SUPPLIER MANAGEMENT

375 Group's suppliers

Gruppo Mastrotto relies exclusively on suppliers who operate in accordance with current legislation and the rules set out in its Code of Ethics.

Considering the activities related to the main leather processing processes (supply of leather, chemical products, processing carried out by subcontractors, transport services), Gruppo Mastrotto in 2022 was supplied by 375 suppliers, in line with the values of previous years.

The largest categories are the suppliers of raw and semifinished leather (33%) and those of chemical products (32%); followed at a distance by subcontractors and transport.

There is an increase in transport service providers, which go from 52 to 64.

Distribution of the number of suppliers by product category

Raw and semi-finished hides

Processing on behalf of third parties Transportation service Chemicals

131 million Euro is the average value of purchases over the three-year period 20202022 for the four main categories of suppliers.

55% of this expenditure is concentrated on Italian suppliers: 24% in the Vicenza tanning district and 31% in the rest of the country.

The share of spending concentrated on Italian suppliers grew steadily over the three-year period 20-22, from 49% to 55%. The figure shows the positive impact on result generated in the territories where Gruppo Mastrotto operates.

When analysing the different supply categories, it is possible to notice the following:

• expenditure on the purchase of raw and semi-finished hides is fairly evenly distributed among Italian, European and nonEuropean suppliers;

• the purchases of chemical products are concentrated for 76% on Italian suppliers and for 17% on European suppliers

• third party processing and transport services are a total prerogative of Italian suppliers; in the first case 93% of the expenditure is concentrated on suppliers located in the Arzignano district, while in the second case almost all of the expenditure is destined to Italian suppliers.

The relationship between Gruppo Mastrotto and its suppliers is defined through specific procedures that allow suppliers to be qualified.

In the case of suppliers of chemical products, Gruppo Mastrotto has established, in order to protect the health of workers, the environment and the users of finished products, restrictions on the use of certain categories of chemical substances, largely based on the legislation in force in the European Union and in the United States.

From the point of view of reducing environmental impacts, for about 10 years an active collaborative relationship has been developed with chemical suppliers, aimed for example at reducing the presence of sulphates and favouring the purchase of water-based paints.