Sabaf — Environmental & Social Information 2021

Jun 29, 2021

We burn for technology and safety.

ITALIAN SUSTAINABILITY WEEK Borsa Italiana

Table of contents

• I. COMPANY OVERVIEW
• II. BUSINESS PLAN 2021 2023
• III. ESG PERFORMANCE

COMPANY OVERVIEW

Sabaf Group Timeline and history

Sabaf Group Business diversification in three divisions

Sabaf Group Product range

GAS

• Standard Burners .
• Special Burners .
• Professional Burners .
• Oven and Grill Burners .
• Gas Valves ●
• Gas Oven Thermostats .
• Microswitches & Accessories .

HINGES

• Ovens .
• Dishwashers .
• Special applications .
• Small compartments ●
• Catering appliances ●

ELECTRONIC COMPONENTS

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

Total Group employees

at 31 May 2021

1,488

Sabaf Group Industrial Footprint: present and near future

SABAF S.P.A. SABAF TURKEY C.M.I. POLAND Valves and thermostats Standard burners Dishwasher hinges Standard burners 233 employees 57 employees Special burners In 2021 new plant 596 employees OKIDA ELEKTRONIK A.R.C. S.R.L. Electronics for household Professional burners appliances 21 employees 202 employees C.M.I. ITALY Oven hinges SABAF APPLIANCE Dishwasher hinges COMPONENTS (KUNSHAN) 168 employees Wok burners (3) 8 employees FARINGOSI=HINGES S.R.L. Oven hinges SABAF MESSICO ARC HANDAN JV Dishwasher hinges 60 employees Professional wok burners SABAF DO BRASIL LTDA SABAF INDIA Standard burners Special burners 143 employees S SABAF SABAF

Sabaf Group Market

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

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

No customer represents more than 11% of total Group sales

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

C

Sabaf Group Product & technology

Product Innovation:

about 88 active patents

Know-how:

• Mechanical: forefront A process technology internal development of special machinery, high performance molds for robotic die-casting, high speed and high precision tools not available on the market

• Electronic: strong skills in new product development

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

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

BUSINESS PLAN 2021 - 2023

Sabaf: a sustainable business The centrality of the Person

Sabaf: a sustainable business Business Model

Business plan 2021 - 2023 Key points

KEY POINTS

Business plan 2021 - 2023 Materiality Analysis

The materiality analysis takes into consideration the most significant topics for the Group and its Stakeholders

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MATERIALITY MATRIX

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VERY SIGNIFICANT

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211 7

SIGNIFICANCE FOR SABAF

1 Use of raw materials and materials Emissions into the atmosphere, waste and management of environmental 2 impacts 3 Protection of Human and Workers' Rights Remuneration and incentive policy ৰা 5 Development of resources and skills 6 Health and safety of personnel and contractors 1 Diversity and equal opportunities Management of relations with suppliers, supplier assessment and contractual 8 conditions 9 Industrial relations 10 Compliance with the competitive system 11 Customer satisfaction and customer support Research and innovation of products and processes also with reference to 12 safety and environmental Performance 13 Partnership with multinational groups 14 Production quality and eco-efficiency

Business plan 2021 - 2023 Sustainability

66 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 ووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووووو

SABAF GROUP VISION		Area	KPI	SDGs
«We believe in a world in which all		Development of resources and skills	Hours of training per capita	4 QUALITY COUCATION
people's basic needs, such as home,
food and reliable energy, are fulfilled in			Accident frequency rate	3 AND WELL-BEING O ECONOMIC GROW -n/a
an environmentally sustainable way. We promote a company that improves	2	Health and safety	Accident severity rate
the quality of the environment and the				7 CLEAN ENERGY O ECONOMIC GROWTH
communities where we live and work»	3	Eco-efficiency and Emissions into the	tCO2eq emissions on sales	-65 13 CLIMATE
		atmosphere		2 CONSUMPTION CO

Business plan 2021 - 2023 Sustainability: 2023 targets

	Area	RPI	2023 TARGETS (VS.2020)
1	Development of resources and skills	Hours of training per capita	+40%

2	Health and safety	Accident frequency rate
		Accident severity rate	-44%

Sabaf: a sustainable business Global compact and CDP

ESG PERFORMANCE

ESG Performance Reporting

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ESG Performance Generated and distributed economic value

(thousand of Euro)	20220	2019	Change
ECONOMIC VALUE GENERATED BY THE GROUP	190,001	160,095	29,906
ECONOMIC VALUE DISTRIBUTED BY THE GROUP	161,995	140,762	21,233
Remuneration of suppliers Remuneration of employees Remuneration of lenders Remuneration of shareholders Remuneration of Public Administration Charity and donations	112,014 43,700 2,146 3,924 150 61	96,626 37,103 1,339 6,060 (408) 42	15,388 6,597 807 (2,136) 558 19
ECONOMIC VALUE RETAINED BY THE GROUP	28,006	19,333	8,673
Depreciations and amortisation Provisions Use of provisions Reserves	16,968 612 (10) 10,436	15,183 91 (64) 4,123	1,785 521 54 6,313

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ESG Performance Environment - Risks, objectives and actions

