2021 ANNUAL
FINANCIAL REPORT
TABLE OF CONTENTS
01 REPORT ON OPERATIONS
16 SABAF GROUP CONSOLIDATED FINANCIAL STATEMENTS at 31 December 2021
78 SABAF S.p.A. SEPARATE FINANCIAL STATEMENTS at 31 December 2021
1
SABAF GROUP
REPORT ON OPERATIONS
2
Business and Financial situation of the Group
(
€
/000)
2021
%
2020
%
2021-2020
change
% change
Sales revenue
263,259
100%
184,906
100%
78,353
+42.4%
EBITDA
54,140
20.6%
37,097
20.1%
17,043
+45.9%
EBIT
37,508
14.2%
20,093
10.9%
17,415
+86.7%
Pre-tax profit
29,680
11.3%
14,509
7.8%
15,171
+104.6%
Profit attributable to the Group
23,903
9.1%
13,961
7.6%
9,942
+71.2%
Basic earnings per share (€)
2.132
1.240
0.892
+71.9%
Diluted earnings per share (€)
2.132
1.240
0.892
+71.9%
The Sabaf Group ended the 2021 financial year with a record high revenue of €263 million, up
42.4% from €184.9 million in 2020.
The Group is successfully pursuing ahead of schedule the organic growth strategy outlined in
the 2021-2023 Business Plan, which focuses on strengthening technical and commercial
relations with some of the major global players, increasing internationalisation and exploiting
synergies with the most recently acquired companies.
In 2021, demand was solid in all markets, with particularly high peaks in the first half of the
year. In a highly dynamic environment, the Sabaf Group was able to react promptly and
always guarantee the continuity and reliability of supplies to customers.
Average sales prices in 2021 were 3% higher than in 2020, largely offsetting considerable
increases in the purchase prices of the main raw materials (aluminium alloys, steel and brass),
electricity and gas.
Higher volumes and a high level of capacity utilisation further improved profitability: EBITDA
was €54.1 million (20.6% of turnover), up 45.9% compared to €37.1 million last year (20.1% of
turnover) and EBIT was €37.5 million (14.2% of turnover) with an 86.7% increase compared to
€20.1 million in 2020. The net profit for 2021 was €23.9 million, up by 71.2% compared to the
figure of €14 million in 2020.
3
The subdivision of sales revenues by product line is shown in the table below:
2021
%
2020
%
% change
Gas parts
182,468
69.3%
129,834
70.2%
+40.5%
Hinges
58,375
22.3%
41,326
22.3%
+41.3%
Electronic components
22,416
7.4%
13,746
7.4%
+63.1%
Total
263,259
100%
184,906
100%
+42.4%
In 2021, the increase in sales of electronic components was also particularly significant,
continuing to benefit from cross-selling with the traditional products in the Group's portfolio
and from the strong drive to develop new components.
The geographical breakdown of revenues is shown below:
2021
%
2020
%
% change
Europe (excluding Turkey)
92,935
35.3%
69,618
37.7%
+33.5%
Turkey
65,526
24.9%
44,806
24.2%
+46.2%
North America
30,472
11.6%
22,700
12.3%
+34.2%
South America
39,589
15.0%
27,639
14.9%
+43.2%
Africa and Middle East
19,614
7.5%
12,177
6.6%
+61.1%
Asia and Oceania
15,123
5.7%
7,966
4.3%
+89.8%
Total
263,259
100%
184,906
100%
+42.4%
The increase in sales was very strong in all geographical areas, with peaks in Asia, Africa and
the Middle East, indicating an increasingly global presence of our Group.
The impact of labour cost on sales decreased from 23.6% in 2020 to 20.5% in 2021.
Net finance expense as a percentage of turnover was extremely minimal, also in view of the
low interest rates. During the year, the Group recognised in the income statement negative
forex differences of €7.4 million, mainly due to fluctuations in exchange rates with the Turkish
lira (€4.8 million of negative forex differences were recognised in 2020).
