GVS S p A : Half year Financial Report 2024

Half-yearly Financial Report at

30 June 2024

GVS Group

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CONTENTS

INFORMATION ABOUT THE COMPANY AND INFORMATION FOR

SHAREHOLDERS	4
GROUP STRUCTURE*	5
CORPORATE BODIES	6
DIRECTORS' REPORT ON OPERATIONS	7
Foreword	7
Group performance and analysis of the results for the first half of the year 2024	7
Investments	14
Research and development	14
Additional information	15
Principal risks and uncertainties	15
Intergroup and related party transactions	16
Significant events occurring in the first half of 2024	16
Events subsequent to the close of the period	17
Business outlook	17
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT 30 JUNE
2024	18
Consolidated statement of assets and liabilities*	18
Consolidated income statement*	19
Comprehensive consolidated income statement	20
Prospectus of changes in consolidated shareholders' equity	21
Consolidated statement of cash flows*	22
EXPLANATORY NOTES TO THE CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AT 30 JUNE 2024	23
1.	General information	23
2.	Summary of the accounting standards adopted	23
3.	Recently issued accounting standards	27
4.	Estimates and assumptions	29
5.	Management of financial risk	30
6.	Information on operating segments	34
7.	Notes to the consolidated statement of assets and liabilities	34
8.	Notes to the consolidated income statement	46
9.	Non-recurringrevenues and operating costs	51
10.	Hyperinflation	52
11. Transactions with related parties	52
12.	Commitments and risks	55
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13.	Directors' and auditors' fees	56
14.	Independent auditor's fees	56
15.	Research and development	56
16.	Positions or transactions resulting from atypical and/or unusual transactions	57
17.	Events of significance following the close of the financial period	57

18. Approval of the condensed interim consolidated financial statements and

authorisation for publication	57
ATTACHED TABLES	58
Consolidated statement of financial position, with indication of the amount of positions
with related parties	58
Consolidated income statement, with indication of the amount of positions with related
parties	59
Consolidated statement of cash flows, with indication of the amount of positions with
related parties	60
Consolidated income statement, with indication of the amount deriving from non-
recurring transactions	61
CERTIFICATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS PURSUANT TO ARTICLE 154 BIS OF LEGISLATIVE DECREE 58/98	62
AUDITING COMPANY REPORT	63

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INFORMATION ABOUT THE COMPANY AND INFORMATION FOR SHAREHOLDERS

REGISTERED OFFICE

GVS S.P.A

Via Roma 50

40069 Zola Predosa

BOLOGNA, ITALY Phone [phone] Fax + 39 051 6176200 www.gvs.com

LEGAL INFORMATION

Share capital: Euro 1,750,000

Tax code 03636630372

VAT number 00644831208

REA of Bologna 0305386

Register of Companies of Bologna 45539

INVESTOR RELATIONS

E-mail:[e-mail]

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GROUP STRUCTURE*

*For information on the company name, registered office, the currency in which the Company operates, share capital of the GVS Group companies and the stake held by GVS SpA, please see the Explanatory Notes.

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CORPORATE BODIES

Board of Directors
Chairman (independent)	Alessandro Nasi
Chief Executive Officer	Massimo Scagliarini
Non-Executive Directors	Marco Pacini
	Grazia Valentini
	Marco Scagliarini
Independent Directors	Simona Scarpaleggia (1) (2)
	Anna Tanganelli (1)
	Pietro Cordova (1) (2)
	Michela Schizzi (2)
Board of Auditors
Chairman	Maria Federica Izzo
Standing auditors	Francesca Sandrolini
	Giuseppe Farchione
Alternate auditors	Alessia Fulgeri
	Mario Difino
Manager responsible for the preparation
of the Company's accounting documents	Emanuele Stanco

Independent Auditors

PricewaterhouseCoopers SpA

1. Member of the Control, Risk and Sustainability and Related Party Transactions Committee
2. Member of the Nominations and Remuneration Committee

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DIRECTORS' REPORT ON OPERATIONS

Foreword

The Interim Report on Operations of GVS SpA (hereinafter "GVS", the "Company" or the "Parent Company" and together with its subsidiaries the "GVS Group" or the "Group") is presented together with the condensed interim consolidated financial statements at 30 June 2024.

