Sabaf — Environmental & Social Information 2022

Sep 8, 2022

ITALIAN SUSTAINABILITY WEEK

Borsa Italiana

6 th - 8 th September 2022

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Table of contents

• I. COMPANY PROFILE
• BUSINESS DIVERSIFICATION
• PRODUCT RANGE
• SABAF INDUCTION
• HY4HEAT PROJECT

II. SABAF: A SUSTAINABLE BUSINESS

• SUSTAINABILITY IN THE BUSINESS PLAN 2021 2023
• MATERIALTY ANALYSIS
• EU TAXONOMY

III. ESG PERFORMANCE

• ENVIRONMENT
• EMPLOYEES
• PUBLIC ADMINISTRATION AND COMMUNITY
• CORPORATE GOVERNANCE

COMPANY PROFILE

Sabaf Group: leading producer of components for household appliances

Sabaf Group: product range

▪ Catering appliances

User interface

Sabaf Induction: business strategy

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

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

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

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

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

2022

The Sabaf Group enters the

INDUCTION COOKING SECTOR

Sabaf Induction: business strategy

▪ Team of more than 50 electronic engineers

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

Sabaf Induction: business strategy

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

Hydrogen: project Hy4Heat

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

The SABAF Group, through its subsidiary ARC, is involved in Work Package 4, which covers cooking and heating appliances. ARC has developed and produced the burners that have now been specified on the world's first UKCA Certified ranges of 100% hydrogen hobs and cookers.

These have been installed on the cooking appliances Glen Dimpex at HyHome, two purpose built houses demonstrating hydrogen appliances in a 'real life' scenario at Low Thornley, near Gateshead in the North of England

Immediately following the Hy4Heat project, cooking appliances incorporating ARC burners will be specified for the Community Trial involving 300 homes commencing in 2022. Beyond the Community Trial, the UK Government intends to commission a 'Village Trial' with around 2,500 homes in 2025 and a 'Town Trial' (10,000 homes) in the latter part of the decade prior to potentially converting the whole UK gas grid to hydrogen over future years

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

SABAF: A SUSTAINABLE BUSINESS

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

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

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Sabaf: a sustainable business

Sustainability in the Business plan 2021 - 2023

E-MARKET SDIR
CERTIFIED

	Unit of KPI measurement	2023 Target vs. 2020	2020 ACTUAL	2021 TARGET	2021 ACTUAL	2022 TARGET	2023 TARGET
1	CO tCO / millions of 2 2eq emissions/Revenue Euro	-14%	132	128	111	120	114
2	Hours of training per h capita	+40%	13.9	11.0	20.4	13	15
3	Summary indicator of - injuries	-44%	177	140	327	120	100

NOTES

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

Sabaf: a sustainable business Materiality analysis

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

Sabaf: a sustainable business

EU Taxonomy (Regulation (EU) 2020/852)

ESG PERFORMANCE - ENVIRONMENT

ESG Performance - Environment

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

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

ESG Performance - Environment

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

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

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

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

ESG Performance - Environment

CO² Emissions of gas hobs vs. electric induction hobs

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

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

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

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

ESG Performance - Environment High efficiency burners

ESG Performance - Environment Energy

ENERGY INTENSITY		2021	2020	2019
KWh on € of turnover	MWh	0.378	0.436	0.426
YoY change		-13%	+2%	-7%

ENERGY SOURCES		2021	2020	2019
Electricity from renewable sources	MWh	4,853	158	50
YoY change		+2,972%	+216%	-
Electricity from non-renewable sources	MWh	39,276	35,220	28,526
YoY change		+12%	+23%	-6%
Natural gas	m3 x 1000	5,474	4,478	3,740
YoY change		+22%	+20%	-5%
Diesel	l x 1000	79	57	51
Petrol	l x 1000	12	17	10
LPG	l x 1000	0.10	0	0.09
TOTAL CONSUMPTION	(GJ)	358,285	290,125	238,887
TOTAL CONSUMPTION	(MWh)	99,603	80,655	66,411
YoY change		+23%	+21%	-4%

Electricity from renewable sources is produced by a photovoltaic plant operating at the C.M.I. plant (151 MWh in 2021) or comes from the purchase of I-REC certificates (4,702 MWh in 2021).

In the last three years the increase of energy consumption was due to the increase of business volumes

Sabaf S.p.A., Sabaf Brazil and Sabaf Turkey use natural gas as an energy source for the casting of aluminum and for the firing of enameled lids. The production of other Group companies does not use methane as an energy source.

