Sabaf — Investor Presentation 2022

Oct 5, 2022

FINANCIAL PRESENTATION

Sabaf - Roadshow Paris

6 th October 2022

Table of contents

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

COMPANY PROFILE

4

Sabaf Group: product range

Sabaf Group: evolution

Sabaf Group: Revenues and EBITDA last 3 years

vs. 2019

+ 42.4% vs. 2020 + 100.4% vs.

+ 68.9% + 45.9%

REVENUES EBITDA

vs. 2020

2019

Sabaf Group: leading producer of components for household appliances

▪ 2021: 10 production plants

Sabaf Group: industrial footprint

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

ARC S.R.L. Professional burners

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

CMI ITALY (2 PLANTS)

Oven hinges Dishwasher hinges

PGA Electronics for household appliances

NEW

SABAF MEXICO Burners and hinges SOP - Q1 2023

Why invest in Sabaf Strategy for value creation

International industrial footprint

Sabaf Group Main shareholders

Pietro Iotti, CEO of Sabaf, owns 1.5%

2022 STRATEGIC MOVES

Strategic moves (becoming in facts)

Sabaf Induction: business strategy

2

3

4

5

1

14

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

MARKET The European market of induction cooking components, estimated at around €500 million ▪ Steady growth for several years at a rate of over 10% ▪ Highly concentrated market with few players (Technological complexity) Investment plan ▪ About €5 million in R&D in the period 2021 – 2023 ▪ Setting up of a dedicated project team in Italy ▪ Sabaf has developed its own project know-how internally by filing proprietary patents, software and hardware ▪ Creation of innovative products which better meet manufacturers' needs and new consumer trends PROJECT R&D

• The Group benefits from the expertise gained from the acquisition of Okida the Turkish company of Sabaf Group already designated to electronics and where part of the induction cooking components will be produced
• 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

P.G.A. acquisition

• P.G.A. S.r.l. is based in Fabriano (AN)
• Owned by brothers Andrea and Paolo Cennimo, each of whom held 50% of the capital
• Operating for over 25 years in the field of design and assembly of electronic control boards for the household

• Holds 100% of the share capital of PGA2.0 s.r.l., a business unit dedicated to the design and prototyping of innovative solutions based on interconnection and the Internet of Things

• 2021 SALES: €11.5 million

• 2021 EBITDA: €2.2 million
• Net financial debt at 30 June 2022: €1.3 million

P.G.A. acquisition

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

The strategy

The acquisition

• The acquisition of P.G.A. reflects the aim of diversification and expansion of the offer defined in our Business Plan
• P.G.A. integrates perfectly with Okida, the Sabaf Group's company which is already active in the electronics sector and which is increasingly contributing to the Group's results
• The Electronics Division plays a decisive role in Sabaf's strategic development into a group with a full-fledged presence in advanced technologies in the household appliance industry → Electronics allows to reach diversified future expansions and higher profitability level
  • Through this acquisition the 2023 Electronic division turnover is expected to be around €35 - 40 million

Widening Industrial Footprint

• Production: valves and burners for local market and potential export
• Investments: € 5.2 mn in 3 years
• Area: 24,000 sqm (5,000 sqm covered)
• Expected capacity: € 6 mn
• Start of production: first half 2022

• Production: burners and hinges for North and Central America markets
• Investments: € 5 mn in 3 years
• Area: 23,300 sqm (12,950 sqm covered)
• Expected capacity: € 11 mn
• Start of production: first quarter 2023

FINANCIAL PERFORMANCE

Performance data Income statement – II quarter 2022 vs. II quarter 2021

€ x 000	Q II 2022		II 2	2021	% Δ 22 - 21	12	MONTHS 2021
Revenue	74 832 ,	100.0%	72 840 ,	100.0%	+2.7%	263 259 ,		100.0%
Other income	2 078 ,	2.8%	2 ,597	3.6%		8 ,	661	3.3%
Total operatig and income revenue	76 910 ,		75 437 ,			271 920 ,
Materials	(37 859) ,	(50.6%)	(39 199) ,	(53.8%)		(142 ,	355)	(54.1%)
Personnel costs	(13 684) ,	(18.3%)	(14 250) ,	(19.6%)		(53 ,	964)	(20.5%)
Change in inventories	1 405 ,	1.9%	8 810 ,	12.1%		29 ,	922	11.4%
Other operating costs	(12 910) ,	(17.3%)	(13 ,722)	(18.8%)		(51 ,	383)	(19.5%)
EBITDA	13 862 ,	18.5%	17 076 ,	23.4%	-18.8%	54 140 ,		20.6%
Depreciation	(4 995) ,	(6.7%)	(4 209) ,	(5.8%)		(16 ,	869)	(6.4%)
Gains/losses on fixed assets	9 3	0.1%	7 3	0.1%			237	0.1%
Write-downs/write-backs of non-current assets	-	0.0%	-	0.0%		-		0.0%
EBIT	8 960 ,	12.0%	12 940 ,	17.8%	-30.8%	37 508 ,		14.2%
financial Net	9 3
expense from Revenues		0.1%	(266)	(0.4%) 0.0%			(429)	(0.2%)
(expenses hyprinflation Exchange gains and losses rate	(4 606) , 473	(6.2%) 0.6%	- (1 004)	(1.4%)		(7	399)	(2.8%)
Profits and losses from equity investments	-	0.0%	, (3)	(0.0%)		, -		0.0%
EBT	4 920	6.6%	11 667	16.0%	-57.8%	29 680		11.3%
	,		,			,
Income taxes	634	0.8%	(3 122) ,	(4.3%)		(5 ,	003)	(1.9%)
PROFIT FOR THE YEAR	5 554 ,	7.4%	8 545 ,	11.7%	-35.0%	24,677		9.4%
Minority interests	-	0.0%	252	0.3%			780	0.3%
PROFIT TO GROUP ATTRIBUTABLE THE	5 554 ,	7.4%	8 293 ,	11.4%	-33.0%	23,897		9.1%

