs		(1,409)	(8,034)
EBIT		103,004	98,485
Financial income Financial charges Equity method contribution Profit for the period before taxes	8 8	7,382 (14,036) 155 96,505	11,117 (9,947) 255 99,910
Income taxes		(24,393)	(24,690)
Consolidated profit for the period		72,112	75,220
Attributable to: Shareholders of Parent Minority shareholders of subsidiaries Consolidated profit for the period		71,623 489 72,112	74,433 787 75,220
Basic earnings per share	9	0.670	0.709
Diluted earnings per share	9	0.667	0.706

3Q comprehensive consolidated income statements

(€/000)	2023	2022
3Q consolidated profit (A)	72,112	75,220
Other comprehensive income (losses) which will subsequently be reclassified to consolidated profit or loss
Gains (losses) on translating the financial statements of foreign companies	3,175	19,447
Gains (losses) from companies accounted for using the equity method	(55)	(29)
Applicable taxes	-	-
Total other consolidated income (losses) which will subsequently be reclassified to consolidated profit or loss,
net of the tax effect (B)	3,120	19,418
3Q comprehensive consolidated profit (A) + (B)	75,232	94,638
Attributable to:
Shareholders of Parent	74,622	93,805
Minority shareholders of subsidiaries	610	833
Comprehensive consolidated profit for the period	75,232	94,638

Notes to the consolidated financial statements

General information

Interpump Group S.p.A. is a company domiciled in Sant'Ilario d'Enza (Reggio Emilia, Italy) and incorporated under Italian law. The company is listed on the Milan stock exchange in the Euronext Star Milan segment.

The Group manufactures and markets high and very high pressure plunger pumps, very high pressure systems, machines for the food processing industry, chemicals, cosmetics, pharmaceuticals, mechanical sifters and automated milking systems (Water-Jetting sector), power take-offs, gear pumps, hydraulic cylinders, valves and directional controls, hydraulic hoses and fittings, gears, orbital motors, steering systems (hydroguide) and other hydraulic components (Hydraulic sector). The Group has production facilities in Italy, the US, Germany, China, India, France, Portugal, Spain, Brazil, Bulgaria, Romania, Canada, Poland, New Zealand and South Korea.

Revenues are not affected by any significant degree of seasonality.

The consolidated financial statements include Interpump Group S.p.A. and its directly or indirectly controlled subsidiaries (hereinafter "the Group").

The consolidated financial statements at 30 September 2023 were approved by the Board of Directors today (10 November 2023).

Basis of preparation

The consolidated financial statements at 30 September 2023 were prepared in compliance with the international accounting standards (IAS/IFRS) endorsed by the European Union for interim financial statements (IAS 34). The tables have been prepared in compliance with IAS 1, while the notes have been prepared in condensed form, as allowed by IAS 34, and therefore do not include all the information required for annual financial statements prepared in compliance with IFRS standards. Accordingly, the consolidated financial statements at 30 September 2023 should be read together with the consolidated financial statements for the year ended 31 December 2022.

The accounting standards and criteria adopted in the consolidated financial statements at 30 September 2023 may conflict with IFRS provisions in force on 31 December 2023, due to the effect of future orientations of the European Commission with regard to the approval of international accounting standards or the issue of new standards, interpretations or implementing guidelines by the International Accounting Standards Board (IASB) or the International Financial Reporting Interpretations Committee (IFRIC).

Preparation of interim financial statements in compliance with IAS 34 - Interim Financial Reporting calls for judgments, estimates, and assumptions that have an effect on assets, liabilities, costs and revenues and on information regarding contingent assets and liabilities at the reporting date. Any estimates made may differ from the actual results obtained in the future. In addition, some measurement processes, notably those that are more complex, such as the determination of impairment losses on non-current assets, are generally only performed in a comprehensive manner at the time of preparing the annual financial statements, when all the necessary information is available, except in cases in which evidence of impairment exists, when the immediate measurement of any losses in value is required. Likewise, the actuarial valuations required to

determine the liability for employee benefits are normally made when preparing the annual financial statements.

The consolidated financial statements are presented in thousands of euro. The financial statements are prepared using the cost method, with the exception of financial instruments, which are measured at fair value.

Accounting standards

The accounting standards adopted are those described in the consolidated financial statements at 31 December 2022, with the exception of those adopted as from 1 January 2023 as described hereunder, and they were uniformly applied to all Group companies and all periods presented.

a) Accounting standards, amendments and interpretations in force from 1 January 2023 and adopted by the Group
- Amendments to IAS 1 "Presentation of Financial Statements" and IFRS Practice Statement 2 "Disclosure of Accounting policies". The IASB published an amendment to this standard on 12 February 2021 in order to help companies to decide which accounting policies to disclose in their financial statements. The amendment applies to reporting periods beginning on or after 1 January 2023. Early application was allowed.
- Amendments to IAS 8 "Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates". The IASB published an amendment to this standard on 12 February 2021 in order to introduce a new definition of accounting estimate and clarify the distinction between changes in accounting estimates, changes in accounting policies and corrections of errors. The amendment applies to reporting periods beginning on or after 1 January 2023. Early application was allowed.
- Amendments to IAS 12 "Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction". On 7 May 2021 IASB published an amendment to this standard, which requires companies to recognize deferred tax assets and liabilities on specific transactions that, at the time of initial booking, give rise to equivalent timing differences (taxable and deductible) – for example, see transactions related to leasing contracts. The amendment applies to reporting periods beginning on or after 1 January 2023. Early application was allowed.

b) Accounting standards, amendments and interpretations taking effect as from 1 January 2023 but not relevant for the Group

IFRS 17 Insurance Contracts: The IASB published an amendment to the applicability of this standard on 19 November 2021, in order to establish principles for the recognition, measurement, presentation and reporting on insurance contracts falling within the scope of application of this standard. The amendment applies to reporting periods beginning on or after 1 January 2023. Early application was allowed.
Amendments to "IFRS 17 Insurance contracts: Initial application of IFRS 17 and IFRS 9 – Comparative information". The IASB published this amendment to the transitional instructions for IFRS 17 on 9 December 2021. The amendment gives insurers an option for the purpose of improving the meaningfulness of the information to be provided to investors on initial application of the new standard. The amendment applies to reporting periods beginning on or after 1 January 2023. Early application was allowed.

c) New accounting standards and amendments not yet applicable and not adopted early by the Group
- Amendments to IAS 1 "Presentation of Financial Statements: Classification of Liabilities as Current or Non-current". The IASB published this amendment on 23 January 2020 in order to clarify the presentation of liabilities in the statement of financial position. In particular, they clarify that:
  - the classification of liabilities as current or non-current should be based on the rights existing at the end of the reporting period and, in particular, on the right to defer payment for at least 12 months;
  - classification is not influenced by expectations regarding decisions by the entity to exercise its right to defer the payment of a liability;
  - payment refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

The new amendment is applicable from 1 January 2024 and must be applied retrospectively. The Group is currently assessing the impact of this amendment on the existing situation.

