Cembre S p A : 2022 Annual Financial Report

www.cembre.com

202 2 ANNUALFINANCIALREPORT

Cembre S.p.A.

Head Office: Via Serenissima 9, Brescia, Italy Share Capital: EUR 8,840,000 (fully paid-up).

Registration no: 00541390175 (Commercial Register of Brescia)

This document contains translations of the draft statutory annual financial statements and consolidated annual financial statements prepared in the Italian language for the purpose of the law.

This document is not compliant with the provisions of the

Commission Delegated Regulation (EU) 2019/815.

Contents
CONTENTS
REPORT ON OPERATIONS FOR THE 2021 FINANCIAL YEAR
Report on Operations for the 2022 Financial Year	1
Attachment 1: Comparative Consolidated Income Statement	21
Attachment 2: Corporate Boards	22
CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2022
Consolidated Financial Statements at December 31, 2022
Consolidated Statement of Financial Position	24
Consolidated Statement of Comprehensive Income	25
Consolidated Statement of Cash Flows	26
Statement of Changes in the Consolidated Shareholders' Equity	27
Notes to the Consolidated Financial Statements	28
Certification pursuant to article 154-bis of Legislative Decree 58/98	71
CEMBRE S.P.A.'S DRAFT FINANCIAL STATEMENTS AT DECEMBER 31, 2022
Cembre S.p.A.'s Draft Financial Statements at December 31, 2022
Statement of Financial Position	72
Statement of Comprehensive Income	73
Statement of Cash Flows	74
Statement of Changes in the Shareholders' Equity	75
Notes to the Financial Statements	76
Attachment 1: Comparative Income Statement	114
Attachment 2: Compensation for auditing services and other services	115
Certification pursuant to article 154-bis of Legislative Decree 58/98	116
2022 Annual Financial Report

Report on Operations for the 2022 Financial Year

Operating Review

FY 2022 closed with satisfactory results for the Cembre Group. Markets were able to limit the negative effects of high inflation, the war in Ukraine and the resurgence of contagion in China, allowing the global economy to grow more strongly than the International

Monetary Fund predicted in October. The Cembre Group reported a 19.2 percent revenue growth in 2022 compared to 2021, with a turnover of €198.8 million.

The performance of consolidated sales by geographical areas shows 19.9% growth in the

Italian market, with sales of €84.4 million. Sales in the rest of Europe grew by 18.3% on the previous year to €93.2 million while sales in the rest of the World were 20.1% higher, reaching €21.2 million. In 2022, sales revenues to the Italian market represented 42.4% of the total (42.2% in 2021), sales to the rest of Europe 46.9% (47.2% in 2021) and sales in the rest of the world represented 10.7% of total sales (10.6% in 2021).

Sales by geographical area:

(euro '000)	2022	2021	Change	2020	2019	2018	2017
Italy	84,385	70,406	19.9%	55,955	58,469	59,023	55,576
Rest of Europe	93,214	78,772	18.3%	64,050	68,757	62,649	54,319
Rest of the World	21,197	17,657	20.0%	17,132	19,070	22,424	22,742
Total	198,796	166,835	19.2%	137,137	146,296	144,096	132,637

Revenues by Group company (net of intragroup sales):

(euro '000)	2022	2021	Change	2020	2019	2018	2017
Parent Company	109,318	91,708	19.2%	73,578	76,917	77,955	74,966
Cembre Ltd. (UK)	25,293	22,633	11.8%	16,688	19,274	18,336	17,468
Cembre S.a.r.l. (F)	12,124	11,258	7.7%	9,557	10,654	10,089	9,502
Cembre España S.L.U. (E)	16,988	12,471	36.2%	11,107	11,765	10,853	9,549
Cembre GmbH (D)*	21,935	18,875	16.2%	15,587	15,149	12,987	8,217
Cembre Inc. (USA)	13,138	9,890	32.8%	10,620	12,537	13,876	12,935
Total	198,796	166,835	19.2%	137,137	146,296	144,096	132,637

*In May 2018, Cembre GmbH had acquired the German company IKUMA KG; in July 2020, said company was merged by incorporation in Cembre GmbH. For said reason, the tables show the 2019 and 2018 data in consolidated form, considering the data of the Germancompanies involved in the merger jointly. It should be noted that the data up to and including 2017 concern solely Cembre GmbH.

In 2022, the turnovers of all Group companies were higher than in 2021.

Overall, sales of the foreign subsidiaries increased by 16.8% from €75.1 million in FY 2021, or 45.0% of consolidated revenue, to €89.5 million in FY 2022, also accounting for 45.0% of total consolidated revenue.

Revenues from sales of the various companies prior to consolidation are outlined below:

Revenues from sales prior to consolidation
(euro '000)	2022	2021	Change	2020	2019	2018	2017
Cembre S.p.A.	149,516	125,696	19.0%	101,410	108,809	109,068	103,476
Cembre Ltd. (UK)	25,574	24,318	5.2%	18,207	21,254	20,937	18,916
Cembre S.a.r.l. (F)	12,403	11,532	7.6%	9,748	10,799	10,107	9,509
Cembre España S.L.U. (E)	17,001	12,518	35.8%	11,111	11,779	10,860	9,554
Cembre GmbH (D)	22,063	19,002	16.1%	15,662	15,237	13,187	8,328
Cembre Inc. (USA)	13,193	9,917	33.0%	10,663	12,572	13,898	12,962

In 2022, Group companies reported the following results:

Net result prior to consolidation
(euro '000)	2022	2021	Change	2020	2019	2018	2017
Cembre S.p.A.	29,117	23,420	24.3%	16,455	22,600	21,257	24,444
Cembre Ltd. (UK)	2,449	2,113	15.9%	1,408	2,062	1,926	3,743
Cembre S.a.r.l. (F)	647	(327)	297.9%	221	338	545	169
Cembre España S.L.U. (E)	1,530	682	124.3%	491	443	585	740
Cembre GmbH (D)	1,360	1,096	24.1%	515	367	758	508
Cembre Inc. (USA)	491	705	-30.4%	385	666	1,063	863

For a more direct evaluation of the effect of foreign exchange translations, we include below sales figures of Group companies operating outside the euro area in the respective currency.

Curren	Revenues from sales prior to consolidation
(euro '000)	cy	2022	2021	Change	2020	2019	2018	2017
Cembre Ltd. (UK)	Gbp	23,514	20,904	12.5%	16,198	18,656	18,523	16,583
Cembre Inc. (USA)	US$	13,893	11,730	18.4%	12,179	14,075	16,412	14,643