In 2021, the Group recognised positive income taxes of €5 million with a tax rate of 16.8%.
The main impacts on the tax rate are shown in Note 32 to the consolidated financial
statements.
4
The Group’s statement of financial position, reclassified based on financial criteria, is
illustrated below
1
:
(
€
/000)
31/12/2021
31/12/2020
Non-current assets
130,093
131,543
Short-term assets
2
141,494
108,246
Short-term liabilities
3
(72,863)
(56,017)
Working capital
4
68,631
52,229
Provisions for risks and charges, Post-employment
benefits, deferred taxes
(8,681)
(9,643)
Net invested capital
190,043
174,129
Short-term net financial position
18,897
(24,169)
Medium/long-term net financial position
(86,504)
(32,153)
Net financial debt
(67,607)
(56,322)
Shareholders’ equity
122,436
117,807
Cash flows for the financial year are summarised in the table below:
(
€
/000)
2021
2020
Opening liquidity
13,318
18,687
Operating cash flow
23,216
25,067
Cash flow from investments
(23,752)
(17,296)
Free cash flow
(536)
7,771
Cash flow from financing activities
41,233
(8,133)
Acquisitions
(6,296)
(3,063)
Foreign exchange differences
(4,070)
(1,944)
Cash flow for the period
30,331
(5,369)
Closing liquidity
43,649
13,318
In 2021, the Group generated an operating cash flow of €23.2 million (€25.1 million in 2020).
The higher levels of activity and the increase in the price of materials led to an increase in
working capital, which stood at €68.6 million at 31 December 2021, compared to €52.2 million
at the end of 2020: moreover, its impact on turnover decreased to 26.1% compared to 28.2%
in 2020.
1
Net financial debt and liquidity shown in the tables below are defined in compliance with the net financial
position detailed in Note 22 of the consolidated financial statements, as required by CONSOB memorandum of
28 July 2006
2
Sum of Inventories, Trade receivables, Tax receivables and Other current receivables
3
Sum of Trade payables, Tax payables and Other liabilities
4
Difference between short-term assets and short-term liabilities
5
In 2021, the Sabaf Group made net organic investments of €23.8 million (€17.3 million in
2020). During the period, key investments were made:
▪ in Turkey, where the production capacity of the Electronics Division was doubled and
production lines for gas valves and hinges for dishwashers were set up;
▪ in India, where the production of gas components (valves and burners) is about to
start);
▪ in Mexico, where work began on the construction of a new plant in San Luis de
Potosi.
During the financial year, the Group paid dividends for €6.2 million, no treasury shares were
purchased.
At 31 December 2021, the net financial debt was €67.6 million, compared with €56.3 million
on 31 December 2020. The change in net financial debt during the year is summarised in the
table below:
Net financial debt at 31 December 2020
(56,322)
Free cash flow
(536)
Dividends paid out
(6,172)
Buy-back of shares
-
Put options on minority interests – outlay lower than the recognised
financial liabilities
438
Financial liabilities IFRS 16 - new contracts entered into in 2021
(954)
Change in fair value of derivative financial instruments
(83)
Change in the scope of consolidation
97
Foreign exchange differences and other changes
(4,075)
Net financial debt at 31 December 2021
(67,607)
At 31 December 2021, shareholders' equity amounted to €122.4 thousand; the ratio between
the net financial debt and the shareholders’ equity was 0.55 versus 0.48 in 2020.
Economic and financial indicators
2021
2020
pro-forma
1
pro-forma
1
Change in turnover
+42.4%
+42.3%
+18.6%
+8.4%
ROCE (return on capital employed)
19.7%
11.5%
Net debt/EBITDA
1.25
1.52
Net debt/equity ratio
55%
48%
Market capitalisation (31/12)/equity ratio
2.26
1.49
Please refer to the introductory part of the Annual Report for a detailed examination of other
key performance indicators.
1
The change in pro-forma turnover is calculated on a like-for-like basis.