Performance data Income statement – 6 months 2022 vs. 6 months 2021

€ x 000	MONTHS 6	2022	MONTHS 6	2021	% Δ 22 - 21	MONTHS 12	2021
Revenue Other income Total operatig and income revenue	145 684 , 4 663 , 150 347 ,	100.0% 3.2%	137 665 , 4 485 , 142 150 ,	100.0% 3.3%	+5.8%	263 259 , 8 661 , 271 920 ,	100.0% 3.3%
Materials Personnel costs Change in inventories Other operating costs EBITDA	(77 195) , (27 146) , 7,348 (26 468) , 26 886 ,	(53.0%) (18.6%) 5.0% (18.2%) 18.5%	(76 146) , (28 136) , 20 345 , (26 029) , 32 184 ,	(55.3%) (20.4%) 14.8% (18.9%) 23.4%	-16.5%	(142 355) , (53 964) , 29 922 , (51 383) , 54 140 ,	(54.1%) (20.5%) 11.4% (19.5%) 20.6%
Depreciation Gains/losses on fixed assets Write-downs/write-backs of non-current assets EBIT	(9 063) , 222 - 18 045 ,	(6.2%) 0.2% 0.0% 12.4%	(8 341) , 117 - 23 960 ,	(6.1%) 0.1% 0.0% 17.4%	-24.7%	(16 869) , 237 - 37 508 ,	(6.4%) 0.1% 0.0% 14.2%
financial Net expense Revenues (expenses from hyprinflation Exchange gains and losses rate Profits and losses from equity investments EBT	331 (4 606) , 347 (48) 14 069 ,	0.2% (3.2%) 0.2% (0.0%) 9.7%	2 3 - (1 853) , (49) 22 081 ,	0.0% 0.0% (1.3%) (0.0%) 16.0%	-36.3%	(429) (7 399) , - 29 680 ,	(0.2%) (2.8%) 0.0% 11.3%
Income taxes PROFIT FOR THE YEAR Minority interests PROFIT ATTRIBUTABLE TO THE GROUP	(1 061) , 13 008 , - 13 008	(0.7%) 8.9% 0.0% 8.9%	(4 ,768) 17 313 , 564 16 749	(3.5%) 12.6% 0.4% 12.2%	-24.9% -22.3%	(5 003) , 24,677 780 23,897	(1.9%) 9.4% 0.3% 9.1%

Performance data Sales by market

x 000 €	MONTHS 6 2022	MONTHS 6 2021
Europe (excluding Turkey)	50 815 ,	48 904 ,	9% +3
Turkey	36 725 ,	33 630 ,	2% +9
North America	23 857 ,	15 578 ,	+53 1%
South America	18 053 ,	21 421 ,	7% -15
Africa and Middle East	10 178 ,	9 974 ,	0% +2
Asia and Oceania	6 055 ,	8 158 ,	8% -25
Total	145,684	137,665	+5.8%

x 000 €	II QUARTER 2022	II QUARTER 2021
Europe (excluding Turkey)	24,348	24,852	0% -2
Turkey	18,978	17,354	4% +9
North America	13,712	8,277	+65 .7%
South America	9,310	11,531	3% -19
Africa and Middle East	5,092	6,066	-16 1%
Asia and Oceania	3,391	4,760	8% -28
Total	74,832	72,840	+2.7%

Performance data Sales by product

x 000 €	MONTHS 6 2022	MONTHS 6 2021
Gas	91	97	9%
	363	041	-5
	,	,
Hinges	40	29	+39
	698	114	8%
	,	,
Electronics	13	11	4%
	623	510	+18
	,	,
Total	145 684 ,	137 665 ,	+5.8%

x 000 €	QUARTER II 2022	QUARTER II 2021
Gas	46 331 ,	52 452 ,	7% -11
Hinges	21 202 ,	14 ,795	3% +43
Electronics	7,299	5,593	5% +30
Total	74,832	72,840	+2.7%