The Interim Report on Operations is intended to provide information on the situation of the GVS Group and on operations as a whole and in the various sectors in which it operates, including through subsidiaries.

The tables below have been prepared on the basis of the condensed interim consolidated financial statements at 30 June 2024, to which reference should be made. The latter were prepared in accordance with the International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and approved by the European Union, as well as with measures issued in implementation of Article 9 of Legislative Decree no. 38/2005.

Group performance and analysis of the results for the first half of the year 2024

The GVS Group is one of the world's leading suppliers of advanced filtering solutions for highly critical applications, primarily in the field of Healthcare & Life Sciences.

The table below breaks down revenues from contracts with customers by division in the periods ending 30 June 2024 and 30 June 2023.

(in thousands of Euro)	Half-year ended 30 June
2024	2023
Healthcare Liquid	112,905	113,880
Healthcare Air & Gas	15,480	14,677
Laboratory	16,277	16,313

Healthcare & Life Sciences	144,662	144,870
Powertrain & Drivetrain	13,988	15,276
Safety & Electronics	10,317	10,398
Sport & Utility	8,228	8,432

Energy & Mobility	32,533	34,106
Personal Safety	35,323	32,398
Air Safety	2,304	1,998
Health & Safety	37,627	34,396
Revenue from contracts with customers	214,822	213,372

In the first half of 2024, GVS achieved consolidated revenues of Euro 214.8 million, up 0.7% on the previous year. One highlight is the positive performance of the Health & Safety division, which reported a 9.4% year-on-year increase in turnover, driven by favourable sector dynamics and the achievement of commercial synergies with the RPB Group.

Revenues from the Healthcare & Lifesciences division, compared with the same period last year, recorded growth in the Healthcare Air & Gas business (+5.5%), a stable performance of the Laboratory business of Euro 16.3 million, recovering sharply from the first quarter of 2024, and a slight reduction in the Healthcare Liquid business of Euro 112.9 million.

The Energy & Mobility division recorded a decrease of 4.6% in terms of revenues compared with the same period of the previous year, with a performance that was still negatively affected, although to a lesser extent than in the previous year, by customer de-stocking policies.

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The breakdown of revenues from contracts with customers as at 30 June 2024 is as follows:

• the Healthcare & Life Sciences division, which represents 67.3% of the total, recorded revenues of Euro 144.7 million, with a slight decrease of 0.1% compared to the first half of 2023;
• the Energy & Mobility division, which represents 15.1% of the total, recorded a decrease in turnover level of 4.6% compared to the same period of 2023, reaching Euro 32.5 million;
• the Health & Safety division represents 17.5% of the total and settled at Euro 37.6 million with an increase of 9.4% compared to the same period of the previous year.

Financial statements for the period ending 30 June 2024 are shown below in comparison with those of the same period of the previous year, reclassified on the basis of current practice in financial analysis.

