SBE-Varvit — Earnings Release 2024

Mar 28, 2025

PRESS RELEASE

THE BOARD OF DIRECTORS APPROVED THE CONSOLIDATED RESULTS FOR 2024

ACTIVATION OF BY-LAWS CLAUSES

PROPOSED DIVIDEND OF €0.206 PER SHARE

CALLING OF THE GENERAL SHAREHOLDERS' MEETING TO BE HELD ON 30 APRIL 2025

Chairman Vescovini: "We are ready to capitalise on the demand recovery expected for the second half of 2025, with strategic projects aimed at boosting the Group's growth."

2024 Highlights:

• Revenues: €335.5 million, -15.3% compared to €395.8 million in 2023;
• Adjusted¹ EBITDA: €82.3 million² , -21.7% compared to €105.1³ million in 2023;
• Reported EBITDA: €82.3 million, -15.2% compared to €97.0 million in 2023;
• Adjusted EBITDA margin at 24.6% (26.6% in 2023);
• Reported EBITDA margin at 24.6% (24.5% in 2023);
• Net profit: €35.0 million, -39.4% compared to €57.8 million in 2023;
• Net Financial Position: positive (net cash) at €69.7 million, +54.9% compared to €45.0 million at 30 June 2024;
• Investments at €40.3 million compared to €53.2 million in 2023;
• Proposed dividend: €17.6 million (€0.206 per share).

Reggio Emilia, 28 March 2025 – The Board of Directors of SBE-V.AR.VIT. S.p.A. [Ticker: VARV] approved the consolidated operating and financial results at 31 December 2024.

The Chairman of the Board of Directors, Alessandro Vescovini, stated:

"2024 was a complex year for our industry, marked by a challenging market context that influenced demand, and therefore our results. Despite these difficulties, SBE-Varvit proved its solidity and capability to adapt, ensuring stable margins and thus confirming the effectiveness of our business model.

In a context requiring agility, strategic vision and flexibility, we are ready to tackle challenges with determination, turning hurdles into opportunities and forging ahead consistently with our growth path. Building on our solid business and our excellent industrial expertise, we look to the future with confidence.

Today, our priority is still to strengthen our production capacity through investments aimed at optimising production plants and adopting advanced technological solutions.

We have ambitious projects in the pipeline for 2025, with the objective of expanding our market footprint, diversifying our products and services and seizing new growth opportunities, thus consolidating our competitiveness at global level. In this way, we will be able to improve our efficiency and quality so as to be best prepared for leveraging the demand recovery we expect in the second half of 2025."

¹ "Adjusted" means gross of non-recurring charges/income.

² In 2024, no adjustments were deemed necessary to normalise non-recurring charges/income.

³ The adjustment, which totalled approximately €8.1 million, includes the costs of the IPO process (€3.1 million) and other non-recurring costs incurred in connection with the delayed start-up of the Acerra facility (€5 million), which became operational in January 2024.

P&L results at 31 December 2024

Revenues

Revenues for the year ended 31 December 2024 amounted to €335.5 million, down 15.3% compared to the previous year. This performance was mostly attributable to the volume contraction and, to a lesser degree, to the price effect due to the renegotiation of contracts with customers to reflect the commodity and energy cost reduction.

Reported/Adjusted EBITDA

In 2024, no adjustments were required due to non-recurring charges or income.

Reported EBITDA amounted to €82.3 million in 2024, with a 21.7% decrease compared to Adjusted EBITDA and a 15.2% decline compared to Reported EBITDA for 2023.

Reported EBITDA margin was 24.6% in 2024, down compared to Adjusted EBITDA margin of 26.6% and unchanged compared to Reported EBITDA margin of 24.5% for 2023.

Despite a decline in sales, the margin proved once again resilient thanks to the operating efficiency and technological level achieved by the SBE Varvit Group in recent years, as well as to a particularly streamlined cost structure.

Net financial result

Net financial result, net of foreign exchange gains and losses, was positive for €0.9 million in 2024 compared to €-2.2 million for the previous year. Financial charges included €0.3 million foreign exchange losses and €1.3 million interest expense on loans.

Income taxes

Income taxes amounted to €10.7 million in 2024 compared to a positive tax burden of €2.7 million for the previous year. In 2023, the positive tax burden had been attributable to the application of the Patent Box rules, which although including benefits relating to previous years, had manifested all of its effects in 2023.