Performance data Balance Sheet

E-MARKET SDIR
CERTIFIED

€ 000 x	30/06/2022	31/03/2022	31/12/2021	30/06/2021	31/03/2021
Fixed assets	154 593 ,	132 414 ,	130 093 ,	136 192 ,	132 244 ,
Inventories	72 962 ,	70 395 ,	64 153 ,	58 735 ,	50 081 ,
Trade receivables	90 189 ,	78 780 ,	68 040 ,	81 666 ,	73 020 ,
receivables Tax	4 452 ,	6 926 ,	6 165 ,	3 531 ,	2 980 ,
Other receivables current	5 556 ,	4 396 ,	3 136 ,	3 086 ,	2 865 ,
Trade payables	(55 867) ,	(58 765) ,	(54 837) ,	(56 494) ,	(51 883) ,
Tax payables	(1 678) ,	(6 559) ,	(4 951) ,	(6 629) ,	(4 487) ,
Other payables	(12 972) ,	(12 493) ,	(13 075) ,	(13 463) ,	(12 030) ,
Net working capital	102 642 ,	82 680 ,	68 631 ,	70 432 ,	60 546 ,
Provisions for risks and severance indemnity	(8 982) ,	(8 177) ,	(8 681) ,	(8 883) ,	(9 271) ,
Capital Employed	248 253 ,	206 917 ,	190 043 ,	197 741 ,	183 519 ,
Equity Net debt	153 460 , 94 793 ,	131 463 , 75 454 ,	122 436 , 67 607 ,	126 615 , 71 126 ,	123 886 , 59 633 ,
Sources of finance	248 253 ,	206 917 ,	190 043 ,	197 741 ,	183 519 ,

Performance data Cash flow statement

E-MARKET SDIR
CERTIFIED

€ x 000	MONTHS 6 2022	MONTHS 6 2021	MONTHS 12 2021
Cash the beginning of the period at	43 649 ,	13 318 ,	13 318 ,
Net profit	13 008 ,	17 313 ,	24 683 ,
Depreciation	9 063 ,	8 341 ,	16 869 ,
Other income adjustments statement	3 668 ,	4 310 ,	5 810 ,
Change in working capital net
- Change in inventories	(6 037) ,	(19 511) ,	(24 929) ,
- Change in receivables	(22 151) ,	(18 230) ,	(4 604) ,
- Change in payables	1 047 ,	14 721 ,	13 064 ,
	(27 141) ,	(23 020) ,	(16 469) ,
Other changes in operating items	(6 807) ,	(115)	(7 677) ,
Operating cash flow	(8 209) ,	6 829 ,	23 216 ,
of disposals Investments , net	(11 018) ,	(15 162) ,	(23 752) ,
Free Cash Flow	(19 227) ,	(8 333) ,	(536)
Cash flow from financial activity	(4 314) ,	13 545 ,	47 405 ,
Own shares buyback	(1 189) ,	-	-
Dividends	(6 690) ,	(6 172) ,	(6 172) ,
CMI and ARC acquisitions	-	-	(6 393) ,
Deconsolidation / consolidation ARC Handan	(97)	-	97
Forex	211	562	(4 070) ,
financial flow Net	(31 306) ,	(398)	30 331 ,
Cash the end of the period at	12 343 ,	12 920 ,	43 649 ,

Performance data Financial indicators

	MONTHS 6 2022	MONTHS 6 2021	MONTHS 12 2021
Change in turnover (vs . previous year)	8% +5 6m 2021 vs.	+76 1% 6m 2020 vs.	+42 4% 12m 20 vs.
ROCE (return capital employed) on	5% 14	2% 24	7% 19
Net debt/EBITDA	1 76	1 10	1 25
Net working capital/Turnover	2% 35	6% 25	1% 26
Net debt/equity	8% 61	2% 56	2% 55
Days of Sales Outstanding	111	107	101
of Payables Outstanding Days	96	99	96
of Outstanding Days Inventory	106	96	99

SUSTAINABILITY

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

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

Sabaf: a sustainable business KPI measurement

	KPI	Unit of measurement	2023 Target vs. 2020	2020 ACTUAL	2021 TARGET	2021 ACTUAL	2022 TARGET	2023 TARGET
1	CO 2 emissions/Revenue	tCO / million of 2eq Euro	-14%	132	128	111	120	114
2	Hours of training per capita	h	+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

ESG Performance - Corporate Governance

Remuneration policy

ESG Performance - Environment

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

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 Hydrogen: project Hy4Heat

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

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

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

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

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

DISCLAIMER

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

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

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

For further information, please contact

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