ESG Performance Environment - Most important innovations

*Estimation based on volumes manufactured by Sabaf

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S SABAF|SABOP

ESG Performance

Environment - Most important innovations

ESG Performance Environment - Materials

Materials used and recyclability

	Materials used (tons)	2020	2019	2018
Raw materials	Brass	638	481	789
	Aluminium alloys	9.188	6.476	7,831
	Zamak	10	11	33
	Steel	26,046	21,881	7,861
	Cast iron	વેદ	142	137
	Enamel	246	193	189
	Bronze	-	1
	Copper	8	-	-
	Stainless steel	103	116	-
	Cardboard	706	397	454
Packaging Materials	Plastic	220	136	140

Wood

479 |

683

503

85% of brass and 50% of aluminium alloys are produced by scrap recycling

Increases in steel consumption

• higher production levels compared to the previous year
• inclusion in the scope of consolidation of C.M.I.

Cardboard and wood are renewable materials

ESG Performance Environment - Energy

Energy sources

	2020	2019	2018
Electricity from non-renewable sources (MWh)	35,220	28,526	30,225
YoY change	+23%	-6%	-2%
Electricity from renewable sources (MWh)	158	50
Natural gas (m3 x 1000)	4.478	3.740	3,918
YoY change	+20%	-5%	-3%
Diesel oil (1 x 1000)	57	51	21
Petrol (1 x 1000)	17	10
LPG (I x 1000)		0.09
TOTAL CONSUMPTION (GJ)	290,125	238,887	249,866
TOTAL CONSUMPTION (MWh)	80,655	66,411	69,463
YoY change	+21%	-4%	-8%

Energy intensity

Energy Intensity	2020	2019	2018
KWh on € of turnover	0.436	0.426	0.460
YoY change	+2%	-7%	-6%

Main sources
	Electricity	Natural Gas

ESG Performance Environment - Water

Water

Water consumption (m3)	2020	2019	2018
from municipal water supply	50,682	56.409	110,655
of which freshwater	50,682	56,409	110,655
of which other water	-
from well	27,675	35,516	29.185
of which freshwater	27,675	35,516
of which other water
TOTAL	78,357	91,925	139,840
YoY change	-15%	-34%	+24%

No industrial waste water

Water used in production processes at Ospitaletto is treated in concentration plants (during 2019 also started up in Sabaf Brasil)

At Ospitaletto factory, there is a plant for the collection of rainwater for use in industrial activities

ESG Performance Environment - Emissions

Emissions

CO2 Emissions (tons)		2020	2019	2018
Scope 1 Direct emissions from refrigerant gases	tCO2eq	162	59
Scope 1 Direct emissions from fuel consumption	tCO2	9.247	7.734	8.022
Total direct emissions	tCOzeq	9.409	7.793	8.022
Scope 2 Indirect emissions (location based)	tCO2	11.998	9.979	10.498
Scope 2 Indirect emissions (market based)	tCO2	14.969	12.484	13,133
Total emissions (location based)	tCO2eq	21.407	17.772	18.520
YoY change		+20%	-4%	-8%

Emissions on turnover

		2020	2019	2018
Scope 1 Direct emissions	tCO2eq	9.409	7,793	8,022
Scope 2 Indirect emissions (market based)	tCO2	14.969	12.484	13,133
Total emissions	tCO2eq	24.378	20.277	21,155
Turnover	EUR	184,906	155,923	150.642
Emissions on turnover		1322	130	140
YoY change		+1%	-8%

ESG Performance Employees - Risks, objectives and actions

• Respect of human rights .
• Create a group of motivated people ●
• Produce profits respecting rights of workers
• Safer and comfortable workplaces
• Avoid discrimination and favouritism
• Value and respect diversity ●
• · Adopt criteria of merit and competence
• Avoid harassment of workers
• · Enhance contribution of human capital
• · Clear and transparent information

• Open dialogue with trade unions

• · Full compliance with applicable laws, directives, regulations and other requirements

• Full implementation of Charter of Values
• · Constant monitoring of human rights, health and safety aspects
• Individual responsibility within shared rules of behaviour

ESG Performance Employees - Main figures

Employees by gender

	2020 /			2019			2018
	o
I otal				724					254 760

Employees by contract

	2020			2019			2018
	o	Gr	င့္မွာ ေ	of	ﻬ	မွှေတွေ	of o	o+	రా రాజులు రా
Permanent	711	432	1,143	621	369	990	487	247	734
Temporary	13	12	25	36	ഗ	45	19	1	26
Total	724		444 1,168	657		378 1,035	506	254 /	760

Employees by qualification

	2020	2019	2018
Degree	15.4%	14.9%	14.1%
High school diploma	46.2%	44.2%	45.5%
Middle school diploma	36.5%	39.7%	40.1%
Elementary school diploma	1.9%	1.2%	0.3%
Total		100.0% 100.0% 100.0%

Employees by age

	2020	2019	2018
< 30 years old	18.9%	17.2%	13.9%
31- 40 years old	34.5%	35.1%	39.9%
41 - 50 years old	31.6%	31.8%	31.8%
over 50 years old	15.0%	15.9%	14.4%
Total	100.0%	100.0%	100.0%