Amendments to IFRS 16 "Leases: Lease Liability in a Sale and Leaseback". On 22 September 2022 the IASB published the document entitled Lease Liability in a Sale and Leaseback, which amends IFRS 16 and clarifies how to account for a sale and leaseback after the date of the transaction. The amendment applies to reporting periods beginning on or after 1 January 2024. Early application is allowed.
Amendments to IAS 12 "Income Taxes: International Tax Reform – Pillar Two Model Rules". On 24 April 2023, the IASB published a document that introduces a temporary exception to the recognition of deferred taxes linked to application of the Pillar Two rules published by the OECD.

This amendment is effective for annual periods that began on or after 1 January 2023.

• Amendments to "IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments" regarding supplier finance arrangements: On 25 May 2023, in response to investor needs, the IASB published an amendment to the related disclosures that improves transparency with regard to financial indebtedness and its effects on financial liabilities, cash flows and the exposure to liquidity risk.

The new amendment applies to reporting periods beginning on or after 1 January 2024.

• Amendments to "IAS 21 The effects of changes in foreign exchange rates: lack of exchangeability": The IASB published an amendment on 15 August 2023 that contains guidelines to clarify when one currency is exchangeable into another currency and how to determine the exchange rate when, by contrast, it is not exchangeable.

The new amendment applies to reporting periods beginning on or after 1 January 2025 and early adoption is allowed.

Notes to the consolidated financial statements at 30 September 2023

		Page
1.	Scope of consolidation and goodwill	42
2.	Business sector information	47
3.	Acquisition of equity investments	54
4.	Inventories and detail of changes in the inventories allowance	54
5.	Property, plant and equipment	54
6.	Assets held for sale	55
7.	Shareholders' equity	55
8.	Financial income and expenses	56
9.	Earnings per share	58
10.	Transactions with related parties	59
11.	Disputes, Contingent liabilities and Contingent assets	61

1. Scope of consolidation and goodwill

The scope of consolidation at 30 September 2023 comprises the Parent company and the following subsidiaries:

		Share		%
Company	Location	capital €/000	Sector	held at 30/09/2023
			Water
GP Companies Inc.	Minneapolis (USA)	1,854	Jetting Water	100.00%
Hammelmann GmbH	Oelde (Germany)	25	Jetting Water	100.00%
Hammelmann Australia Pty Ltd (1)	Melbourne (Australia)	472	Jetting Water	100.00%
Hammelmann Corporation Inc (1)	Miamisburg (USA)	39	Jetting Water	100.00%
Hammelmann S. L. (1)	Zaragoza (Spain)	500	Jetting Water	100.00%
Hammelmann Pumps Systems Co Ltd (1)	Tianjin (China)	871	Jetting Water	90.00%
Hammelmann France S.a.r.l. (1)	Etrichè (France)	50	Jetting Water	100.00%
Hammelmann Swiss GmbH (1)	Dudingen (Switzerland)	89	Jetting Water	100.00%
Inoxihp S.r.l.	Nova Milanese (MI)	119	Jetting Water	52.72%
NLB Corporation Inc.	Detroit (USA)	12	Jetting Water	100.00%
Inoxpa S.A.	Banyoles (Spain)	23,000	Jetting Water	100.00%
Inoxpa India Private Ltd (3)	Pune (India)	6,779	Jetting Water	100.00%
Inoxpa Solutions France (3)	Gleize (France)	2,071	Jetting	100.00%
Improved Solutions Portugal Unipessoal Ltda (Portugal) (3)	Vale de Cambra (Portugal)	760	Water Jetting	100.00%
Inoxpa (UK) Ltd (3)	Eastbourne (UK)	1,942	Water Jetting Water	100.00%
Inoxpa Solutions Moldova (3)	Chisinau (Moldova)	317	Jetting Water	66.67%
Inoxpa Colombia SAS (3)	Bogotá (Colombia)	133	Jetting Water	83.29%
Inoxpa Italia S.r.l. (3)	Mirano (VE)	100	Jetting Water	100.00%
Inoxpa Skandinavien A/S (3)	Horsens (Denmark)	134	Jetting Water	100.00%
Inoxpa South Africa Proprietary Ltd (3)	Gauteng (South Africa)	104	Jetting Water	100.00%
Inoxpa Special Processing Equipment Co. Ltd (3)	Jianxing (China)	1,647	Jetting Water	100.00%
Inoxpa Ukraine (3)	Kiev (Ukraine)	113	Jetting Water	100.00%
Inoxpa USA Inc. (3)	Santa Rosa (USA)	1,426	Jetting Water	100.00%
INOXPA LTD (Russia) (3)	Podolsk (Russia)	1,435	Jetting Water	70.00%
Inoxpa Mexico S.A. de C.V. (3)	Mexico City (Mexico)	309	Jetting Water	100.00%
Pioli S.r.l.	Reggio Emilia (RE)	10	Jetting Water	100.00%
Servizi Industriali S.r.l.	Ozzano Emilia (BO)	100	Jetting Water	80.00%
SIT S.p.A.	S.Ilario d'Enza (RE)	105	Jetting Water	80.00%
Teknova S.r.l. (in liquidation)	Reggio Emilia (RE)	28	Jetting	100.00%
Interpump Hydraulics S.p.A.	Calderara di Reno (BO)	2,632	Hydraulics	100.00%
Contarini Leopoldo S.r.l. (4)	Lugo (RA)	47	Hydraulics	100.00%
Unidro Contarini S.a.s. (5)	Barby (France)	8	Hydraulics	100.00%
Copa Hydrosystem Ood (5)	Troyan (Bulgaria)	3	Hydraulics	100.00%
Hydrocar Chile S.A. (4)	Santiago (Chile)	129	Hydraulics	90.00%