6
Risk Factors
Risks related to coronavirus pandemic
In 2021, the coronavirus pandemic continued to directly and indirectly affect the company's
activities. Since the outbreak of the pandemic, the Group Sabaf has promptly implemented
several counteracting and mitigating actions to minimise the impact on the business. Although
the most critical phase of the pandemic now seems to be over, all controls continue to be
activated, and any elements that may change the following risk factors are constantly
monitored:
- risks related to the health of people;
- the risk arising from possible local or national new lockdowns, with the consequent
impossibility of guaranteeing the continuity of the company's activities;
- the risk arising from a temporary reduction in personnel availability;
- risks related to supplier reliability and possible interruptions in the supply chain;
- risks related to violent fluctuations in demand and failure to comply with contractual
agreements with customers.
Risks related to the conflict between Russia and Ukraine
In relation to the recent conflict between Ukraine and Russia, note that the Group has an
insignificant direct exposure to the markets of Russia, Belarus and Ukraine. However, these
are markets supplied by some of the Sabaf Group's customers, who are exposed to varying
degrees in terms of market access and changes in consumer behaviour.
The outbreak of the conflict immediately led to severe tensions in the prices of electricity, gas
and raw materials used by the Group. Should the situation not be resolved rapidly, these
factors could significantly affect demand and, more generally, the performance of the sector in
which the Group operates, especially in Europe.
The repercussions on the macroeconomic system are not quantifiable in that they are related
to future developments of the conflict, which are currently unpredictable.
As part of its periodic risk assessment process, the Group identified and assessed the following
main risks:
Risks of external context
Risks deriving from the external context in which Sabaf operates, which could have a negative
impact on the economic and financial sustainability of the business in the medium/long-term.
The most significant risks in this category are related to general economic conditions, trend in
demand and product competition.
Strategic risks
Strategic risks that could negatively impact Sabaf's medium-term performance, including, for
example, risks related to low profitability of certain product lines, the risks arising from the
mismatch between market needs and product innovation and the loss of business
opportunities in the Chinese market.
7
Operational risks
Risks of suffering losses due to inadequate or malfunctioning processes, human resources and
information systems. This category includes financial risks (e.g. losses deriving from the
volatility of the price of raw materials and from fluctuations in exchange rates), risks related to
production processes (e.g. product liability, saturation level of production capacity),
organisational risks (e.g. loss of key staff and expertise and/or the difficulty of replacing them)
and Information Technology risks.
Legal and compliance risks
Risks related to Sabaf's contractual liabilities and compliance with the regulations applicable to
the Group, including: Legislative Decree 231/2001, Law 262/2005, HSE regulations,
regulations applicable to listed companies, tax regulations, labour regulations, international
trade regulations and intellectual property regulations.
The main risks are described in detail below as well as the relevant risk management actions
that are currently being implemented.
Performance of the sector
The Group’s financial position, results and cash flows are affected by several factors related to
the performance of the sector, including:
▪ general macro-economic performance: the household appliance market is affected by
macro-economic factors such as gross domestic product, consumer and business
confidence, interest rate trend, the cost of raw materials, the unemployment rate and
the ease of access to credit;
▪ concentration of the end markets: as a result of mergers and acquisitions, customers
have acquired bargaining power;
▪ stagnation of demand in mature markets (i.e. Europe) in favour of growth in emerging
Countries, characterised by different sales conditions and a more unstable macro-
economic environment;
▪ increasing competition, which in some cases imposes aggressive pricing policies.
To cope with this situation, the Group aims to retain and reinforce its leadership position
wherever possible through:
▪ the maintenance of high quality and safety standards, which make it possible to
differentiate the product through the use of resources and implementation of
production processes that are not easily sustainable by competitors;
▪ development of new products characterised by superior performance compared with
market standards, and tailored to the needs of the customer;
▪ strengthening of business relations with the main players in the sector;
▪ diversification of commercial investments in growing and emerging markets with local
commercial and productive investments;
▪ entry into new segments / business sectors.
