1.3 COMMENTS ON KEY PERFORMANCE INDICATORS

The Group monitors its performance using various indicators that may not be comparable to similar measurements adopted by other groups. Group Management considers that these indicators provide a comparable measurement of the results on the basis of standardized performance factors, facilitating the identification of operating trends and allowing management to take action also during the year with swift corrective actions whenever necessary.

1.3.1 DEFINITION OF THE INDICATORS

The performance indicators used by the Group and reported herein are based on the following definitions, revised this year resulting in a restatement of comparative data:

"EBITDA": represents the value of Operating Profit (EBIT) adjusted by the amount of the following entries:

(+) Amortization, Depreciation and other write-downs of fixed assets, in particular:

• Amortization of intangible fixed assets;

• Depreciation of tangible fixed assets;

• Other write-downs of fixed assets;

"EBIT": is the Operating Profit in the Consolidated Income Statement.

"Net profit": indicates the result of the Consolidated Income Statement.

"Adjusted EBIT": indicates the item Operating Income in the Consolidated Income Statement adjusted for depreciation and amortization resulting from the accounting – as required by IFRS 3 – of the purchase price in connection with the business combination transaction that took place at the end of 2021 and related to the acquisition of WPG.

"Adjusted Net Income": represents the Net Profit in the Consolidated Income Statement adjusted for depreciation and amortization and the related theoretical tax effects arising from the accounting – as required by IFRS 3 – of the purchase price in connection with the business combination transaction that took place at the end of 2021 and related to the acquisition of WPG.

"Commercial working capital": indicates the algebraic sum of the following balance sheet items:

(+) current asset items: Inventories;

Trade Receivables;

(-) current liability items:

Trade payables.

"Invested capital": is the algebraic sum of the following items:

(+) Commercial working capital,

(+) Tangible (including Rights of use), intangible and financial fixed assets

(+) Tax assets and deferred tax assets, current tax assets

(+) Other short and long-term receivables, of a non-financial nature;

( - ) Other short and long-term payables, of a non-financial nature;

(+) Current and deferred tax liabilities

( - ) Severance Indemnity Fund (TFR) and provisions for risks and charges.

"Net financial position": indicates the difference between cash and cash equivalents and debt of a financial nature as follows:

(+) Current Asset items (A):

• Other short-term financial receivables

• Marketable securities at fair value

• Cash and cash equivalents

(-)

Non-current and current liabilities (B):

• Long-term loans

• Long-term derivative financial instruments

• Short-term loans

• Short-term derivative financial instruments

• Other short- and long-term financial payables (including payables relating to lease contracts recognized in accordance with IFRS 16)

• Non-current trade payables

The Net financial position, as represented, achieved the same results that would have been obtained according with recommendation reported in Reminder no. 5/21 of April 29, 2021 issued by Consob, which refers to ESMA Guideline 32-382-1138 of March 4, 2021.

"Free cash flow": Cash flow generated (absorbed) by operations + Net cash flow from investing/ disinvesting activities.

"Cash conversion rate": represents the ratio of Free Cash Flow to EBITDA.

"Capex": indicates the increase occurring in investments in tangible and intangible fixed assets (net of revaluations, capital grants and the effects of currency conversion) which, following International Accounting Standards, are recorded in the corresponding heading in equity, reduced by disinvestments and excluding the equity effects (i) of internal capitalizations of costs for internally generated development activities, excluding the impacts related to the application of IFRS 16.

"Equity": indicates the algebraic sum of Share capital, Statutory reserves, Profits/losses and Other similar reserves corresponding to the total of the "Share capital and reserves" heading.

"ROI (return on investment)": ratio of EBIT to invested capital.

ROE (return on equity)": ratio of Net Profit to Net Equity.

"EPS (Earnings per share)": ratio of Net Profit to total number of shares outstanding as of December 31, 2022.

Average staff in the year": simple average on the basis of the workforce employed by the Group, including temporary workers.

The Group prepares the income statement according to the nature of costs and the Cash flow statement with the indirect method.

1.3.2 COMMENTS ON THE INDICATORS

For a better representation of the change in economic results between 2022 and 2021, please refer to the following section on the Proforma 2021 unaudited data, as in 2021 WPG's economic data were included in the consolidated financial statements for the month of December only. Despite the market environment it operates in, the Group achieved consolidated revenues of 1,237.6 million euros (up 106.9% from the previous year, a year that includes WPG's only for December), which includes revenues from the Comer Industries brands of 643.9 million euros and revenues from the Walterscheid brands of 593.7 million euros. Revenues generated abroad represent 91% of the total.

This performance has also been positively affected by the revaluation of the main reference currencies in which Comer Industries operates. More specifically, the appreciation of the US dollar and the Chinese yuan positively affected this figure by 38.7 million euros. The amount of revenues on a constant currency basis compared to the previous year would have been 1,198.9 million euros (+100.5%).

Thanks to the consolidation of Walterscheid brands for 12 months, the Agricultural sector recorded a 152% increase in sales. The Industrial sector, on the other hand, closed the year with a +59% over the previous year.

Therefore the Group demonstrated its ability to fully seize market opportunities in addition to benefiting from the consolidation of the new brand acquired at the end of the previous year.

EBITDA stood at 180.0 million euros or 14.5% of sales compared to 77.6 million euros (figure adjusted to include the item "Write-downs of receivables and other risk provisions" to make it consistent with the new representation applied on 2022) in the previous year (equal to 13.0% of sales), an improvement of 132.0%, again pointing out that the 2021 figure included WPG only for the month of December.

The net financial position shows a negative balance of 148.9 million euros, an improvement over the previous year of 28.1 million euros. The balance as of December 31, 2022 includes 151.3 million euros of cash, gross of loans for 242.5 million euros and 57.8 million euros of financial payables arising from the accounting treatment of leases in accordance with IFRS 16. The Group generated cash from operations of 94.1 million euros, which net of capital expenditures of 34.1 million euros produced free cash flow of 60.0 million euros. The Cash Conversion rate was 33.3% in the fiscal year just ended. In a year marked by tensions throughout the supply chain and particularly sustained demand, the Group chose to protect relationships with key suppliers by significantly reducing payment terms compared to the previous year. Inventories also increased to better ensure on-time delivery.

The parent company Comer Industries S.p.A. distributed dividends in the amount of 14.3 million euros in fiscal 2022.

Net profit reached 90.7 million euros, corresponding to 7.3% of turnover compared to 39.4 million euros in the previous year (6.6% of sales). The adjusted net profit for 2022, which excludes depreciation, amortization and related theoretical tax effects attributable to the acquisition of WPG according to the Purchase Price Allocation accounting treatment, is 101.8 million euros.

ROE, calculated on net profit, stands at 20.4% compared to 11.9% in the previous year and benefited from the growth in operating income.

Earnings per share stand at 3.2 euros per share (1.4 euros per share in 2021).