Hydroven S.r.l. (4)	Tezze sul Brenta (VI)	200	Hydraulics	100.00%
Interpump Hydraulics Brasil Ltda (4)	Caxia do Sul (Brazil)	15,126	Hydraulics	100.00%
Interpump Hydraulics France S.a.r.l. (4)	Ennery (France)	76	Hydraulics	99.77%
Interpump Hydraulics India Private Ltd (4)	Hosur (India)	682	Hydraulics	100.00%
Interpump Hydraulics Middle East FZE (4)	Dubai (UAE)	326	Hydraulics	100.00%
Interpump South Africa Pty Ltd (4)	Johannesburg (South Africa)	-	Hydraulics	100.00%
Eurofluid Hydraulic S.r.l. (4)	Albinea (RE)	100	Hydraulics	80.00%
Interpump Hydraulics (UK) Ltd. (4)	Kidderminster (United Kingdom)	13	Hydraulics	100.00%
Mega Pacific Pty Ltd (6)	Newcastle (Australia)	335	Hydraulics	100.00%
Mega Pacific NZ Pty Ltd (6)	Mount Maunganui (New Zealand)	557	Hydraulics	100.00%
Muncie Power Prod. Inc. (4)	Muncie (USA)	784	Hydraulics	100.00%
North American Manufacturing Inc. (7)	Fairmount (USA)	3,410	Hydraulics	100.00%
Hydra Dyne Tech Inc (7)	Ingersoll (Canada)	80	Hydraulics	89.99%
Oleodinamica Panni S.r.l. (4)	Tezze sul Brenta (VI)	2,000	Hydraulics	100.00%
Wuxi Interpump Weifu Hydraulics Company Ltd (4)	Wuxi (China)	2,095	Hydraulics	65.00%
IMM Hydraulics S.p.A. (4)	Atessa (Switzerland)	520	Hydraulics	100.00%
IFS France S.a.r.l. (8)	Strasbourg (France)	162	Hydraulics	100.00%
Interpump Fluid Solutions Germany GmbH (8)	Meinerzhagen (Germany)	52	Hydraulics	100.00%
IMM Hydro Est (8)	Catcau Cluj Napoca (Romania)	3,155	Hydraulics	100.00%
FGA S.r.l. (8)	Fossacesia (CH)	10	Hydraulics	100.00%
Innovativ Gummi Tech S.r.l. (8)	Ascoli Piceno (AP)	4,100	Hydraulics	100.00%
Tekno Tubi S.r.l. (8)	Terre del Reno (FE)	100	Hydraulics	100.00%
Tubiflex S.p.A.	Orbassano (TO)	515	Hydraulics	100.00%
Walvoil S.p.A.	Reggio Emilia	7,692	Hydraulics	100.00%
Walvoil Fluid Power Corp. (9)	Tulsa (USA)	137	Hydraulics	100.00%
Walvoil Fluid Power (India) Pvt. Ltd. (9)	Bangalore (India)	4,803	Hydraulics	100.00%
Walvoil Fluid Power Korea Llc. (9)	Pyeongtaek (South Korea)	453	Hydraulics	100.00%
Walvoil Fluid Power France S.a.r.l. (9)	Vritz (France)	10	Hydraulics	100.00%
Walvoil Fluid Power Australasia (9)	Melbourne (Australia)	7	Hydraulics	100.00%
Walvoil Canada Inc. (9)	Terrebonne, Quebec (Canada)	76	Hydraulics	100.00%
Walvoil Fluid Power (Dongguan) Co., Ltd (9)	Dongguan (China)	3,720	Hydraulics	100.00%
IPG Mouldtech India Pvt Ltd (9)	Coimbatore (India)	298	Hydraulics	85.00%
Reggiana Riduttori S.r.l.	S.Polo d'Enza (RE)	6,000	Hydraulics	100.00%
RR USA Inc. (12)	Boothwyn (USA)	1	Hydraulics	100.00%
RR Canada Inc. (12)	Vaughan (Canada)	1	Hydraulics	100.00%
RR Holland BV (12)	Oosterhout (Netherlands)	19	Hydraulics	100.00%
RR France S.a.r.l. (12)	Thouare sur Loire (France)	400	Hydraulics	95.00%
RR Slovakia A.S. (12)	Zvolen (Slovakia)	340	Hydraulics	100.00%
RR Pacific Pty Ltd (12)	Victoria (Australia)	249	Hydraulics	100.00%
RR India Pvt. Ltd (12) (dormant)	New Delhi (India)	52	Hydraulics	99.99%
Reggiana Riduttori (Suzhou) Co. Ltd (12)	Suzhou (China)	600	Hydraulics	100.00%
Transtecno S.r.l.	Anzola dell'Emilia (BO)	100	Hydraulics	80.00%
Draintech S.r.l. (13)	Anzola dell'Emilia (BO)	10	Hydraulics	80.00%
Hangzhou Transtecno Power Transmissions Co. Ltd (13)	Hangzhou (China)	575	Hydraulics	100.00%
Transtecno Iberica the Modular Gearmotor S.A. (13)	Gava (Spain)	94	Hydraulics	70.00%
MA Transtecno S.A.P.I. de C.V. (13)	Apodaca (Mexico)	124	Hydraulics	70.00%
Transtecno USA LLC (15)	Miami (USA)	3	Hydraulics	100.00%
Transtecno BV (13)	Amersfoort (Netherlands)	18	Hydraulics	51.00%
Transtecno Aandrijftechniek (Netherlands) (14)	Amersfoort (Netherlands)	-	Hydraulics	51.00%
White Drive Motors and Steering Sp zoo	Wroclaw (Poland)	33,254	Hydraulics	100.00%

Interim Board of Directors' Report at 30 September 2023 – Interpump Group

		Share capital		% held
Company	Location	€/000		Sector at 30/09/2023
White Drive Motors and Steering GmbH	Parchim (Germany)	33,595	Hydraulics	100.00%
White Drive Motors and Steering, LLC	Hopkinsville (USA)	46,328	Hydraulics	100.00%
Interpump Piping GS S.r.l.	Reggio Emilia	10	Hydraulics	100.00%
GS-Hydro Singapore Pte Ltd (10)	Singapore	624	Hydraulics	100.00%
GS-Hydro Korea Ltd. (10)	Busan (South Korea)	1,892	Hydraulics	100.00%
GS-Hydro Piping Systems (Shanghai) Co. Ltd. (11)	Shanghai (China)	2,760	Hydraulics	100.00%
GS-Hydro Benelux B.V. (10)	Barendrecht (Netherlands)	18	Hydraulics	100.00%
GS-Hydro Austria GmbH (10)	Pashing (Austria)	40	Hydraulics	100.00%
GS-Hydro Sp Z O O (Poland) (10)	Gdynia (Poland)	1,095	Hydraulics	100.00%
GS Hydro Denmark AS (10)	Kolding (Denmark)	67	Hydraulics	100.00%
GS-Hydro S.A.U (Spain) (10)	Las Rozas (Spain)	90	Hydraulics	100.00%
Suministros Franquesa S.A. (16)	Lleida (Spain)	160	Hydraulics	100.00%
GS-Hydro U.S. Inc. (7)	Houston (USA)	9,903	Hydraulics	100.00%
GS-Hydro do Brasil Sistemas Hidraulicos Ltda (10)	Rio de Janeiro (Brazil)	252	Hydraulics	100.00%
GS-Hydro System GmbH (Germany) (10)	Witten (Germany)	179	Hydraulics	100.00%
GS- Hydro UK Ltd (10)	Aberdeen (United Kingdom)	5,095	Hydraulics	100.00%
GS-Hydro Ab (Sweden) (10)	Kista (Sweden)	120	Hydraulics	100.00%
GS-Hydro Hong Kong Ltd (1)	Hong Kong	1	Hydraulics	100.00%
IMM Hydraulics Ltd (dormant) (6)	Kidderminster (United Kingdom)	-	Hydraulics	100.00%
Bristol Hose Ltd (dormant) (6)	Bristol (United Kingdom)	-	Hydraulics Water	100.00%
I.MEC S.r.l	Reggio Emilia	100	Jetting Water	70.00%
Waikato Holding Limited (NZ)	Auckland (New Zealand)	15,175	Jetting Water	100.00%
Waikato Milking Systems L.P. (NZ) (17)	Auckland (New Zealand)	46,803	Jetting Water	100.00%
Waikato Milking Systems Lease Limited (NZ) (18)	Auckland (New Zealand)	-	Jetting Water	100.00%
Waikato Milking Systems USA LLC (19)	Verona (USA)	-	Jetting Water	100.00%
Waikato Milking Systems UK Limited (18)	Shrewsbury (United Kingdom)	-	Jetting Water	100.00%
Waikato Milking Systems Ireland Limited (18)	Dublin (Ireland)	1	Jetting Water	100.00%
Hi-Tech Enviro Solution Limited (NZ) (dormant) (18)	Auckland (New Zealand)	-	Jetting Water	100.00%
WMS GP Limited (NZ) (18) (dormant)	Hamilton (New Zealand)	-	Jetting	100.00%

