Sabaf S p A : Introduction to the annual report and consolidated disclosure of non-financial information 2022

INTRODUCTION TO THE

ANNUAL REPORT

AND

CONSOLIDATED

DISCLOSURE OF NON-FINANCIAL

INFORMATION

2022

SABAF S.p.A.

Via dei Carpini, 1 - 25035 OSPITALETTO (BS) ITALY

Share capital €11,533,450 fully paid in

www.sabafgroup.com

TABLE OF CONTENTS
INTRODUCTION TO THE ANNUAL REPORT	4
Summary of key performance indicators (KPI)	5
Products and markets	8
CONSOLIDATED DISCLOSURE OF NON-FINANCIAL INFORMATION	15
Methodological note	16
Letter from the Chief Executive Officer to stakeholders	18
Business model, strategic approach and sustainable creation of value	21
Strategic approach and creation of value	21
Sustainable value creation	21
Values, vision and mission	21
Business model	25
Materiality analysis	33
Corporate Governance, Risk Management and Compliance	36
Corporate Governance	36
Risk Management	49
Compliance	51
Sabaf and employees	55
Risks	55
Personnel management policy	56
The people of the Sabaf Group	57
Recruitment policy	60
Personnel training	63
Internal Communication	64
Diversity and equal opportunities	65
Remuneration, incentive and enhancement systems	67
Occupational health and safety and working environment	71
Industrial relations	75
Business climate analysis	76
Disputes	77
Sabaf and environment	78
Risks	78
Health and safety, environmental and energy policy	78
Process and product innovation and environmental sustainability	79
Environmental impact	82
Disputes	87
Sabaf Group/Introduction to the 2022 Annual Report and Consolidated Disclosure of Non-Financial Information	2

Sabaf, the management of product quality and customer relations	88
Risks	88
Quality management policy	88
Sabaf and supply chain management	91
Risks	91
Supply chain management policy	91
Sabaf, Public Administration and Community	93
Sabaf and shareholders	99
Sabaf and lenders	102
Sabaf and competitors	103
EU taxonomy	105
GRI Content Index	106
External assurance	111

Sabaf Group/Introduction to the 2022 Annual Report and Consolidated Disclosure of Non-Financial Information

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INTRODUCTION TO THE ANNUAL REPORT

The publication of the Annual Report of the Sabaf Group, now in its eighteenth edition, confirms the Group's commitment, undertaken since 2005, to an integrated reporting of its economic, social, and environmental performance.

Sabaf, one of the first international-level companies to embrace the trend of integrated reporting, intends to continue along this path, aware that integrated, complete and transparent reporting can benefit both the companies themselves, through a better understanding of the structure of the strategy and greater internal cohesion, and the community of investors, which can thus more clearly understand the connection between strategy, governance and company performance.

The Annual Report provides an overview of the Group's business model and the process of creating corporate value. The business model and the main results achieved (summary of key performance indicators) are in fact presented from the standpoint of the capital employed (financial; social and relational; human; intellectual, infrastructural, and natural) to create value over time, thereby generating results for the business, with positive impacts on the community and on stakeholders as a whole. "Non-financial indicators" include the results achieved in managing and enhancing intangible capital, the main driver that allows monitoring the ability of the company's strategy to create value in a perspective of medium/long-term sustainability.

On 30 December 2016, Legislative Decree no. 254 came into force, which, in implementation of Directive 2014/95/EU on non-financial and diversity information, requires relevant public interest entities to disclose non-financial and diversity information starting from the 2017 financial statements. As a relevant public-interest entity, Sabaf prepared for the sixth year the Consolidated Disclosure of Non-Financial Information presenting the main policies practiced by the company, the management models, the risks, the activities carried out by the Group during 2022, and the related performance indicators as pertains to the topics expressly referred to by Italian Legislative Decree no. 254/2016 (environmental, social, personnel-related, respect for human rights, fight against corruption) and to the extent needed to ensure understanding of the business activity, its trend, its results, and the impacts it produces.

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Summary of key performance indicators (KPIs)

Economic capital			2022	2021	2020
Sales revenues	€/000		253,053	263,259	184,906
EBITDA	€/000		40,092	54,140	37,097
EBIT	€/000		21,887	37,508	20,093
Pre-tax profit	€/000		12,209	29,680	14,509
Net Profit	€/000		15,249	23,903	13,961
Working capital	€/000		79,380	68,631	52,229
Invested capital	€/000		240,528	190,043	174,129
Shareholders' equity	€/000		156,162	122,436	117,807
Net financial debt	€/000		84,366	67,607	56,322
ROCE	%		9.1	19.7	11.5
(return on capital employed)
Dividends paid out	€/000		6,690	6,172	3,924
Human capital			2022	2021	2020

Total employees	no.	1,238	1,278	1,168
men	%	59.5	60.9	62.0
women	%	40.5	39.1	38.0
Average age of personnel
(sum of employees age/	years	40.3	39.5	39.3
total employees at 31/12)

Level of education
(number of graduates/	%		65.1		64.4	61.6
total employees at 31/12)
Leaving turnover
(employees no longer in office/total employees at	%		22.7		17.7	10.8
31/12)
men	%		25.6		21.9	11.5
women	%		18.4		11.2	9.7
Hours of training per employee	h		23.1		17.4	10.8
(hours of training/total employees at 31/12)
Hours of training per collaborator	h		25.9		20.4	13.9
(hours of training/total collaborators at 31/12)
Investments in training of collaborators/turnover	%		0.39		0.27	0.26
Hours of strike for internal causes	h		0		39	0
Injury rate			8.16		15.59	16.10
(number of injuries x 1,000,000/total hours worked)
Injury lost day rate1			0.13		0.26	0.11
(days of absence x 1,000/total hours worked)
Summary indicator of injuries			106		405	177
(injury rate x injury lost day rate x 100)
Jobs created (lost)	no.		(40)		110	133

1 The 2021 injury lost day rate and the summary indicator of injuries have been restated due to the continued absence of an injury in 2022.

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