Instability of Emerging countries in which the Group operates
The Group is exposed to risks related to (political, economic, tax, regulatory) instability in
some emerging countries where it produces or sells. Any embargoes or major political or
economic instability, or changes in the regulatory and/or local law systems, or new tariffs or
taxes imposed could negatively affect a portion of Group turnover and the related profitability.
8
Sabaf has taken the following measures to mitigate the above risk factors:
▪ diversifying investments at international level, setting different strategic priorities that,
in addition to business opportunities, also consider the different associated risk profiles;
▪ monitoring of the economic and social performance of the target countries, also
through a local network of agents and collaborators;
▪ timely assessment of (potential) impacts of any business interruption on the markets of
Emerging countries;
▪ adoption of contractual sales conditions that protect the Group (e.g. insuring business
loans or advance payments).
The presence of Sabaf in Turkey, the country that represents the main production hub of
household appliances at European level, is of particular importance: over the years, local
industry attracted heavy foreign investments and favoured the growth of important
manufacturers. In this context, the Sabaf Group created a production plant in Turkey in 2012
that realises today 10% of total production. In 2018, the Group also acquired 100% of Okida
Elektronik, a leader in Turkey in the design, manufacture and sale of electronic control boards
for household appliances. In 2021 the Group opened a new plant in Turkey. In 2021, Turkey
represented 18% of the Group's production and 25% of its total sales. The Turkish market is
estimated to represent around 5% of the final destination of Sabaf components. In
consideration of the strategic importance of this Country, the management assessed the risks
that could arise from any difficulties/impossibilities of operating in Turkey and envisaged
actions to mitigate this risk.
Product competition
The Sabaf Group is mainly active in the production of gas cooking components (valves and
burners); therefore, there is the risk of not correctly assessing the threats and opportunities
deriving from the competition of alternative products (such as electric cooking), with the
consequence of not adequately making use of any market opportunities and/or suffering from
negative impacts on margins and turnover.
In recent years, the Group carried out strategic operations aimed at reducing the dependence
of its business on the gas cooking sector, concluding significant acquisitions of companies
operating in related sectors.
The Group has recently undertaken a strategic development plan to extend its product range,
setting up a dedicated project team in Italy. Research and development also benefits from the
expertise derived from the acquisition of Okida, a Turkish leader in electronic components.
Loss of business opportunities in the Chinese market
With a production of over 20 million hobs per year, China is one of the world's most important
markets. After many years of commercial presence only, in 2015 Sabaf started a small
production unit, which still does not guarantee an adequate economic return.
The Group is reviewing its strategy for approaching the Chinese market and intends to:
▪ implement shortly a plan suitable for using growth opportunities offered by the local
market;
▪ continue to develop product lines in accordance with the needs of the Chinese market
and in compliance with local regulations;
9
▪ adopt and maintain a quality-price mix in line with the expectations of potential local
customers.
Financial risks
The Sabaf Group is exposed to a series of financial risks, due to:
▪ Commodity price volatility: A significant portion of the Group’s purchase costs is
represented by aluminium, steel and brass. Metal prices rose sharply during 2021,
forcing the Group to renegotiate sales prices several times to compensate for the
increase in costs. Based on market conditions and contractual agreements, the Group
may not be able to pass on changes in raw material prices to customers in a timely
and/or complete manner, with consequent effects on margins.
▪ Increase in energy costs: Some of the Group's production processes, such as the die-
casting of aluminium parts and the enamelling of burner covers, use gas as an energy
source. Other production facilities absorb significant electricity consumption. The
increase in energy costs can significantly affect margins. In order to mitigate this risk,
the Group is constantly evaluating possible actions to contain energy consumption,
including by improving the efficiency of the most energy-intensive plants.
