Danieli & C Officine Meccaniche S p A : Press release dated 27.9.2021

DANIELI & C. OFFICINE MECCANICHE S.p.A.

Buttrio (UD) - via Nazionale n. 41

Fully paid-up share capital of euro 81,304,566

Registration Number with the Register of Companies of Udine, tax number and

VAT registration number: 00167460302

www.danieli.com

PRESS RELEASE

DANIELI GROUP

Danieli's Board of Directors met today, September 27, 2021, to examine and approve the yearly financial statements for the parent company and the consolidated financial statements for the Danieli Group, for the year from July 1, 2020, to June 30, 2021.

CONSOLIDATED ANNUAL REPORT FOR 2020/2021

1. To be added to the revenues of 2020/2021 amounting to 2,725.5 million euro, are internally manufactured items amounting to 60.8 million euro (2019/2020: 2,673.4 million euro, showing an increase of 129.7 million euro in the period).

(**) In application of IFRS 5.

Summary of results for the year 2020/2021

The 2020/2021 year ended with a net profit of 80.2 million euro, with an operating income (EBIT) of 143.9 million euro that is 57% higher than last year with both the Plant Making and Steel Making segments showing an increase in terms of margins and profit. The economic recovery driven by the containment of the pandemic effects of COVID-19 had a positive impact on the demand for plants which, according to estimates, will continue for the next two or three years.

Shareholders' equity shows an increase to 2,016.3 million euro, and the cash position, which remains strong and solid at 1,002.0 million euro, has allowed the company to deal with the delays and market imbalances caused by the pandemic.

The COVID-19 impact on our results remained limited despite the problems connected with the fluctuation in raw materials, energy costs and the steep rise in transport costs with fewer means of transport and containers available, which will also last in the year 2021/2022.

In fact, Danieli's worldwide organization, which not only includes plants but also autonomous companies with engineers, technical supervisors and sales engineers, allowed us to continue our business in the US, Russia and China, in spite of the travel restrictions from Europe. The good recovery of the Plant Making segment, which exceeded the budget forecast and maintains the world leadership in the supply of both "direct rolling" and "non direct rolling" plants for long products aiming at definitively assuming the leadership position also

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in the flat products sector thanks to innovative and patented technologies, in particular related to Danieli continuous casters, also contributed to containing the negative effects of COVID-19. In fact, the Plant Making segment showed a 23% increase in EBITDA and a 30% increase in EBIT with a sizeable, stable order book to ensure visibility for approximately two years.

The Steel Making segment (with ABS), however, continues to be among the leaders in Europe for the production of high-quality long products thanks to investments in new plants which were successfully completed without interruptions due to COVID-19 lockdowns.

These are the first investments on ABS' "Vision 2.000" program, which is aiming for a 50% increase in sales, and to continue being the only steelmaking plant to produce quality steels in rolling stock diameters ranging from 5.5 to 500 mm on a single site, with all the savings in Op-Ex and logistics that this involves.

Group revenues remained stable from last year, with lower sales in the Plant Making segment and increasing sales in the Steel Making segment, which recorded higher production volumes than in 2019/2020, despite the partial stoppage of the plants at ABS Sisak due to the earthquake in Croatia and the costs of closure of the ESW pipe mill in Germany: we wish to emphasize that without the pipe mill losses, ABS would have ended the year with a good profit, indicating that the company is competitive.

In addition to that, the new QWR wire rod mill at ABS SpA in Pozzuolo del Friuli started production at the end of 2020, thus increasing the company's rolling capacity towards a high quality premium product especially for the European market and completing the learning curve in the first months of 2021 in a steel market with better demand.

For the year ended June 30, 2021, the Group's EBITDA of 250.2 million euro showed an increase of 33% compared to last year, with again interesting margins considering the sales for the period, ensuring full coverage of the huge expenses incurred in research and development for the year.

Plant Making revenues are in line with the forecasts made at the beginning of the year and are the result of regularly progressing construction schedules contractually agreed with customers, with an EBITDA of 153.2 million euro, up from 2019/2020.

Steel Making revenues, on the other hand, are higher than the budget figures given at the beginning of the year and show a good profit of 97.0 million euro, which could improve in the next fiscal year thanks to the new, fully operating rolling plants.

