SAES Getters S p A : 2023 Annual Financial Report

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2023 Annual Financial Report

The present Annual Financial Report represents the English translation of the Italian official document.

It is not compliant with the provisions of the Commission Delegated Regulation (EU) 2019/815 (ESEF Regulation).

For any difference between the two texts, the Italian text shall prevail.

SAES Getters S.p.A

Share capital of 12,220,000 euros fully paid‐in

Registered office:

Viale Italia, 77 - 20045 Lainate (Milan), Italy

Registered with the Milan Court Companies Register No. 00774910152

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Company bodies as at December 31, 2023

Board of Directors

Chairman	Massimo della Porta
Deputy Chairman and Managing Director	Giulio Canale
Directors	Francesca Corberi (1)
	Alessandra della Porta (1) (4)
	Luigi Lorenzo della Porta (1)
	Andrea Dogliotti (1)
	Adriano De Maio (1) (3)
	Gaudiana Giusti (1) (2) (4) (5) (6) (7) (8)
	Stefano Proverbio (1) (2) (4) (5) (6) (8)
	Maria Pia Maspes (1) (2) (5) (6) (8) (9)
Board of Statutory Auditors
Chairman	Vincenzo Donnamaria
Statutory Auditors	Maurizio Civardi
	Sara Anita Speranza (8)
Alternate Statutory Auditors	Massimo Gabelli
	Silvia Olivotto (11)
Independent Auditors	KPMG S.p.A. (10)

1. Non‐Executive Director.
2. Independent Director, pursuant to the criteria of the Borsa Italiana Corporate Governance Code and pursuant to Article 147‐ter, paragraph 4, and Article 148, paragraph 3, of Italian Legislative Decree 58/1998
3. Independent Director, pursuant to the combined provisions of Article 147‐ter, paragraph 4, and Article 148, paragraph 3, of Italian Legislative Decree 58/1998
4. Member of the Remuneration and Appointments Committee.
5. Member of the Audit and Risk and Sustainability Committee.
6. Member of the Committee for Transactions with Related Parties.
7. Lead Independent Director.
8. Member of the Supervisory Body.
9. Independent Director appointed by the Shareholders' Meeting held on April 28, 2023 following the resignation of Luciana Sara Rovelli on March 6, 2023. The term of office of Mariapia Maspes will come to an end together with the terms of the Directors appointed by the Shareholders' Meeting held on April 20, 2021, i.e. with the approval of the financial statements at December 31, 2023.
10. Appointed for the years 2022‐2030 by the Shareholders' Meeting held on April 21, 2022.
11. Alternate Statutory Auditor appointed by the Shareholders' Meeting held on April 28, 2023 following the resignation of Mara Luisa Sartori on June 1, 2022. The term of office of Silvia Olivotto will come to an end together with the terms of the Statutory Auditors appointed by the Shareholders' Meeting held on April 20, 2021, i.e. with the approval of the financial statements as at and for the year ended December 31, 2023.

The mandate of the Board of Directors and the Board of Statutory Auditors, elected on April 20, 2021, will expire on the same date as the Shareholders' Meeting called to approve the financial statements as at and for the year ended December 31, 2023.

Powers of the company bodies

Pursuant to Article 20 of the Articles of Association, the Chairman and the Deputy Chairman and Managing Director are, each of them, separately entrusted with the legal representation of the Company, for the execution of Board of Directors' resolutions, within the limits of and for the exercise of the powers attributed to them by the Board itself.

Following the resolution adopted on April 20, 2021, the Board of Directors granted the Chairman and the Deputy Chairman and Managing Director the powers of ordinary and extraordinary administration, with the exception of the powers strictly reserved to the Board or of those powers reserved by law to the Shareholders' Meeting.

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The Chairman Massimo della Porta is confirmed as Group Chief Executive Officer, with the meaning that such definition and role have in English‐ speaking countries. The Deputy Chairman and Managing Director Giulio Canale has been confirmed in the role of Deputy Group Chief Executive Officer and Group Chief Financial Officer, with the meaning that such definitions and roles have in English‐speaking countries.

