SIGNIFICANT EVENTS AFTER THE CLOSE OF THE YEAR AND BUSINESS OUTLOOK

At the end of December 2022 the governing bodies of the subsidiary Comer Industries Components S.r.l. (hereinafter also "Acquirer") and the subsidiary Walterscheid Monguelfo S.p.A (hereinafter also "Acquiree") drew up and approved the merger plan to be implemented through the incorporation of Walterscheid Monguelfo S.p.A into Comer Industries Components S.r.l. pursuant to Art. 2501ter of the Italian Civil Code. The Acquirer and the Acquiree are both wholly and directly owned by the sole shareholder Comer Industries S.p.A. In March 2023 the deed of merger by incorporation of Walterscheid Monguelfo S.p.A. into Comer Components S.r.l. will be signed, with legal effect as of April 1, 2023 and with accounting and tax effects backdated to January 1, 2023.

As previously discussed in the section on significant events in FY 2022, the prospective merger is justified by the need to simplify the Group's corporate structure following the acquisition of WPG.

On January 9, 2023, the parent company Comer Industries S.p.A. concluded the acquisition of e-comer S.r.l., a newly established company that on December 27, 2022 absorbed the business units of Benevelli Electric Powertrain Solutions and Sitem Electric Motors, for an Enterprise Value of 54 million euros plus a variable component (so-called earn out).

E-comer S.r.l. is the new division dedicated to the market of engines and transmissions for electric vehicles, a sector that the Comer Industries Group intends to focus its growth and innovation in by expanding the range of products offered to the market.

This transaction, which resulted in a cash-out at the closing date of 50 million euros, is perfectly in keeping with the Group's strategy to enter the fastgrowing market for electric vehicle engines and transmissions, expanding the range of products offered and further strengthening its leadership position in the market.

The consideration paid for the transaction at closing was financed by resorting to a medium- to long-term bank loan provided by Crédit Agricole Italia of the same amount. The remaining 4 million euros will be paid in four interest-free annual installments starting from the 12th month following the closing date. The newly acquired e-comer S.r.l. will be consolidated from January 1, 2023.

The current macroeconomic landscape is characterized by a high degree of uncertainty resulting from several factors such as i) the unfolding of the Russia-Ukraine conflict and consequent rise in energy prices; ii) tightening of restrictive monetary policies by major Central Banks to slow the rise in inflation; and iii) a global economic slowdown with consequent impact on demand.

Taking into account the current changing environment, management is focused on the Group's main strategic development directives: i) integration of WPG and streamlining the business model in order to optimize synergies; ii) development of e-comer, the Group's newly established greentech division dedicated to the electric vehicle engine and transmission market; and iii) continued R&D in order to always offer innovative solutions and be at the forefront of the market.

No other specific significant events occurred after the close of the year.