▪ Exchange rate fluctuation: The Group carries out transactions primarily in euro;
however, transactions also take place in other currencies, such as the U.S. dollar, the
Brazilian real, the Turkish lira and the Chinese renminbi. in particular, since turnover in
US dollars accounted for 18.6% of consolidated turnover, the possible depreciation
against the euro and the real could lead to a loss in competitiveness on the markets in
which sales are made in that currency (mainly South and North America). Moreover,
the net value of assets and liabilities in foreign subsidiaries constitutes an investment in
foreign currency, which generates a translation difference on consolidation of the
Group, with an impact on the comprehensive income statement and the financial
position.
▪ Trade receivable: The high concentration of turnover on a small number of
customers generates a concentration of the respective trade receivables, with a
resulting increase in the negative impact on economic and financial results in the event
of insolvency of any one of them.
For more information on financial risks and the related management methods, see Note 36 of
the consolidated financial statements as regards disclosure for the purposes of IFRS 7.
Research and Development
In 2021, the Sabaf Group set up a dedicated team to develop new solutions for home cooking,
with the aim of creating innovative products that meet the needs of manufacturers of
household appliances and new consumer trends.
The most innovative projects in 2021 include the development and prototyping of burners
capable of operating with 100% hydrogen (replacing methane), both in domestic cooking
appliances and for the professional sector. In this context, the Sabaf Group is participating as a
strategic supplier in the Hy4Heat project, funded by BEIS (Department for Business, Energy &
Industrial Strategy), the UK Department for Business, Energy and Industrial Strategy. The
Hy4Heat project aims to determine whether it is technically possible, safe and cost-effective to
replace natural gas (methane) with 100% hydrogen in residential and commercial buildings
and gas appliances.
10
The other most important research and development projects carried out in 2021 were as
follows:
Gas parts
▪ the study for a 4kw multi-cone burner, based on the existing platform, was launched
▪ burners for the US market and new customised burners were developed
▪ two special versions of mini triple ring burners were developed for the South American
market
▪ a new snap-in catenary was developed and industrialised
▪
premium flame taps were developed
for kitchens
Hinges
▪ the development of motorised hinges for built-in ovens continued;
▪ new hinge platforms for dishwashers were developed for strategic customers.
▪ a new hidden hinge for oven doors (in standard and dual soft versions) was designed
for the global platform of a major customer
▪ a soft-close hinge for top-loading washing machines was industrialised
Electronic components
▪ a control platform for gas cookers with a touch interface was developed;
▪ controls were developed for glass ceramic cooking with class B certification;
▪ a timer platform compatible with North American market regulations was developed.
The improvement in production processes continued throughout the Group, also in order to
minimise set-up times and make production more flexible. The Group also develops and
manufactures its own machinery, equipment and moulds.
Development costs to the tune of €1,770,000 were capitalised, as all the conditions set by
international accounting standards were met; in other cases, they were charged to the income
statement.
Disclosure of non-financial information
Starting from 2017, the Sabaf Group publishes the consolidated disclosure of non-financial
information required by Legislative Decree no. 254/2016 in a report separate from this Report
on Operations. The disclosure of non-financial information provides all the information needed
to ensure understanding of the Group's activities, performance, results and impact, with
particular reference to environmental, social and personnel issues, respect for human rights
and the fight against active and passive corruption, which are relevant considering the Group's
activities and characteristics.
The disclosure of non-financial information is included in the same file in which the report on
operations, the consolidated financial statements, the separate financial statements of the
parent company Sabaf S.p.A. and the remuneration report are published.
It should be noted that since 2005, the Sabaf Group has drawn up an Annual Report on its
economic, social and environmental sustainability performance.
Personnel
In 2021, the Sabaf Group suffered no on-the-job deaths or serious accidents that led to serious
or very serious injuries to staff for which the Group was definitively held responsible, nor was
11
it held responsible for occupational illnesses of employees or former employees, or causes of
mobbing.
For all other information, please refer to the Disclosure of non-financial information.
Environment
In 2021 there was no:
▪ damage caused to the environment for which the Group was held definitively
responsible;
▪ definitive fines or penalties imposed on the Group for environmental crimes or damage.
For all other information, please refer to the Disclosure of non-financial information.