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CONTENTS

Letter to Shareholders	5
Report on Operations of the SAES Group	6
SAES Group Consolidated Financial Statements at December 31, 2023	67
Statement of profit or loss	67
Statement of Comprehensive Income	67
Statement of financial position	68
Statement of cash flows	69
Statement of changes in equity	70
Notes	71
Certification of the SAES Group Consolidated Financial Statements	172
drawn up pursuant to Article 81‐ter of the Consob Issuers' Regulations
Report on Operations of SAES Getters S.p.A.	174
Separate Financial Statements of SAES Getters S.p.A. at December 31, 2023	219
Statement of Profit or Loss	219
Statement of Comprehensive Income	220
Statement of Financial Position	221
Statement of cash flows	222
Statement of Changes in Equity	223
Notes	224
Summary table of the key figures of the financial statements of subsidiaries	305
Certification of the Separate Financial Statements of SAES Getters S.p.A.	306
drawn up pursuant to Article 81‐ter of the Consob Issuers' Regulations

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LETTER TO SHAREHOLDERS

Dear Shareholders,

2023 was a year of extreme importance for the Group, marked by the successful conclusion of the negotiations for the sale of the Medical Division which, as you well know, was the most important transaction during the year in terms of value created.

The divestment also marks the third discontinuity in the Group's history, which is now seeing sharply reduced revenue and operating results far from what we were used to, but this should not be a concern because the Group has excellent prospects for organic growth.

The enormous value created will make it possible, on the one hand, to remunerate shareholders through the distribution of dividends and the already announced repurchase of treasury shares, which I hope will be approved by you at the Shareholders' Meeting; on the other hand, it will make it possible to launch an ambitious expansionary strategy program consistent with the new competencies of the Group, combining the usual organic growth with complementary inorganic growth.

The transition of knowledge from fine metallurgy to unconventional chemistry is now complete and the Group is now ready to start a close marketing and commercial activity in new sectors, such as cosmetics, with the clear objective of affirming itself also in these new areas with the same characteristics of innovation and leadership that have always distinguished us.

Inorganic development will be used to complete the expansionary program to increase turnover and strengthen our market position both in sectors in which we already operate, such as packaging or industrial applications, and in the new sectors in which we are preparing to enter, related to unconventional chemistry.

The Group has also launched an important project to rejuvenate the organization that will lead to the gradual replacement of first‐line management over the next few years: I take this opportunity, with this letter, to officially thank all those who will leave us, after having contributed to the success of our Group for many years.

The next three years are therefore very important for the Group which, in addition to being strongly committed to growth, will have to face the generational handover, but I am confident that both objectives will be achieved without any difficulty.

Massimo della Porta

SAES Group CEO

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REPORT ON OPERATIONS OF THE SAES GROUP

Group Financial Highlights

Statement of profit or loss figures	2023	2022	Difference	Difference
(Thousands of euros)		(1)		%
REVENUE
- SAES Industrial	70,864	70,209	655	0.9%
- SAES High Vacuum	31,865	30,967	898	2.9%
- SAES Chemicals	13,293	14,714	(1,421)	-9.7%
- SAES Packaging	5,502	10,641	(5,139)	-48.3%
- Not Allocated (2)		63	32	31	96.9%
Total	121,587	126,563	(4,976)	-3.9%
GROSS PROFIT (LOSS)
- SAES Industrial	34,758	34,681	77	0.2%
- SAES High Vacuum	13,549	14,915	(1,366)	-9.2%
- SAES Chemicals	2,297	2,824	(527)	-18.7%
- SAES Packaging	(966)	1,307	(2,273)	-173.9%
- Not Allocated (3)		(208)	(149)	(59)	39.6%
Total	49,430	53,578	(4,148)	-7.7%
% of revenue	40.7%	42.3%
EBITDA (GROSS OPERATING PROFIT (LOSS))	(11,955)	6,346	(18,301)	-288.4%
% of revenue	-9.8%	5.0%
OPERATING PROFIT (LOSS)	(22,249)	(3,413)	(18,836)	551.9%
% of revenue	-18.3%	-2.7%

PRE-TAX PROFIT (LOSS)

% of revenue

PROFIT (LOSS) from continuing operations

% of revenue

PROFIT (LOSS) from discontinued operations, net of taxes

(12,743)	(19,893)	7,150	-35.9%
-10.5%	-15.7%
(11,020)	(22,242)	11,222	-50.5%
-9.1%	-17.6%
643,316	34,592	608,724	1,759.7%

% of revenue	529.1%	27.3%
PROFIT (LOSS) FOR THE YEAR	632,296	12,350	619,946	5,019.8%
% of revenue	520.0%	9.8%
Statement of financial position figures	December 31, December 31,	Difference	Difference
(Thousands of euros)	2023	2022		%
Property, plant and equipment	53,851	92,697	(38,846)	-41.9%
Equity attributable to the owners of the parent	823,190	264,053	559,137	211.8%
Net financial position	773,334	64,291	709,043	1,102.9%
Other information	2023	2022	Difference	Difference
				%
(Thousands of euros)
Cash flows from operating activities	(39,723)	37,173	(76,896)	-206.9%
Research and development expenses	(10,915)	(10,120)	(795)	7.9%
Personnel expense	(67,185)	(54,216)	(12,969)	23.9%
Acquisition of property, plant and equipment	(9,983)	(15,293)	5,310	-34.7%
(Number)
Employees as at December 31 (4)	655	1,226	(571)	-46.6%