Net result

Net profit amounted to €35.0 million in 2024 compared to €57.8 million for the previous year. The decline was due to operating performance, but also to the tax burden, which only in 2023 had benefited from the positive impact of the Patent Box rules. Despite this contraction, the result remained positive and testified to the Company's ability to generate profit, even during market downtrends.

Consolidated capital and financial highlights at 31 December 2024

Investments and acquisitions

Cash outflows for investments in property, plant, equipment and intangible assets amounted to €40.3 million in 2024 compared to €53.2 million in the previous year. Investments focused on activities aimed at stepping up industrial efficiency and improving the existing plants in technological terms, in addition to strengthening the Group's production capacity.

Change in net working capital

Net working capital rose slightly to €151.8 million compared to €149.1 million in 2023. This result was mainly driven by higher inventories, which went from €140 million to €149.4 million as a consequence of the market downtrend and in view of the opportunity to be ready for the future market recovery.

Net Financial Position

The Group's net financial position was positive at €69.7 million at the end of 2024 compared to €45.0 million at 30 June 2024 and €54.8 million at the end of 2023. This result is even more significant when considering that in 2024, for the first time, the Company distributed €21 million to Shareholders.

Calling of the Ordinary Shareholders' Meeting

The draft Financial Statements at 31 December 2024 will be submitted to the Shareholders' Meeting of the Company to be held, as already announced, on 30 April 2025, in single call.

Proposed allocation of the result for the year

The Board of Directors, in accordance with the Cornerstone Agreement, resolved to propose to the Shareholders' Meeting of SBE-Varvit S.p.A. the payment of 50% of the consolidated dividends amounting to €17,551,200, equal to €0.206 for all share classes.

The proposal envisages 19 May 2025 as ex-date, 20 May 2025 as record date and 21 May 2025 as payment date.

The remaining part of net profit for the year will be allocated to the Extraordinary reserve.

Activation of By-laws clauses

Based on the agreements made with the Cornerstone Investor (Cornerstone Agreement), to be extended to all shareholders, on 23 October 2023 the Board of Directors incorporated their content in the By-laws, approving a dividend policy under which the Company, as of the approval of the financial statements for the year ended 31 December 2023, shall pay dividends as follows:

• (i) "an amount equal to 35% of the consolidated net profit for the year ending 31 December 2023 and until achievement of the EBITDA Target and the Trans-listing Target (Post-listing Targets as defined in the By-laws), in compliance with the procedure referred to in Article 8-bis.3 of the Bylaws; or
• (ii) in the event that one of the two above-mentioned targets is not achieved, an amount equal to 50% of the consolidated net profit as of the year in which the target in question is not achieved (in compliance with the procedure referred to in Article 8-bis.3 of the By-laws) and until the end of the 5 th year following the Trading Start Date (8 November 2023, as defined in the Cornerstone Agreement).

Moreover, pursuant to Article 8-bis.2, in case of failure to achieve even just one of the Post-listing Targets, 31,800,000 A Shares will be automatically cancelled, in compliance with the provisions of paragraphs 8-bis.3 and 8-bis.4, in proportion to the A Shares held by each holder of A Shares, with no impact on the amount of the share capital."

On today's date, the Board of Directors acknowledged the failure to achieve the Post-listing Targets; therefore:

• a. 31,800,000 A shares will be immediately cancelled, with no share capital reduction;
• b. the Company's share capital will now consist of 85,200,000 shares with no nominal value, of which:
  • i. 3,000,000 Ordinary Shares admitted to trading on Euronext Growth Milan; and
  • ii. 82,200,000 A Shares with multiple votes;
• c. 50% of consolidated net profit will be distributed with effect as of the financial year ended 31 December 2024 and until the end of the 5th year following the Trading Start Date, and therefore until the financial year ending 31 December 2027.

Significant events after 31 December 2024

Acquisition of Cagnasso S.r.l.

In March 2024, VGV, a company of the SBE-Varvit Group, finalised the acquisition of the business unit of Cagnasso — an historical company founded in 1964, headquartered in Settimo Torinese and operating in the mechanical sector.

Cagnasso develops and distributes screws and fasteners, with a specific focus on products intended for agricultural machinery — a business area which perfectly complements the activities of VGV, a leader in the supply of components for the automotive and industrial sectors. The acquisition is aimed at integrating Cagnasso's assets and artisanal know-how into VGV's resources, innovation and strategic vision.