Employees by length of service

	2020	2019	2018
< 5 years	44.5%	37.2%	26.7%
6 - 10 years	9.0%	12.3%	12.9%
11 - 20 years	31.9%	36.6%	46.7%
over 20 years	14.6%	13.9%	13.7%
Total		100.0% 100.0% 100.0%

Turnover rate

	2020	2019	2018
Total women	9.69% -		7.14% 9.06%
Total men		11.46% 10.19% 11.07%
Total		10.79% 9.08% 10.39%

ESG Performance Employees – Training and Safey

Total hours of training received

TOTAL HOUTS OF TTATTITIE TECCLACA	2020	2019	2018
Training for new employees, apprentices, training contracts	2.161	3.642	5.662
Technical training and information systems	3.216	2.433	2.824
Quality, safety, environment, energy and social responsibility	5.058	3.957	4,689
Administration and organisation	540	1.228	1,278
Foreign languages	738	1.774	1,759
Other (e.g. lean philosophy / production/office)	942	2.803	752
Total hours of training received	12,655	15,837	16,963
Hours of training provided by internal trainers	5.252	1.263	9.154
Total hours of training	17.907	17.100	26,119
YoY change	+4.5%	252.7%

Avarage hours of training per capita	2020	2019	2018
Total hours of training received	12.655	15.837	16.963
No. of employees	1.168	1.035	760
Avarage hours of training per capita	10.8	15.3	223
YoY change	-41.2%	-45.9%

Health and Safety	2020	2019	2018
Accident frequency rate	16.10	10.57	23.49
Accident severity rate	0.11	0.17	0.17
Safety rate	177.1	181.6	411.1
YoY change	-2.5%	-126.4%

ESG Performance Employees - Health and Safety

ESG Performance Supply Chain Management

RISK BASED APPROACH

SUPPLY CHAIN MANAGEMENT POLICY

RELATIONS WITH SUPPLIERS

• Long-term collaboration
• Fairness in negotiation
• Integrity .
• Sharing of growth strategies

Purchase Analysis

Company	Total 2020 purchases (€/000)	% Domestic purchases	Total 2019 purchases (€/000)	% Domestic purchases
Sabaf S.p.A.	71,882	75%	56.466	79%
Faringosi-Hinges S.r.l.	8,102	100%	8.331	99%
ARC S r.l.	2,483	85%	3.466	83%
CMI Group	20,391	98%	24,916	71%
Sabaf Turkey	12,506	55%	10.242	72%
Okida	7.917	72%	5.537	68%
Sabaf do Brasil	12.341	84%	7.491	95%
Sabaf China	542	97%	534	98%

Socially responsible approach along the supply chain

Priority to suppliers with certified Quality and Environmental Systems

Sabaf Charter of values shared with suppliers

Very short payment terms (mainly 30 days) agreed for small suppliers

ESG Performance Public Administration and Community

PUBLIC ADMINISTRATION Transparency Fairness Open dialogue . Promotion of shared and sustainable industrial developement DD INDUSTRIAL ASSOCIATIONS • Founder of APPLiA Italia, the Italian association of household appliance component manufacturers

Member of Associazione Industriale Bresciana

UNIVERSITIES & STUDENT WORLD

• Company visits
• Case study in conferences about best practices on sustainability

CHARITABLE INITIATIVE & DONATIONS

• · In 2019, Sabaf S.p.A. joined the Fondazione Spedali Civili of Brescia to which it made a donation during 2020, as part of the fundraising set up to deal with the Covid emergency
• · Support for the ANT Foundation, which provides free specialist medical home-care to cancer patients and cancer prevention activities
• · In 2020 donations for the fight against COVID-19
• Support to AVSI (we support 20 children living in different . countries of the world)

ESG Performance Corporate governance

High profile of Indipendent Directors

Full compliance with the Corporate Governance Code of Listed Companies

Social and environmental aspects are responsibility of the BoD

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Sabaf Group Main Shareholders

Pietro Iotti, CEO of Sabaf, owns 1.5% of shares

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Sabaf Group Stock price

Market cap: € 303 mn at June 25th, 2021

2021 DIVIDEND

• € 0.55 per share 1
• Ex-date: 31st May 2021 .
• Dividend yield: 2.4% .
• Payout ratio: 45.4% .

Sabaf performance
Change
1-month (%)	+8.7%
3-month (%)	+16.4%
6-month (%)	+70.8%
12-month (%)	+140.8%
YTD (%)	+74.7%

DISCLAIMER

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

The Company's business is in the domestic appliance industry, with special reference to the gas cooking sector, and its outlook is predominantly based on its interpretation of what it considers to be the key economic factors affecting this business. Forwardlooking statements with regard to the Group's business involve a number of important factors that are subject to change, including; the many interrelated factors that affect consumer confidence and for durable goods, general economic conditions in the Group's markets; actions of 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 Finanza), the company's Financial Reporting Officer Ganhuca Beschi declares that the financial presentation this financial presentation corresponds to the company's records, books and accounting entries.

For further information, please contact

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