(1) = controlled by Hammelmann GmbH (10) = controlled by Interpump Piping GS S.r.l. (2) = controlled by NLB Corporation Inc. . (11) = controlled by GS Hydro Hong Kong Ltd (3) = controlled by Inoxpa S.A. (12) = controlled by Reggiana Riduttori S.r.l. (4) = controlled by Interpump Hydraulics S.p.A. (13) = controlled by Transtecno S.r.l. (5) = controlled by Contarini Leopoldo S.r.l. (14) = controlled by Transtecno B.V. (6) = controlled by Interpump Hydraulics (UK) Ltd. (15) = controlled by MA Transtecno S.A.P.I. de C.V. (7) = controlled by Muncie Power Prod. Inc (16) = controlled by GS Hydro S.A.U

The other companies are controlled by Interpump Group S.p.A.

(8) = controlled by IMM Hydraulics S.p.A. (17) = controlled by Waikato Holding Limited (9) = controlled by Walvoil S.p.A. (18) = controlled by Waikato Milking Systems LP (19) = controlled by Waikato Milking Systems Lease LTD

Compared with 3Q2022YTD, the Hydraulic sector has consolidated Eurofluid Hydraulic S.r.l. in full during 2023, following its acquisition in October 2022, while IPG Mouldtech India Pvt Ltd, acquired in 1Q2023, has been consolidated on a line-by-line basis with effect from 31 March 2023.

In the Water-Jetting sector, I.Mec S.r.l. acquired in April 2023 and the Waikato Group acquired in May 2023 have been consolidated on a line-by-line basis with effect from 31 May 2023.

Benmec S.r.l. - previously not consolidated on a line-by-line basis as immaterial - was absorbed by Transtecno S.r.l. with effect from 1 January 2023, thus contributing in full to all the consolidated data.

Furthermore, minority interests were acquired in Hangzhou Transtecno Power Transmission, now wholly owned, as well as in Transtecno Iberica and MA Transtecno S.A.P.I., now both 70% owned.

Lastly, agreement was reached for the partial early exercise of the options to purchase/sell the minority interests in Hydra Dyne, which is now 89.99% owned.

Rights of minorities to dispose of their holdings (put options)

The minority quotaholder of Inoxihp S.r.l. is entitled to dispose of its holdings starting from the approval of the 2025 financial statements up to the 2035 financial statements, on the basis of the average results of the company in the last two financial statements for the years ended before the exercise of the option.

The minority shareholder of Inoxpa Solution Moldova is entitled to dispose of its holdings from October 2020, based on the most recent statement of financial position of that company.

Rights and obligations of minorities to dispose of their holdings (put & call options)

The minority shareholder of Hydra Dyne has the right and obligation to dispose of its holdings starting from approval of the 2028 financial statements based on the average of the results for the two years prior to exercise of the option.

The minority quotaholder of Transtecno S.r.l. has the right and obligation to dispose of its holdings during 2024, based on the results for the year prior to exercise of the option.

The minority quotaholder of Eurofluid Hydraulic S.r.l. has the right and obligation to dispose of its holdings on the approval date of the financial statements at 31 December 2025. The price of this option has been fixed by contractual agreement.

The minority shareholder of IPG Mouldtech India Pvt Ltd has the right and obligation to dispose of its holdings by 30 June 2027, based on the results for the year prior to exercise of the option.

The minority quotaholder of I.Mec S.r.l. has the right and obligation to dispose of its holdings in two tranches, the first starting sixty days after approval of the 2025 financial statements, and the second starting from approval of the 2027 financial statements.

Obligations of the Group to purchase minority holdings

Interpump Group S.p.A. is required to purchase the residual 20% interest in Servizi Industriali S.r.l. in due tranches, the first starting from approval of the 2024 financial statements, and the second starting from approval of the 2026 financial statements.

Furthermore, the Group is required to purchase the residual 20% interest in Draintech S.r.l., commencing from approval of the 2024 financial statements.

In compliance with the requirements of IFRS 10 and IFRS 3, Inoxihp S.r.l., Inoxpa Solution Moldova, Hydra Dyne Tech Inc., Transtecno S.r.l., Servizi Industriali S.r.l., Draintech S.r.l., Eurofluid Hydraulic S.r.l., IPG Mouldtech India Pvt Ltd and I.Mec S.r.l. have been consolidated in full, recording a payable representing an estimate of the present value of the exercise price of the options determined with reference to the business plans of the companies. Any changes in the above payable identified within 12 months of the date of acquisition, as a result of additional or better information, will be recorded as an adjustment of goodwill, while any changes emerging more than 12 months after the date of acquisition will be recognized in the income statement.

Investments in other companies, including subsidiaries, that have not been consolidated due to their insignificance are measured at fair value.

The changes in goodwill during the first nine months of 2023 were as follows:

				Changes due to
Company:	Balance at 31/12/2022	Increases in the period	(Decreases) in the period	foreign exchange differences	Balance at 30/09/2023
Water-Jetting	216,115	14,225	-	369	230,709
Hydraulics	538,829	5,466	-	1,568	545,863
Total goodwill	754,944	19,691	-	1,937	776,572

The increases during 3Q2023YTD relate to the acquisitions of IPG Mouldtech India Pvt Ltd, I.Mec S.r.l. and the Waikato Group, while changes due to foreign exchange differences relate to the goodwill denominated in foreign currencies.

2. Business sector information

Business sector information is supplied with reference to the operating sectors. The information required by IFRS by geographical area is also presented. The information provided about business sectors reflects the Group's internal reporting structure.

The values of components or products transferred between sectors are the effective sales price between Group companies, which correspond to the selling prices applied to the best customers.

Sector information includes directly attributable costs and costs allocated on the basis of reasonable estimates. The holding costs, i.e. remuneration of directors and statutory auditors of the parent company and functions of the Group's financial management, control and internal auditing department, and also consultancy costs and other related costs were booked to the sectors on the basis of revenues.