ESG Performance - Environment Emissions scope 1 + scope 2

CO EMISSIONS (tons) 2		2021	2020	2019
Scope 1 (direct emissions)	tCO 2eq	11,493	9,409	7,793
from refrigerant gases	tCO 2eq	231	162	59
from fuel consumption	tCO 2	11,262	9,247	7,734
Scope 2 (indirect emissions) - location based	tCO 2	14,150	11,998	9,979
Scope 2 (indirect emissions) - market based	tCO 2	17,641	14,969	12,484
Total emissions (location based)	tCO 2eq	25,643	21,407	17,772
YoY change		+20%	+20%	-4%

EMISSIONS ON TURNOVER		2021	2020	2019
Scope 1 (direct emissions)	tCO 2eq	11,493	9,409	7,793
Scope 2 (indirect emissions) - market based	tCO 2	17,641	14,969	12,484
Total emissions	tCO 2eq	29,134	24,378	20,227
Turnover	Eur	263,259	184,906	155,923
Emissions on turnover		111	132	130
YoY change		-19%	+1%	-8%

• 1 Purchased Goods and Services
• 2 Capital Goods
• 3 Fuel- and Energy-Related Activities Not
• Included in Scope 1 or Scope 2
• 4 Upstream Transportation and Distribution
• 5 Waste Generated in Operations
• 6 Business Travel
• 7 Employee Commuting
• 11 Use of Sold Products
• 12 End-of-Life Treatment of Sold Products
• 13 Downstream Leased Assets

ESG Performance - Environment Carbon Disclosure Project – Climate change

2020: Sabaf joins for the first time

2021: Rating B- (In CDP's Climate Change section, on a scale ranging from A to F

2022: Sabaf confirmed its partecipation

The aim is to make environmental performance central to business and investment decisions by leveraging information transparency

ESG Performance - Environment Water

MAIN SUSTAINABILITY ACTIONS

All the water used in the production processes by Group companies is destined for disposal or internal recycling for reuse in company processes: no industrial waste water

The water used in the die-casting and enamelling processes at the plant of Ospitaletto is treated in chemical/physical concentration plants: reduction of quantities of water required and waste produced

Since 2019, a concentration plant has also been in operation at the Brazilian production site

At the Ospitaletto plant, there is a plant for the collection of rainwater intended for use in industrial activities. In 2021, 2,708 m³ were collected.

WATER CONSUMPTION m3	2021	2020	2019
From waterworks	69,109	50,682	56,409
From well	30,630	27,675	35,516
Total	99,739	78,357	91,925
YoY change	+27%	-15%	-34%

ESG PERFORMANCE - EMPLOYEES

ESG Performance - Employees Diversity and equal opportunities

E-MARKET
CERTIFIED

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		2021		2020		2019
PERSONNEL BY GENDER	no.	%	no.	%	no.	%
Men	778	60.9	724	62.0	657	63.5
Women	500	39.1	444	38.0	378	36.5
Total	1,278	100.0	1,168	100.0	1,035	100.0

PERSONNEL BY CONTRACT		2021		2020		2019
		no.	%	no.	%	no.	%
	Men	776	60.7	722	61.8	651	62.9
Full time	Women	446	34.9	387	33.1	327	31.6
	Total	1,222	95.6	1,109	94.9	978	94.5
	Men	2	0.2	2	0.2	6	0.6
Part-time	Women	54	4.2	57	4.9	51	4.9
	Total	56	4.4	59	5.1	57	5.5
Total		1,278	100.0	1,168	100.0	1,035	100.0

PART-TIME CONTRACT		2021		2020		2019
		no.	%	no.	%	no.	%
Part-time	Men	2	3.6	2	3.4	6	10.5
	Women	54	96.4	57	96.6	51	89.5
Total		56	100.0	59	100.0	57	100.0

Sabaf is constantly committed to ensuring equal opportunities for women employees, who at the end of 2021 represent 39.1% of the workforce (38% in 2020)

The Group, in accordance with the organisational and production requirements, cares the family requirements of its employees. To date, most of the demands for reduced working time made by workers have been met

ESG Performance - Employees Personell by age

The low average age of Group employees (39.5 years old) confirms the strategy of hiring young workers, giving priority to training and internal growth rather than acquiring skills from outside.

The age of the youngest employees in the Group is 20 years old for Italy, 20 years old for Poland, 19 years old for Turkey, 17 years old for Brazil and 32 years old for China.