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1. Some comparative amounts do not coincide with what is reported in the 2022 Annual Financial Report as they were reclassified to reflect the effects of the sale of the Nitinol business and in particular, the US subsidiaries Memry Corporation and SAES Smart Materials, Inc., finalized on October 2, 2023. Following this sale, the SAES Medical Nitinol Division ceased to exist and, therefore, the revenue/costs relating to the companies sold, up to the date of sale (revenue/costs for the period January 1 ‐ October 2, 2023), together

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with the income and the accessory costs related to the extraordinary transaction, were classified, in compliance with IFRS 5, under the specific statement of profit or loss item "Profit (loss) from discontinued operations, net of tax effects". The balances for the year 2022 were reclassified accordingly, to ensure comparability between the two years (the reclassifications of the comparative balances are detailed in Note no. 6, paragraph "Reclassifications of the 2022 balances", to the Consolidated Financial Statements at December 31, 2023).

1. Revenue deriving from the completion of development activities and from the market launch of highly innovative products, pursuing the objective of using the Group's advanced technologies to establish itself in new application sectors.
2. This item includes costs that cannot be directly attributed or allocated in a reasonable way to the Business Units, but which refer to the Group as a whole, as well as those costs aimed at the development and market launch of new, highly innovative products.
3. At December 31, 2023, this item includes:

• 641 employees (1,165 at December 31, 2022);
• 14 persons employed at Group companies with contract types other than salaried employment agreements (61 at December 31, 2022).

This figure does not include the personnel (employees and temporary workers) of the joint ventures amounting, according to the percentage of ownership held by the Group, to 22 units at December 31, 2023 (21 units at the end of the previous year, again according to the percentage of ownership held by the Group). Lastly, it should be noted that the personnel (employees and temporary workers) of the US associates Memry Corporation and SAES Smart Materials, Inc., whose sale was finalized on October 2, 2023, consisted of 541 and 59 units, respectively, at that date of sale.

Alternative performance indicators

In order to allow a better assessment of the performance of financial management, the following tables show some "Alternative performance indicators". Below these tables, the methodology for calculating these indices is provided, in line with the indications of the European Securities and Markets Authority (ESMA).

Gross profit and gross profit margin

(Thousands of euros)

	2023	2022
Revenue	121,587	126,563
Raw materials and change in raw materials	(24,995)	(33,843)
Direct labour	(13,583)	(13,565)
Manufacturing overheads	(29,661)	(29,527)
Change in work in progress and finished goods	(3,918)	3,950
Cost of sales	(72,157)	(72,985)
Gross profit	49,430	53,578
Gross profit margin	40.7%	42.3%

The gross profit is calculated as the difference between sales and the industrial costs directly and indirectly attributable to the products sold.

The gross profit margin is calculated as the ratio between the gross profit and the sales.

EBITDA

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(Thousands of euros)

	2023	2022
Revenue	121,587	126,563
Profit for the year	632,296	12,350
Profit (loss) from discontinued operations, net of taxes	643,316	34,592
Income taxes	1,723	(2,349)
Net exchange losses	694	(531)
Share of profit (loss) of equity-accounted investees	(200)	(433)
Impairment losses on loan assets and other financial assets	(2,230)	(2,364)
Net financial income (expense)	11,242	(13,152)
Operating loss	(22,249)
(3,413)
	(9,131)	(8,405)
Depreciation of property, plant and equipment and amortisation of intangible assets
Depreciation of right-of-use assets	(1,152)	(1,259)
Impairment losses on property, plant and equipment and intangible assets	(11)	(95)
EBITDA	(11,955)	6,346
Percentage EBITDA	-9.8%	5.0%

EBITDA (gross operating profit) is not deemed an accounting measure under International Financial Reporting Standards (IFRSs); however, it is believed that EBITDA is an important parameter for measuring the Group's performance and therefore it is presented as an alternative indicator. Since its calculation is not regulated by applicable accounting standards, the method applied by the Group may not be the same as that adopted by other Groups. EBITDA is calculated as "Pre‐tax profit (loss) for the year, before the profit (loss) from discontinued operations, net of exchange gains (losses), share of the profit (loss) of equity‐accounted investees, net financial income (expense), impairment losses and amortisation/depreciation".

Percentage EBITDA is the ratio between EBITDA and sales.

Net Financial Position (NFP)

The Net Financial Position is shown in the following table.

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