Business sectors

The Group comprises the following business sectors:

Water-Jetting sector. This sector is mainly composed of high and very high-pressure pumps and pumping systems used in a wide range of industrial sectors for the conveyance of fluids. High pressure plunger pumps are the main component of professional pressure washers. These pumps are also utilized for a broad range of industrial applications including car wash installations, forced lubrication systems for machine tools, and inverse osmosis systems for water desalination plants. Very high-pressure pumps and systems are used for cleaning surfaces, ships, various types of pipes, and also for removing machining burr, cutting and removing cement, asphalt, and paint coatings from stone, cement and metal surfaces, and for cutting solid materials. The Sector also includes high pressure homogenizers, mixers, agitators, piston pumps, valves, mechanical sifters, automated milking systems and other machines produced mainly for the food processing industry, but also used in the chemicals and cosmetics sectors.

Hydraulic sector. This sector includes the production and sale of power take-offs, hydraulic cylinders and pumps, directional controls, valves, rotary unions, hydraulic hoses and fittings, gears, orbital motors, steering systems (hydroguide) and other hydraulic components. Power take-offs are mechanical units used to transmit energy from the engine or gearbox of an industrial vehicle in order to drive, via hydraulic components, its various applications. These products, combined with other hydraulic components (spool valves, controls, etc.) allow the execution of special functions such as lifting tipping bodies, operating truck-mounted cranes and operating mixer trucks. Hydraulic cylinders are components of the hydraulic system of various vehicle types employed in a wide range of applications depending on the type. Frontend and underbody cylinders (single acting) are fitted mainly on industrial vehicles in the building construction sector, while double acting cylinders are employed in a range of applications: earthmoving machinery, agricultural machinery, cranes and truck cranes, waste compactors, etc. The hydraulic hoses and fittings are designed for use in a broad range of hydraulic systems and also for very high pressure water systems. Gears facilitate the mechanical transmission of energy, with applications in various industrial sectors including agriculture, materials handling, mining, heavy industry, marine & offshore, aerial platforms, forestry and sugar production. Orbital motors are used on industrial vehicles, in the construction sector, in earth-moving machines and in agricultural machinery. The Group also designs and makes piping systems for the industrial, naval and offshore sectors.

Interpump Group business sector information

(Amounts shown in €/000)

Cumulative at 30 September (nine months)
	Hydraulics		Water-Jetting		Elimination entries		Interpump Group
	2023	2022	2023	2022	2023	2022	2023	2022
Revenues outside the Group	1,268,636	1,148,454	451,806	396,485			1,720,442	1,544,939
Inter-sector revenues	2,179	2,491	3,987	3,006	(6,166)	(5,497)	-	-
Total revenues	1,270,815	1,150,945	455,793	399,491	(6,166)	(5,497)	1,720,442	1,544,939
Cost of sales	(868,879)	(796,938)	(250,589)	(217,035)	6,198	5,511	(1,113,270)	(1,008,462)
Gross industrial margin	401,936	354,007	205,204	182,456	32	14	607,172	536,477
% of revenues	31.6%	30.8%	45.0%	45.7%			35.3%	34.7%
Other operating income	26,186	26,351	5,609	6,511	(570)	(695)	31,225	32,167
Distribution expenses	(77,053)	(72,283)	(48,947)	(44,360)	217	366	(125,783)	(116,277)
General and administrative expenses	(108,644)	(100,105)	(52,871)	(47,201)	321	315	(161,194)	(146,991)
Other operating costs	(3,583)	(14,751)	(848)	(492)	-	-	(4,431)	(15,243)
EBIT	238,842	193,219	108,147	96,914	-	-	346,989	290,133
% of revenues	18.8%	16.8%	23.7%	24.3%			20.2%	18.8%
Financial income	15,194	20,976	8,423	6,111	(3,285)	(813)	20,332	26,274
Financial charges	(26,528)	(20,531)	(26,312)	(5,453)	3,285	813	(49,555)	(25,171)
Dividends	-	-	36,250	41,000	(36,250)	(41,000)	-	-
Equity method contribution	479	82	5	33	-	-	484	115
Profit for the period before taxes	227,987	193,746	126,513	138,605	(36,250)	(41,000)	318,250	291,351
Income taxes	(59,945)	(52,134)	(17,739)	(24,484)	-	-	(77,684)	(76,618)
Consolidated profit for the period	168,042	141,612	108,774	114,121	(36,250)	(41,000)	240,566	214,733
Attributable to:
Shareholders of Parent	166,379	139,951	108,073	113,606	(36,250)	(41,000)	238,202	212,557
Minority shareholders of subsidiaries	1,663	1,661	701	515	-	-	2,364	2,176
Consolidated profit for the period	168,042	141,612	108,774	114,121	(36,250)	(41,000)	240,566	214,733
Further information required by IFRS 8
Amortization, depreciation and write-downs	58,043	56,844	18,145	16,406	-	-	76,188	73,250
Other non-monetary costs	3,613	2,676	2,834	2,995	-	-	6,447	5,671

Interpump Group business sector information (Amounts shown in €/000)

	Hydraulics			Water-Jetting		Elimination entries	Interpump Group
	2023	2022	2023	2022	2023	2022	2023	2022
Revenues outside the Group	383,894	382,332	152,014	136,315			535,908	518,647
Inter-sector revenues	663	891	1,245	937	(1,908)	(1,828)	-	-
Total revenues	384,557	383,223	153,259	137,252	(1,908)	(1,828)	535,908	518,647
Cost of sales	(266,101)	(269,454)	(83,582)	(74,457)	1,908	1,828	(347,768)	(342,083)
Gross industrial margin	118,456	113,769	69,677	62,795	-	-	188,140	176,564
% of revenues	30.8%	29.7%	45.5%	45.8%			35.1%	34.0%
Other operating income	6,711	15,218	1,944	2,161	(130)	(166)	8,525	17,213
Distribution expenses	(23,806)	(23,974)	(16,627)	(15,260)	16	54	(40,417)	(39,180)
General and administrative expenses	(33,999)	(32,746)	(17,943)	(15,444)	107	112	(51,835)	(48,078)
Other operating costs	(1,128)	(7,948)	(281)	(86)	-	-	(1,409)	(8,034)
EBIT	66,234	64,319	36,770	34,166	-	-	103,004	98,485
% of revenues	17.2%	16.8%	24.0%	24.9%			19.2%	19.0%
Financial income	5,626	8,964	2,963	2,419	(1,207)	(266)	7,382	11,117
Financial charges	(6,229)	(7,559)	(9,014)	(2,654)	1,207	266	(14,036)	(9,947)
Dividends	-	-	-	-	-	-	-	-
Equity method contribution	130	200	25	55	-	-	155	255
Profit for the period before taxes	65,761	65,924	30,744	33,986	-	-	96,505	99,910
Income taxes	(16,235)	(16,451)	(8,158)	(8,239)	-	-	(24,393)	(24,690)
Consolidated profit for the period	49,526	49,473	22,586	25,747	-	-	72,112	75,220
Attributable to:
Shareholders of Parent	49,297	48,859	22,326	25,574	-	-	71,623	74,433
Minority shareholders of subsidiaries	229	614	260	173	-	-	489	787
Consolidated profit for the period	49,526	49,473	22,586	25,747	-	-	72,112	75,220
Further information required by IFRS 8
Amortization, depreciation and write-downs	20,111	19,082	6,333	5,583	-	-	26,444	24,665
Other non-monetary costs	961	557	1,211	827	-	-	2,172	1,384