Analysis of reclassified financial position

			The 6-month period ended 30 June
						including
		including				non
		non	2024				2023
(in thousands of Euro)	2024	recurring	Adjusted	%	2023	recurring	Adjusted	%
Revenue from sales and services	214,822		214,822	100.0%	213,372		213,372	100.0%
Other operating income	3,901	1,137	2,764	1.3%	2,595	319	2,276	1.1%
Total revenues	218,723	1,137	217,586	101.3%	215,967	319	215,648	101.1%
Raw materials purchases costs and variation in
inventories	(64,435)		(64,435)	-30.0%	(70,285)		(70,285)	-32.9%
Services costs	(29,692)	(250)	(29,442)	-13.7%	(28,710)	(268)	(28,442)	-13.3%
Other operating costs	(3,721)	(1,232)	(2,489)	-1.2%	(4,139)	(857)	(3,282)	-1.5%
Added value	120,875	(345)	121,220	56.4%	112,833	(806)	113,639	53.3%
Personnel costs	(69,808)	(631)	(69,177)	-32.2%	(67,213)	(649)	(66,564)	-31.2%
EBITDA	51,067	(976)	52,043	24.2%	45,620	(1,455)	47,075	22.1%
Amortisation and depreciation	(21,874)	(8,034)	(13,840)	-6.4%	(21,403)	(8,579)	(12,824)	-6.0%
Provisions and write-downs	(520)		(520)	-0.2%	(479)		(479)	-0.2%
EBIT	28,673	(9,010)	37,683	17.5%	23,738	(10,034)	33,772	15.8%
Financial income and costs	(7,482)	(2,810)	(4,672)	-2.2%	(13,773)	(1,784)	(11,989)	-5.6%
Pre-tax result	21,191	(11,820)	33,011	15.4%	9,965	(11,818)	21,783	10.2%
Income tax	(2,171)	6,044	(8,215)	-3.8%	(2,629)	2,654	(5,283)	-2.5%
Group's and minority shareholders' net profit or loss	19,020	(5,776)	24,796	11.5%	7,336	(9,164)	16,501	7.7%

The consolidated economic results of operations of the period ending 30 June 2024 were as follows: total revenues from ordinary operations amounted to Euro 217.6 million (Euro 215.6 million in the first half of 2023); EBITDA from ordinary operations amounted to Euro 52 million (Euro 47.1 million in the first half of 2023); EBIT from ordinary operations came to Euro 37.7 million (Euro 33.8 million in the first half of 2023).

EBITDA from ordinary operations grew by 10.6% compared to the first six months of 2023, with a 24.2% margin on revenues, a significant improvement compared to the 22.1% margin recorded in the first half of 2023. We note the strong performance in the second quarter of 2024, with EBITDA on revenues from ordinary operations of 25%. The result for the period is supported by the contribution of actions aimed at recovering the profitability implemented by the Group.

EBIT from ordinary operations with a margin on revenues of 17.5% amounts to Euro 37.7 million (+11.6%) compared to Euro 33.8 million in the same period of the previous year and in line with the growth achieved at the level of EBITDA from ordinary operations.

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Net financial costs from ordinary operations (net of exchange rate gains of Euro 3,011 thousand recorded in the first six months of 2024 and exchange rate losses of Euro 4,663 thousand recorded in 2023) increased in the period in question, going from Euro 7,326 thousand in the period ended 30 June 2023 to Euro 7,683 thousand in the period ended 30 June 2024. This was mainly due to the increase in market interest rates some loans are related to.

The pre-tax result of recurring activities reached Euro 33 million in the period in question, with a decrease of Euro 11.2 million compared to Euro 21.8 million in 2023, mainly due to the effect of the exchange gain recorded in 2024 against the effect of the exchange rate loss recorded during the first half of 2023.

Non-recurrent proceeds and charges in the period ending 30 June 2024 represent: (i) income resulting from the partial release of the provision for risks set aside in previous years for a specific dispute arising before the acquisition relating to Haemotronic SpA (Euro 1,137 thousand); (ii) costs relating to Group personnel following the ongoing reorganisation process (totalling Euro 631 thousand), (iii) consultancy costs relating to services received on an exceptional basis (Euro 250 thousand); (iv) a cost relating to the downsizing of the indemnity to be obtained from the seller of Haemotronic SpA, for a specific dispute, for which the specific provision for risks was released for the same amount (Euro 1,137 thousand); (v) costs allocated to the reorganisation fund (Euro 95 thousand); (vi) amortisation of intangible and tangible assets recognised following the purchase price allocation of the Kuss, RPB, Haemotronic and STT groups (Euro 8,034 thousand) and finally (vii) interest recognised following the discounting of payables for earn out for acquisitions of the STT and Haemotronic groups (Euro 2,810 thousand), net of the related tax effect. Non-recurring charges for taxes also include Euro 2,942 thousand relating to the revenues pertaining to the tax benefit of the Patent Box held by the parent company GVS SpA.