The incorporation of the company into the Group will also enable the introduction of new, innovative products and services, thus expanding the Group's range and further strengthening its competitiveness.

Cagnasso closed 2023 with sales of over €3 million and margins at nearly 30%.

Outlook

Despite the difficult market context of 2024, the Group proved solid and able to adapt, ensuring stable margins and thus confirming the effectiveness of its business model and the flexibility of its cost structure.

In a market requiring agility, strategic vision and responsiveness, the Group is ready to tackle challenges with determination, tuning hurdles into opportunities and forging ahead consistently with its growth path, thanks to its business solidity and excellent industrial expertise.

The strategic priority is still to strengthen production capacity through investments aimed at optimising plants and at adopting advanced technological solutions. Ambitious projects are planned for 2025, aimed at expanding the market footprint, diversifying the products and services offered and identifying new growth opportunities, with a view to consolidating competitiveness at global level. This process will make it possible to improve efficiency and quality, in view of the demand recovery expected as of the second half of 2025. In light of the significant uncertainties that are still present to date, in 2025 revenues are expected to be substantially unchanged compared to 2024, with operating margins forecast in a range of 24%-26%.

This press release contains forward-looking statements. These statements are based on the SBE-V.AR.VIT Group's current expectations and projections regarding future events and are, by their very nature, subject to a number of risks and uncertainties. These statements refer to events and depend on circumstances that may or may not occur or take place in the future, and, as such, undue reliance should not be made on them. Actual performance could differ significantly from the contents of such statements due to a variety of factors, including constant volatility and a further deterioration of capital and financial markets, changes in macroeconomic conditions and economic growth and other changes in business conditions, changes in the law and institutional context (in Italy and internationally), and many other factors, most of which are beyond the Group's control.

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SBE-Varvit is active in the production, distribution and commercialisation of a wide and diversified range of fastening components including screws, bolts, nuts, cold and hot formed products, fasteners and highly engineered mechanical components. The Company is characterised by its integrated and vertical offer, through which it can constantly monitor each stage of the production process and disintermediate the market. The Issuer's business model is indeed centred on the disintermediation of every stage of the production and distribution process, with the main objective of shortening the distance between producer and end customer as much as possible, reducing the distributors' role to a minimum. The Issuer's products are intended to be marketed in various markets including agricultural machinery, construction machinery, industrial machinery, commercial vehicles, personal mobility, wind power and infrastructure, totalling more than 5,000 customers. SBE-Varvit operates through seven production units located in Italy (in Monfalcone, Grugliasco, Tolmezzo, San Giuliano Milanese, Montirone and Acerra) and one located in Serbia (in Sabac) and through five highly automated warehouses in Italy, Serbia and the United States.

For further information: www.sbe.it

CONTACTS

Investor Relator Alessandro Caronti – investor@varvit.com +39 0522 5088

Euronext Growth Advisor Equita SIM S.p.A. sbe-varvit@equita.eu

IR & Media Barabino&Partners Office: +39 02/72.02.35.35 Ferdinando De Bellis – f.debellis@barabino.it +39 339 18 72 266 Agota Dozsa – a.dozsa@barabino.it +39 338 74 24 061 Virginia Bertè – v.berte@barabino.it +39 342 97 87 585

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

(Values in €'000)	2024	2023
Revenues	335.448	395.821
Other income	6.842	6.716
Total Revenues	342.290	402.537
Raw materials and consumables		(145.842) (171.863)
Changes in finished goods and semi-finished products	13.982	4.269
Services	(72.712)	(83.339)
Employee benefits	(53.170)	(52.451)
Other costs	(2.156)	(2.056)
Impairment losses on trade receivables	(59)	(147)
EBITDA	82.333	96.950
Amortisation and depreciation	(37.473)	(34.176)
EBIT	44.860	62.774
Financial Income exlcuding FX gains	2.147	972
Financial expense excluding FX losses	(1.283)	(3.171)
EBT	45.724	60.575
Income taxes	(10.689)	(2.737)
Profit for the year (Loss)	35.035	57.838
Attributable to:
To non-controlling interests	2.368	2.572
The owners of the parent	32.667	55.266