Financial position

(Amounts shown in €/000)

	Hydraulics			Water-Jetting	Elimination entries		Interpump Group
	30	31	30	31	30	31	30	31
	September	December	September	December	September	December	September	December
	2023	2022	2023	2022	2023	2022	2023	2022
Assets by sector	2,155,531	2,071,141	942,278	831,227	(140,415)	(130,875)	2,957,394	2,771,493
Assets held for sale	-	1,291	-	-	-	-	-	1,291
Assets of the sector (A)	2,155,531	2,072,432	942,278	831,227	(140,415)	(130,875)	2,957,394	2,772,784
Cash and cash equivalents							348,982	358,275
Total assets							3,306,376	3,131,059
Liabilities of the sector (B)	540,500	559,297	182,992	173,656	(140,415)	(130,875)	583,077	602,078
Debts for the acquisition of equity investments							75,116	62,812
Payables to banks							37,623	30,928
Interest-bearing financial payables							837,497	869,131
Total liabilities							1,533,313	1,564,949
Total assets, net (A-B)	1,615,031	1,513,135	759,286	657,571	-	-	2,374,317	2,170,706
Further information required by IFRS 8 Investments measured using
the equity method	880	1,099	544	570	-	-	1,424	1,669
Non-current assets other than
financial assets and deferred tax assets	1,186,560	1,118,921	431,396	386,680	-	-	1,617,956	1,505,601

The 3QYTD and 3Q comparison of the Hydraulic Sector on an unchanged perimeter basis is as follows:

		3QYTD		3Q
	2023	2022	2023	2022
Revenues outside the Group	1,245,839	1,148,454	378,436	382,332
Inter-sector revenues	2,177	2,491	662	891
Total revenues	1,248,016	1,150,945	379,098	383,223
Cost of sales	(853,939)	(796,938)	(262,617)	(269,454)
Gross industrial margin	394,077	354,007	116,481	113,769
% of revenues	31.6%	30.8%	30.7%	29.7%
Other operating income	25,754	26,351	6,638	15,218
Distribution expenses	(76,160)	(72,283)	(23,544)	(23,974)
General and administrative expenses	(107,167)	(100,105)	(33,620)	(32,746)
Other operating costs	(3,576)	(14,751)	(1,128)	(7,948)
EBIT	232,928	193,219	64,827	64,319
% of revenues	18.7%	16.8%	17.1%	16.8%
Financial income	15,236	20,976	5,654	8,964
Financial charges	(26,267)	(20,531)	(6,139)	(7,559)
Equity method contribution	479	82	130	200
Profit for the period before taxes	222,376	193,746	64,472	65,924
Income taxes	(58,442)	(52,134)	(15,896)	(16,451)
Consolidated profit for the period	163,934	141,612	48,576	49,473
Attributable to:
Shareholders of Parent	162,271	139,951	48,347	48,859
Minority shareholders of subsidiaries	1,663	1,661	229	614
Consolidated profit for the period	163,934	141,612	48,576	49,473

		The 3QYTD and 3Q comparison of the Water-Jetting Sector at unchanged perimeter is as
follows:

		3QYTD		3Q
	2023	2022	2023	2022
Revenues outside the Group	435,226	396,485	141,080	136,315
Inter-sector revenues	3,870	3,006	1,209	937
Total revenues	439,096	399,491	142,289	137,252
Cost of sales	(239,444)	(217,035)	(76,173)	(74,457)
Gross industrial margin	199,652	182,456	66,116	62,795
% of revenues	45.5%	45.7%	46.5%	45.8%
Other operating income	5,383	6,511	1,797	2,161
Distribution expenses	(46,759)	(44,360)	(14,897)	(15,260)
General and administrative expenses	(49,839)	(47,201)	(16,117)	(15,444)
Other operating costs	(795)	(492)	(229)	(86)
EBIT	107,642	96,914	36,670	34,166
% of revenues	24.5%	24.3%	25.8%	24.9%
Financial income	8,366	6,111	3,445	2,419
Financial charges	(24,668)	(5,453)	(8,604)	(2,654)
Dividends	36,250	41,000	-	-
Equity method contribution	5	33	25	55
Profit for the period before taxes	127,595	138,605	31,536	33,986
Income taxes	(17,337)	(24,484)	(7,869)	(8,239)
Consolidated profit for the period	110,258	114,121	23,667	25,747
Attributable to:
Shareholders of Parent	109,557	113,606	23,407	25,574
Minority shareholders of subsidiaries	701	515	260	173
Consolidated profit for the period	110,258	114,121	23,667	25,747

€/000		Hydraulics		Water-Jetting		Total
	2023	2022	2023	2022	2023	2022
Cash flows from:
Operating activities	192,294	64,712	48,897	62,996	241,191	127,708
Investing activities	(108,407)	(75,062)	(53,986)	(34,427)	(162,393)	(109,489)
Financing activities	(46,634)	(50,582)	(46,990)	8,212	(93,624)	(42,370)
Total	37,253	(60,932)	(52,079)	36,781	(14,826)	(24,151)

The cash flows by business sector during 3QYTD were as follows:

Investing activities in the Hydraulic Sector included € 1,231 thousand associated with the acquisition of equity investments (€ 10,010 thousand in 3Q2022YTD). Investing activities in the Water-Jetting Sector included € 39,559 thousand associated with the acquisition of equity investments (€ 15,768 thousand in 3Q2022YTD).

The cash flows from the financing activities of the Water-Jetting Sector included proceeds from the sale of treasury shares to the beneficiaries of stock options totaling € 2,104 thousand (€ 9,591 thousand in 3Q2022YTD). There were no outlays for the purchase of treasury shares (€94,793 thousand in 3Q2022TYD), while dividend payments totaled € 32,533 thousand (€ 29,216 thousand in 3Q2022YTD). The financing activities of the Hydraulic Sector included the payment of dividends to companies in the Water-Jetting Sector totaling € 20,027 thousand (€20,500 thousand in 3Q2022YTD).

3. Acquisition of investments

Indoshell Automotive System India P.L. (now IPG Mouldtech India Pvt Ltd.), I.Mec S.r.l. and the Waikato Group were acquired during 2023.

The related PPAs (Purchase Price Allocations) have already been published, but not yet finalized; no significant changes are expected.

The PPA of Eurofluid Hydraulic S.r.l., also not yet finalized at 30 September 2023, remains unchanged with respect to that published in the Annual Financial Report at 31 December 2022.