Non-recurrent proceeds and charges in the period ending 30 June 2023 represent: (i) grants obtained from the Chinese government for the relocation of the Suzhou production site (Euro 319 thousand); (ii) costs relating to Group personnel following the reorganisation process in progress (totalling Euro 649 thousand); (iii) consultancy costs relating to services received of an exceptional nature (Euro 268 thousand), (iv) costs allocated to the provision for the relocation and rationalisation of the Group's production sites (totalling Euro 650 thousand); (v) costs allocated to the provision for indirect taxes and related penalties for Euro 207 thousand; (vi) depreciation of intangible and tangible assets recorded following the purchase price allocation of the Kuss, RPB, STT and Haemotronic groups (for a total of Euro 8,048 thousand); (vii) to write-downs of tangible fixed assets resulting from the relocation and rationalisation plan of the Group's production sites for Euro 531 thousand; and finally (viii) to the interest recorded following the discounting of payables for earn out for the acquisitions of the STT and Haemotronic groups (Euro 1,784 thousand), net of the related tax effect. Non-recurring charges for taxes also include Euro 416 thousand relating to the costs of the tax dispute with the Rumanian subsidiary for direct taxes.

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Analysis of reclassified equity position

	As at 30 June	As at 31
(in thousands of Euro)	2024	December 2023
Net intangible fixed assets	473,333	471,701
Right of use assets, net	21,466	20,207
Net tangible fixed assets	128,974	122,884
Financial fixed assets	3,133	3,531
Other fixed assets	5,225	10,718
Fixed capital (A)	632,131	629,041
Net trade receivables	59,429	54,114
Inventories	87,614	84,808
Payables to suppliers	(44,587)	(38,452)
Net commercial working capital (B)	102,456	100,470
Other current assets	28,319	21,203
Other current liabilities	(43,140)	(40,465)
Total current assets/liabilities (C)	(14,821)	(19,263)
Net working capital (D)= (B) + (C)	87,636	81,207
Other non-current liabilities (E)	(34,338)	(35,447)
Employee termination indemnity and end of service indemnity (F)	(3,221)	(3,120)
Provisions for risks and charges (G)	(5,656)	(8,529)
Net invested capital (H) = (A+D+E+F+G)	676,552	663,153
Shareholders' equity	(357,409)	(334,478)
Consolidated shareholders' equity (I)	(357,409)	(334,478)
(Short-term financial indebtedness)/Liquidity	6,386	60,503
(Net medium-/long-term financial indebtedness)	(325,529)	(389,178)
Net financial indebtedness (L)	(319,143)	(328,675)
Own funds and net financial indebtedness (M) = (I+L)	(676,552)	(663,153)

Fixed capital at 30 June 2024 shows an increase of Euro 3,090 thousand, mainly as a result of investments made in relation to tangible assets, rights of use and intangible assets, and for positive exchange rate conversion, net of depreciation and disposals during the period. Specifically, net intangible assets increased by Euro 1,632 thousand, of which Euro 4,141 thousand for investments in the period and Euro 6,822 thousand for the positive exchange rate conversion reserve, net of depreciation and amortisation for Euro 9,898 thousand. Tangible fixed assets recorded an increase of Euro 6,090 thousand, of which Euro 15,073 thousand relating to investments capitalised in the period net of depreciation and write-downs amount to Euro 8,263 thousand. The net increase in rights of use of Euro 1,259 thousand is mainly due to increases in the period of Euro 5,732 thousand net of amortisation for the period totalling Euro 3,713 thousand. Finally, other non-current assets decreased by Euro 5,493 thousand due to the change in deferred tax assets of Euro 1,676 thousand, the decrease in the fair value of active derivatives of Euro 780 thousand, and finally, following the reduction in other non-current receivables of Euro 3,037 thousand, due to the resolution of a specific dispute to which these receivables were related, arising before the acquisition and relating to Haemotronic SpA.

The balance of trade net working capital at 30 June 2024 shows an increase of Euro 1,986 thousand compared to 31 December 2023, mainly due to the increase in inventories and net trade receivables of Euro 2,806 thousand and Euro 5,315 thousand, respectively, net of the increase in trade payables of Euro 6,135 thousand.

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