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(Values in €'000)	2024	2023
Assets	535.990	558.882
Non-current assets	218.358	222.096
Property, plant and equipment	190.326	192.122
Intangible assets	1.429	964
Goodwill	12.110	12.110
Right-of-use assets	10.373	11.892
Non-current financial assets	266	266
Other non-current assets	1.452	2.292
Equity investments	15	-
Deferred tax assets	2.387	2.450
Current assets	317.632	336.786
Trade receivables	67.046	83.943
Inventories	149.377	139.954
Other current assets	13.233	23.679
Current tax assets	485	1.657
Current financial assets	28.916	17.957
Cash and cash equivalents	58.575	69.596
Equity and liabilities	535.990	558.882
Equity	418.010	403.342
Share capital	3.096	3.096
Legal reserve	622	622
Other reserves	369.813	334.974
Profit (Loss) for the year	32.667	55.266
Total equity	406.198	393.958
Equity attributable to non-controlling interests	11.812	9.384
Total non-current liabilities	33.056	40.152
Non-current financial liabilities	5.028	9.655
Non-current lease liabilities	6.161	7.919
Employee benefits	5.215	4.878
Provisions	2.041	2.055
Deferred tax liabilities	6.776	6.363
Other non-current liabilities	7.835	9.282
Current liabilities	84.924	115.388
Current financial liabilities	4.316	12.939
Current lease liabilities	2.312	2.283
Employee benefits	9.398	9.290
Trade payables	60.315	80.427
Other current liabilities	8.583	10.449

CONSOLIDATED STATEMENT OF CASH FLOWS

2024 2023 (Values in €'000) Profit for the year 35.035 57.838 Adjustments for: – Depreciation of property, plant and equipment 34.497 30.558 – Amortisation of intangible assets 591 563 – Depreciation of right-of-use assets 2.385 3.055 – Accruals for provisions and employee benefits 2.547 2.623 – Remeasurement of financial liabilities for contractual obligations - - – Net financial expense (864) 2.199 – Gain on sale of property, plant and equipment (14) (142) – Income taxes 10.689 2.737 Cash flows from operating activities 84.866 99.431 Changes in: – Inventories (9.423) 749 – Trade receivables 16.897 9.722 – Other current assets and liabilities 2.883 (172) – Trade payables (15.658) (21.134) – Utilisation of provisions and employee benefits (1.864) (2.014) Cash generated from operating activities 77.701 86.582 Interest paid (1.197) (1.462) Income taxes paid (644) (2.809) Net cash flows generated by operating activities (A) 75.860 82.311 Cash flows from investing activities Interest received 1.489 877 Proceeds from sale of property, plant and equipment 926 245 Proceeds from sale of financial assets 14.893 7.851 Acquisition of property, plant and equipment (39.261) (52.682) Acquisition of intangible assets (1.056) (529) Acquisition of other financial assets (25.187) (10.092) Net cash flows used in investing activities (B) (48.196) (54.330) Cash flows from financing activities Acquisition of subsidiary, net of cash acquired (1.822) (2.311) Proceeds from financial liabilities 7.236 6.640 Repayments of financial liabilities (20.486) (7.648) Payment of lease liabilities (2.553) (4.213) Dividends paid (21.060) Net cash flows used in financing activities (C) (38.685) (7.532) Net decrease (increase) in cash and cash equivalents (A)+(B)+(C) (11.021) 20.449 Opening cash and cash equivalents as of 1st January 69.596 49.147 Closing cash and cash equivalents as of 31st December 58.575 69.596

(Values in €'000)	2024	2023
Intangible assets	1.429	964
Property, plant and equipment	190.326	192.122
Goodwill	12.110	12.110
Right-of-use assets	10.373	11.892
Non-current financial assets	266	266
Deferred tax assets	2.387	2.450
Other non-current assets	1.452	2.292
Equity investments	15
Provisions	(2.041)	(2.055)
Employee benefits	(5.215)	(4.878)
Other non-current liabilities	(7.835)	(9.282)
Non-current tax liabilities	(6.776)	(6.363)
Net fixed assets	196.491	199.518
Trade receivables	67.046	83.943
Inventories	149.377	139.954
Current tax assets	485	1.657
Other current assets	13.233	23.679
Trade payables	(60.315)	(80.427)
Employee benefits	(9.398)	(9.290)
Other current liabilities	(8.583)	(10.449)
Net working capital	151.845	149.067
Uses of funds	348.336	348.585
Equity	418.010	403.342
Net financial position (cash positive)	(69.674)	(54.757)
Sources of funds	348.336	348.585

RECLASSIFIED CONSOLIDATED STATEMENT OF FINANCIAL POSITION