4. Inventories and detail of changes in the Inventories allowance

	30/09/2023	31/12/2022
	€/000	€/000
Inventories, gross value	776,777	730,568
Allowance for inventories	(49,889)	(46,749)
Inventories	726,888	683,819

Changes in the allowance for inventories were as follows:

	3Q2023YTD	Year 2022
	€/000	€/000
Opening balances	46,749	42,757
Exchange rate difference	(162)	
Change in consolidation basis	1,968	2,278
Provisions for the period	2,628	5,380
Releases in the year to cover losses	(851)	(3,599)
Release of excess provisions in the period	(443)	(443)
Closing balance	49,889	46,749

5. Property, plant and equipment

Purchases and disposals

Interpump Group acquired tangible fixed assets during 3Q2023YTD totaling € 154,592 thousand, of which € 11,136 thousand via the acquisition of equity investments (€ 90,366 thousand in 3Q2022YTD, of which € 483 thousand via the acquisition of equity investments). Assets with a net carrying amount of € 4,745 thousand were divested in 3Q2023YTD (€ 5,318 thousand in 3Q2022YTD). A net capital gain was realized on the divested assets of € 3,238 thousand (€ 4,016 thousand in 3Q2022YTD).

Contractual commitments

At 30 September 2023 the Group has contractual commitments for the purchase of tangible fixed assets totaling € 4,949 thousand (€ 4,321 thousand at 30 September 2022). This amount mainly reflects commitments signed for the renewal of installations and the construction of new buildings.

6. Assets held for sale

At 31 December 2022, the Group classified a building among the assets held for sale, with reference to a preliminary sale agreement that was completed during 3Q2023.

7. Shareholders' equity

Share capital

Share capital comprises 108,879,294 ordinary shares with a unit par value of € 0.52 totaling € 56,617,232.88. However, the share capital reported in the financial statements amounts to € 55,622 thousand, since the nominal value of purchased treasury shares, net of those sold, has been deducted from share capital in compliance with the reference accounting standards. At 30 September 2023 Interpump S.p.A. holds 1,913,863 shares in the portfolio, corresponding to 1.758% of share capital, acquired at an average unit cost of € 38.7871.

Treasury shares purchased

The amount of the treasury shares held by Interpump Group S.p.A. is recorded in an equity reserve. The Group did not acquire any treasury shares during 3Q2023YTD (2,080,000 treasury shares were purchased in 3Q2022YTD for € 94,793 thousand).

Treasury shares sold

In the context of the stock option plans, a total of 74,000 options were exercised during the period, resulting in the receipt of € 2,104 thousand (a total of 694,180 options were exercised in 3Q2022YTD, with the collection of € 9,591 thousand).

Dividends

An ordinary dividend (coupon clipping date of 22 May 2023) of € 0.30 per share was distributed on 24 May 2023 (€ 0.28 in 2022).

Stock options

The Shareholders' Meeting held on 29 April 2022 approved a new stock option plan, the "Interpump Incentive Plan 2022/2024", that envisages the assignment of up to 2,250,000 options at an exercise price of € 38.6496 and, for options assigned after 29 April 2023, at the official price determined by Borsa Italiana on the trading day prior to their assignment. At the meeting held on 29 April 2022, the Board of Directors granted 1,620,000 options to Executive Chairman Fulvio Montipò and 45,000 options to Chief Executive Officer Fabio Marasi; while on 23 May 2022, 20 October 2022 and 28 April 2023, respectively 243,000, 6,000 and 35,000 options (including 15,000 for Chief Executive Officer Fabio Marasi) were granted to other beneficiaries. Overall, a total of 1,949,000 options have therefore been granted. The options can be exercised between 30 June 2025 and 31 December 2028. A total of 2,000 options were canceled in 3Q2023YTD (7,000 in 2022).

The fair value of the stock options granted during 2023 and the actuarial assumptions utilized in the binomial lattice model are as follows:

	Unit of
	measurement
Number of shares granted	no.	35,000
Grant date		28 April 2023
Exercise price		38.6496
Vesting date		30 June 2025
Fair value per option at the grant date	€	16.011
Expected volatility (expressed as the weighted average of the volatility values utilized in construction of the binomial lattice model)	%	34
Expected average duration of the plan life	years	3.93
Expected dividends (compared with share value)	%	1.00
Risk-free interest rate (calculated by linear interpolation of the Eur Composite AA rates at 28 April 2023)	%	3.5748

8. Financial income and charges

The first nine months are analyzed as follows:

	2023	2022
	€/000	€/000
Financial income
Interest income from liquid funds	2,350	408
Interest income from other assets	275	67
Exchange gains	17,293	25,510
Financial income to adjust estimated debt for commitment
to purchase residual interests in subsidiaries	327	166
Other financial income	87	123
Total financial income	20,332	26,274
Financial charges
Interest expense on bank loans	22,600	2,640
Lease interest expense	2,610	2,205
Interest expense on put options	2,339	349
Financial charges for adjustment of estimated debt for commitment
to purchase residual interests in subsidiaries	1,966	3,009
Foreign exchange losses	19,850	16,486
Other financial charges	190	482
Total financial charges	49,555	25,171
Total financial charges (income), net	29,223	(1,103)

The breakdown for 3Q is as follows:

	2023	2022
	€/000	€/000
Financial income
Interest income from liquid funds	1,007	173
Interest income from other assets	108	17
Exchange gains	5,935	10,825
Financial income to adjust estimated debt for commitment
to purchase residual interests in subsidiaries	295	-
Other financial income	37	102
Total financial income	7,382	11,117

Financial charges
Interest expense on bank loans	8,900	1,755
Lease interest expense	964	959
Interest expense on put options	691	92
Financial charges for adjustment of estimated debt for commitment
to purchase residual interests in subsidiaries	1,439	2
Foreign exchange losses	1,962	7,100
Other financial charges	80	39
Total financial charges	14,036	9,947
Total financial charges (income), net	6,654	(1,170)

9. Earnings per share

Basic earnings per share

Basic earnings per share are calculated as the consolidated net profit attributable to the owners of the Parent Company divided by the weighted average number of ordinary shares, as follows:

First nine months	2023	2022
Consolidated net profit attributable to the owners of the Parent company (€/000) Average number of shares in circulation Basic earnings per share for the period (€)	238,202 106,931,199 2.228	212,557 105,603,963 2.013
3Q	2023	2022
Consolidated net profit attributable to the owners of the Parent company (€/000) Average number of shares in circulation Basic earnings per share for the quarter (€)	71,623 106,964,331 0.670	74,433 104,989,939 0.709

Diluted earnings per share

Diluted earnings per share are calculated on the basis of diluted consolidated profit for the period attributable to the Parent company's shareholders, divided by the weighted average number of ordinary shares in circulation adjusted by the number of potentially dilutive ordinary shares. The calculation is as follows:

First nine months	2023	2022
Consolidated net profit attributable to the owners
of the Parent company (€/000)	238,202	212,557
Average number of shares in circulation	106,931,199	105,603,963
Number of potential shares for stock option plans (*)	434,642	844,379
Average number of shares (diluted)	107,365,841	106,448,342
Earnings per diluted share for the period (€)	2,219	1.997
3Q	2023	2022
Consolidated net profit attributable to the owners
of the Parent company (€/000)	71,623	74,433
Average number of shares in circulation	106,964,331	104,989,939
Number of potential shares for stock option plans (*)	362,830	479,655
Average number of shares (diluted)	107,327,161	105,469,594
Earnings per diluted share for the quarter (€)	0.667	0.706

(*) calculated as the number of shares assigned for in-the-money stock option plans multiplied by the ratio of the difference between the average share price during the period and the exercise price on the numerator, to the average share price during the period on the denominator.