Steel Making products sold in the period (ABS Group) reached about 1,150,000 tons (registering an increase over the same period last year), with the goal of increasing these volumes in 2021/2022 and bringing ABS Sisak in Croatia back to full production capacity.

Consolidated net profit increased by 28% but we feel it can improve in the next tax year with a positive contribution by both the Plant Making and Steel Making segments. The Board of Directors has acknowledged the results for the 2020/2021 fiscal year, pointing out that the performance of both the Plant Making and Steel Making segments - and the fact that the order book is being kept at a good level - lead us to forecast better results for next year without any significant penalties for extraordinary charges.

Note that, as usual, of the net global value added (corporate social responsibility) of 567.4 million euro, the portion set aside for venture capital remuneration (shareholders including company employees) is limited to

10.3 million euro, and the company portion is 69.9 million euro while the personnel portion is 441.4 million euro, the public administration 40.4 million euro and donations amounting to 1.3 million euro.

Worldwide prospects for the metals production sector that affect Danieli's Plant Making business

In the first half of 2021, world steel production was approximately 1,004 million tons, up 14.4% over the same period in 2020, which had reached a total of approximately 1,864 million tons over the 12-month period (calendar year).

Forecasts for 2021 point to a total increase of about 10%, with China reporting limited growth in production, while the rest of the Asian countries together with advanced and emerging countries will show a significant increase of about 15%.

The average utilization factor of plants, compared to the maximum theoretical figure, was just under 80% at the end of 2020, and is expected to increase to 85% in 2021.

The steel market will be strong in the second half of 2021 and is expected to further improve in 2022, following a general post-COVID recovery of the world economy.

Steelmakers are increasingly committed to running their plants in a sustainable manner by reducing energy consumption per ton and using the new available technologies (Green Steel) to decarbonize production and

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limit greenhouse gas (GHG) emissions, making production socially sustainable for the community and the environment.

The challenge undertaken by steelmakers is to reduce CO2 emissions by 50% within the next 10 years with technological solutions to produce liquid steel that use renewable forms of energy and reduce coal use to a minimum in the production process, replacing it with gas and using plants that are more and more flexible, efficient and have a high degree of vertical integration with continuous production solutions. The program provides for progress towards zero emissions expected by 2050 thanks to the use of hydrogen and other developing new technologies.

The quality of products with a high degree of finish, together with punctual customer service, still continue to be the most important factors to obtain more profitable prices from the market and greater supply continuity to customers, who tend to reduce their minimum inventories, and increasingly request "on-time" delivery of personalized items.

However, the market is expected to positively consolidate in the second half of 2021 and then improve in 2022 and 2023, stimulated by strong private investment and public infrastructure projects envisaged in the post-pandemic recovery plans promoted by the governments of countries with both emerging and developed economies.

The decarbonization of steel production now plays a central role for all investments in the field, where large availability of electricity from renewable sources and the use first of gas and then of hydrogen (when available at competitive conditions) are required to allow a significant reduction of emissions in the industrial process. The antidumping policies that have now been implemented by all the major steelmaking countries and the envisaged customs barriers (CBAM) towards steels produced with high CO2 emissions have sparked domestic demand for new plants that therefore also have to ensure low emissions for sustainable production in line with the tendency to reduce greenhouse gas that today is required of each sector of industry and that will lead to many investments in innovative plants as soon as 2021 and in the years to follow. These investments will also be backed by state support promoted by major governments to limit the rise of average global temperature.

In order to remain competitive in this market, Danieli has invested a lot in innovative technologies that allow green steel production, first and foremost confirming customer centricity and working to:

• Increase plant productivity and, consequently, per capita added value;
• Reduce the level of GHG emissions per ton produced by applying innovative and now well-established technological solutions with low environmental impact;
• Implement the principles of the 4.0 revolution in the steelmaking industry through the DIGIMET project, to ensure total control of production variables in all production stages, from liquid steel to the final, finished and packaged product; and
• Speed up the production processes by reducing time and costs and optimizing production efficiency by combining various thermomechanical work phases with "endless" solutions both for long and flat products.