PERSONELL BY AGE (%)	2021	2020	2019
< 30 years old	20.6	18.9	17.2
31 - 40 years old	35.4	34.5	35.1
41 - 50 years old	27.8	31.6	31.8
Over 50 years old	16.2	15.0	15.9
Total	100.0	100.0	100.0

ESG Performance - Employees Personell by contract

PERSONNEL BY CONTRACT (no.)	2021	2020	2019
Permanent	1,268	1,143	990
Fixed term	10	25	45
Total	1,278	1,168	1,035

At 31 December 2021, there are 1,268 employees with permanent contracts equal to 99.2% of the total (97.9% at the end of 2020) and 10 employees with a fixed-term contract, equal to 0.8% of the total (2.1% at the end of 2020)

PERSONNEL WITH TEMPORARY WORK CONTRACT OR SIMILAR AND TRAINESS (no.)	2021	2020	2019
Agency workers	198	155	42
Trainees	11	8	2

The agency workers increase registered in 2021 was due to the exceptional peaks of business volumes

ESG Performance - Employees Workforce stability

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over 20 years	13.8	14.6	13.9
11 - 20 years	27.9	31.9	36.6
6 - 10 years	9.9	9.0	12.3
< 5 years	48.4	44.5	37.2

PERSONELL BY LENGTH OF SERVICE (%) 2021 2020 2019

EMPLOYEE HIRE (H) AND		2021		2020		2019
TURNOVER (T) (%)	H	T	H	T	H	T
Women	22.4	11.2	24.5	9.7	8.7	7.1
Men	28.8	21.9	20.7	11.5	11.6	10.2
Total	26.3	17.7	22.2	10.8	10.5	9.1

Sabaf is aware of the fundamental importance of having a stable and qualified workforce that is a key factor in maintaining its competitive advantage

ESG Performance - Employees Training

AVERAGE HOURS OF TRAINING PER		2021			2020			2019
CAPITA (HOURS)	Men	Women	Total	Men	Women	Total	Men	Women	Total
Blue collars	18.2	7.6	13.8	11.6	4.4	8.7	18.2	10.0	15.1
White collars and middle managers	29.2	34.8	31.0	16.9	18.2	17.3	16.9	15.2	16.3
Managers	11.6	11.1	11.6	24.7	4.0	22.6	11.6	3.5	10.8
Total employees	20.6	12.5	17.4	13.2	7.0	10.8	17.8	11.0	15.3
Agency workers	44.4	32.5	39.7
Total personnel	23.8	15.2	20.4

In 2021, the number of training hours provided to employees was 22,279 (12,655 in 2020, when training activities were slowed down due to the health emergency). In addition to this, 7,859 hours of training were received by agency workers (5,725 in 2020)

ESG Performance - Employees

Occupational Health and Safety and working Environment

Number of injuries x 1,000,000/hours worked

INJURY RATE	2021	2020	2019
Recordable injury rate	15.16	16.10	9.91
High-consequence injury rate	0.43	0.00	0.66
Fatality rate as a result of injuries	0.00	0.00	0.00
Total injury rate	15.59	16.10	10.57

INJURY LOST DAY RATE	2021	2020	2019
Rate based on recordable and high consequence injuries	0.21	0.11	0.51

Days of absence x 1,000/hours worked

	2021	2020
SUMMARY INDICATORS OF INJURIES	327	177

ESG PERFORMANCE – PUBLIC ADMINISTRATION AND COMMUNITY

ESG Performance - Public Administration and Community Charitable initiatives and donations

Other initiatives: Sabaf will offer a breast cancer screening to all Group's women employees

ESG Performance - Public Administration and Community Approach to tax

The Group believes that the contribution from taxes paid is a channel through which it can participate in the economic and social development of the countries in which it operates

TAX ACTIVITY MANAGEMENT

• Tax risks are analysed and managed in accordance with the company's Enterprise Risk Management model
• To date, the Group has not received any requests from its stakeholders regarding tax issues
• The Group does not engage in tax advocacy

From 2020 the Group reports on taxes in accordance to the GRI 207 indicator

ESG PERFORMANCE – CORPORATE GOVERNANCE

ESG Performance - Corporate Governance

Board of Directors and Top Management

% of women in Top Management 14%

ESG Performance - Corporate Governance Remuneration policy

ESG Performance - Corporate Governance Remuneration policy

ESG Performance - Corporate Governance Lobby polices

No monetary contributions to and spending for political campaigns, political organizations, lobbyists or lobbying organizations

Sabaf S.p.A. has been a member of Confindustria Brescia since 2014

Sabaf promotes energy efficiency and product safety

Sabaf S.p.A. is one of the founders of APPLiA Italia, the association that develops and coordinates in Italy the study activities promoted at European level by APPLiA – Home Appliance Europe with the related scientific, legal and institutional implications in the household appliances sector

DISCLAIMER

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

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

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

For further information, please contact Gianluca Beschi - +39.030.6843236 gianluca.beschi@sabaf.it