10. Transactions with related parties

The Group has relations with non-consolidated subsidiaries and other related parties at arm's length conditions considered to be normal in the respective reference markets, taking account of the characteristics of the goods and services rendered. Transactions between Interpump Group S.p.A. and its consolidated subsidiaries, which are related parties of the company, were eliminated from the interim consolidated financial statements and are not detailed in these notes.

The effects on the consolidated income statements for the first nine months of 2023 and 2022 are shown below:

	3Q2023YTD
						%
		Non		Other	Total	incidence
	Consolidated	consolidated		related	related	on F.S.
(€/000)	Total	subsidiaries	Associates	parties	parties	caption
Revenues	1,720,442	569	-	767	1,336	0.1%
Cost of sales	1,113,270	325	-	5,067	5,392	0.5%
Other operating income	31,225	3	-	-	3	0.0%
Distribution expenses G&A	125,783	119	-	572	691	0.5%
expenses	161,194	-	-	486	486	0.3%
Financial charges	49,555	-	-	477	477	1.0%
			3Q2022YTD
						%
		Non		Other	Total	incidence
	Consolidated	consolidated		related	related	on F.S.
(€/000)	Total	subsidiaries	Associates	parties	parties	caption
Revenues	1,544,939	1,300	-	548	1,848	0.1%
Cost of sales	1,008,462	824	-	5,141	5,965	0.6%
Other operating income	32,167	3	-	-	3	0.0%
Distribution	116,277	30	-	622	652	0.6%
expenses G&A
expenses	146,991	-	-	491	491	0.3%
Financial charges	25,171	-	-	225	225	0.9%

		30 September 2023
						%
		Non		Other	Total	incidence
	Consolidated	consolidated		related	related	on F.S.
(€/000)	Total	subsidiaries	Associates	parties	parties	caption
Trade receivables	459,554	1,444	-	300	1,744	0.4%
Trade payables	278,798	58	-	685	743	0.3%
Interest-bearing
financial payables
(current and
non-current portions)	837,497	-	-	15,527	15,527	1.9%

	30 September 2022
						%
		Non		Other	Total	incidence
	Consolidated	consolidated		related	related	on F.S.
(€/000)	Total	subsidiaries	Associates	parties	parties	caption

The effects on the consolidated statement of financial position at 30 September 2023 and 2022 are described below:

(€/000)	Consolidated Total	Non consolidated subsidiaries	Associates	Other related parties	Total related parties	incidence on F.S. caption
Trade receivables Trade payables Interest-bearing financial payables	430,997 295,110	1,668 109	- -	344 1,375	2,012 1,484	0.5% 0.5%
(current and non-current portions)	925,861	-	-	17,044	17,044	1.8%

Relations with non-consolidated subsidiaries

Relations with non-consolidated subsidiaries are as follows:

(€/000)	Receivables		Revenues
	30/09/2023	30/09/2022	30/09/2023	30/09/2022
Interpump Hydraulics Perù	1,288	1,313	305	317
Interpump Hydraulics Russia	68	161	169	845
General Pump China Inc.	88	214	98	140
Total subsidiaries	1,444	1,688	572	1,302

(€/000)	Payables	Costs
	30/09/2023	30/09/2022	30/09/2023	30/09/2022
General Pump China Inc.	52	100	438	850
Interpump Hydraulics Perù	6	9	6	5
Interpump Hydraulics Russia	-	-	-	-
Total subsidiaries	58	109	444	855

Relations with associates

The Group does not hold investments in associated companies.

Transactions with other related parties

The 3Q2023YTD income statement includes consultancy provided by entities associated with the directors and statutory auditors of Group companies totaling € 35 thousand (€ 43 thousand in 3Q2022YTD). The consultancy costs incurred in 3Q2023YTD have been allocated in full to general and administrative expenses (also in 3Q2022YTD). Revenues in the period to 30 September 2023 included revenues from sales to companies held by Group shareholders or directors totaling € 767 thousand (€ 548 thousand in the first nine months of 2022). In addition, the cost of sales includes purchases from companies controlled by minority shareholders or the directors of Group companies totaling € 4,805 thousand (€ 4,796 thousand in 3Q2022YTD).

11. Disputes, Contingent liabilities and Contingent assets

The Parent company and some of its subsidiaries are directly involved in lawsuits for limited amounts. The settlement of said lawsuits is not expected to generate any significant liabilities for the Group that are not covered by the risk provisions already made. There are no substantial changes to report in relation to the disputes or contingent liabilities that were outstanding at 31 December 2022.

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Interpump Group

4294_er_2023-11-26_fedbc601-fb52-4e14-8e9f-6b29f4d74605.pdf

Interim Board of Directors' Report for 3Q2023

Interpump Group S.p.A. and subsidiaries

Contents

Board of Directors

Board of Statutory Auditors

Independent Auditors

PERFORMANCE INDICATORS

Consolidated income statements for the first nine months

SIGNIFICANT EVENTS IN THE FIRST NINE MONTHS

REVENUES

PROFITABILITY

CASH FLOW

CAPITAL EXPENDITURE

INTERCOMPANY AND RELATED PARTY TRANSACTIONS

CHANGES IN GROUP STRUCTURE DURING 3Q2023YTD

EVENTS OCCURRING AFTER THE CLOSE OF 3Q2023

3Q consolidated income statements

REVENUES

PROFITABILITY

BUSINESS OUTLOOK

Financial statements and notes

Consolidated statement of financial position

Consolidated income statements for the first nine months

Comprehensive consolidated income statements for the first nine months

Consolidated cash flow statements for the first nine months

Consolidated statement of changes in shareholders' equity

3Q consolidated income statements

3Q comprehensive consolidated income statements

Notes to the consolidated financial statements

General information

Basis of preparation

Accounting standards

Notes to the consolidated financial statements at 30 September 2023

1. Scope of consolidation and goodwill

Interim Board of Directors' Report at 30 September 2023 – Interpump Group

Rights of minorities to dispose of their holdings (put options)

Rights and obligations of minorities to dispose of their holdings (put & call options)

Obligations of the Group to purchase minority holdings

2. Business sector information

Business sectors

Interpump Group business sector information

Interpump Group business sector information (Amounts shown in €/000)

Financial position

The cash flows by business sector during 3QYTD were as follows:

3. Acquisition of investments

4. Inventories and detail of changes in the Inventories allowance

5. Property, plant and equipment

Purchases and disposals

Contractual commitments

6. Assets held for sale

7. Shareholders' equity

Share capital

Treasury shares purchased

Treasury shares sold

Dividends

Stock options

8. Financial income and charges

9. Earnings per share

Basic earnings per share

Diluted earnings per share

10. Transactions with related parties

Relations with non-consolidated subsidiaries

Relations with associates

Transactions with other related parties

11. Disputes, Contingent liabilities and Contingent assets

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