The research and technological development implemented by Danieli in the last decade have enabled us to expand the range of plants supplied to the entire metals sector (steel, aluminum and other metals), significantly lowering the cost of the initial investment of each project (CapEx), but also optimizing operating expenses (OpEx), combining several work stages in the production process, thereby increasing the number of potential investors thanks to more economically feasible investments in countries with mature economies as well as in developing countries.

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Summary of Results by Business Segment

Gross operating margin (EBITDA) is a measurement used by the Issuer to monitor and evaluate the performance of operations, and represents the operating profit before depreciation and amortization of fixed assets and net write-downs of receivables (this measure is not specified in the IFRS standards and therefore may not be fully comparable with other entities that use other calculation criteria).

(*) Plant Making revenues include 60.8 million euro for the Quality Wire Rod Mill sold to ABS SpA (2019/2020: 129.7 million euro)

In the next 2 to 3 years, the trend in steel consumption will be positively influenced also by the investments envisaged in many countries in the respective "recovery plans" which require, among other things, a more sustainable production with fewer emissions.

The Plant Making segment will benefit in the next two or three years from the strong profits that our customers are accumulating and that they will invest both to improve competitiveness and to reduce CO2 emissions in line with the principles of the European program "Fit for 55" (Green Steel).

Strategies

Below are some of Danieli's mottos:

• "Innovaction to be a step ahead in Capex and Opex" which aims to make the most of the Group's new organizational model, promoting multicultural intellectual growth and creating solutions to meet current market requirements more effectively.
• "Passion to innovate and perform" but also "We do not shop around for noble equipment". The Danieli Group will therefore continue to consolidate and expand its business in order to be more competitive in terms of innovation, technology, quality, costs, productivity and customer service.
• "Absolute Steel Quality" which summarizes ABS' constant commitment to produce steels with a degree of finish and a customer service that are always in line with the most demanding expectations and for the most innovative and rigorous industrial applications.

In the period, the Plant Making segment continued to make rational use of its international structures, focusing in particular on competitiveness in terms of innovation, technology, quality, efficiency and customer service.

Innovation and noble products are developed and manufactured primarily in Europe, whereas plants with consolidated technologies are designed and manufactured in our Asian plants, which guarantee the same

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European quality at a lower cost for both the western steelmaking market and the Asian one, where almost 70% of the world's steel is produced.

The types of orders in the Plant Making order book and production planning in the Group's manufacturing units allowed an orderly saturation of design offices and manufacturing shops both in Italy and the Far East without, for the time being, any significant delays in the supply chain due to production stoppages connected with COVID-19.

ABS is known worldwide as one of the most modern steelmaking plants in the world for the quality of its facilities that not only guarantee certified products but also the highest production efficiency and full protection of the ecosystem in which it operates.

The product quality and delivery times of ABS are in line with those of the best producers in the world, and its goal is to be the leading special steelmaker in Italy and among the first three in Europe.

Order Book

The Group's order book is well diversified according to geographical area and product line, and for the year ended June 30, 2021, amounts to 3,534 million euro (of which 622 million euro in the production of special steels) compared to 2,936 million euro for the year ended June 30, 2020 (of which 190 million euro for ABS Steel Making).

For the Group, maintaining a significant order book, which includes many innovative plants for green steel production, confirms our customers' propensity to invest in new plants thanks to the competitiveness and technological solutions proposed by Danieli, which today has broad qualifications and references for the entire range of steelmaking products.

Human Resources

As of June 30, 2021, the Danieli Group employed 8,668 people, 1,428 in the Steel Making segment and 7,240 in the Plant Making segment, a decrease of 392 over the figure of 9,060 for the year ended June 30, 2020.

Danieli continues to pursue innovation, efficiency and quality of customer service at a fast pace, encouraging team excellence by promoting merit and teamwork. Danieli Academy will be further expanded to broaden the selection and training of junior employees, but will also provide refresher courses and professional improvement for senior employees.

Consolidated Value Added

The economic value that is generated converts the Group's ability to create wealth and distribute it as remuneration for the stakeholders.

The tables below show how economic value is distributed among stakeholders through the reclassification of data from the consolidated income statement.

The global value added is shared among the following beneficiaries:

• personnel (direct remuneration consisting of wages, salaries, employee termination indemnity and indirect remuneration consisting of social security contributions) and
• the Public Administration (income taxes and miscellaneous taxes)

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