Corporate Governance
For a complete description of the corporate governance system of the Sabaf Group, see the
report on corporate governance and on the ownership structure, available in the Investor
Relations section of the company website.
Internal Control System on Financial Reporting
The internal control system on financial reporting is described in detail in the report on
corporate governance and on ownership structure.
With reference to the "conditions for listing shares of parent companies set up and regulated
by the law of states not belonging to the European Union" pursuant to articles 36 and 39 of the
Market Regulations, the Company and its subsidiaries have administrative and accounting
systems that can provide the public with the accounting situations prepared for drafting the
consolidated report of the companies that fall within the scope of this regulation and can
regularly supply management and the auditors of the Parent Company with the data necessary
for drafting the consolidated financial statements. The Sabaf Group has also set up an effective
information flow to the independent auditor as well as continuous information on the
composition of the corporate bodies of the subsidiaries, together with information on the
offices held, and requires the systematic and centralised gathering as well as regular updates of
the formal documents relating to the articles of association and granting of powers to
corporate bodies. The conditions exist as required by article 36, letters a), b) and c) of the
Market Regulations issued by CONSOB.
Model 231
The Organisation, Management and Control Model, adopted pursuant to Legislative Decree
231/2001, is described in the report on company governance and on the ownership structure,
which should be reviewed for reference.
Personal data protection
Sabaf S.p.A. has an Organisational Model for the management and protection of personal data
consistent with the provisions of European Regulation 2016/679 (General Data Protection
Regulation - GDPR). Specific projects are implemented or are being implemented for all Group
companies for which the GDPR is applicable.
Derivative financial instruments
For the comments on this item, please see Note 36 of the consolidated financial statements.
12
Atypical or unusual transactions
Sabaf Group companies did not execute any unusual or atypical transactions in 2021.
Management and coordination
Sabaf S.p.A. is not subject to management and coordination by other companies.
Sabaf S.p.A. exercises management and coordination activities over its Italian subsidiaries,
Faringosi Hinges s.r.l., A.R.C. s.r.l., C.M.I. s.r.l. and C.G.D. s.r.l.
Intra-group transactions and related-party transactions
The relationships between the Group companies, including those with the parent company,
are regulated under market conditions, as well as the relationships with related parties, defined
in accordance with the accounting standard IAS 24. The details of intra-group transactions and
other related-party transactions are given in Note 37 of the consolidated financial statements
and in Note 35 of the separate financial statements of Sabaf S.p.A.
Business outlook
In the first weeks of 2022, demand remained strong in many of the Group's major markets and
sales order flow was good. This trend is expected to continue in the coming months, also
supported by the gradual increase in supplies related to new orders. For the whole of 2022, the
Sabaf Group expects to achieve revenues ranging from €275 to €280 million, up by 5%-6% on
2021.
The Group acted promptly to counteract the effects of the increases in energy and raw
materials: further increases in sales prices were negotiated and actions were taken to contain
energy consumption, also by increasing the efficiency of the most energy-consuming plants.
Strategies to mitigate currency risk were also defined. In this way, the Group believes it will be
able to maintain excellent profitability in line with historical averages.
These assumptions do not take into account the potential impacts of the recent conflict
between Ukraine and Russia, which are currently not quantifiable as they are related to future
developments in the conflict, the outcome of which cannot be determined. Although the
Group has a non-significant direct exposure to the markets of Russia, Belarus and Ukraine, it is
exposed to indirect effects on the price trends of raw materials, electricity and gas, the supply
chain and final demand.
13
Business and financial situation of Sabaf S.p.A.
(
€
/000)
2021
2020
Change
% change
Sales revenue
144,034
102,583
41,451
+40.4%
EBITDA
23,078
15,820
7,258
+45.9%
EBIT
13,837
6,610
7,227
+109.3%
Pre-tax profit (EBT)
14,227
6,304
7,923
+125.7%
Net Profit
10,044
6,410
3,634
+56.7%
The reclassification based on financial criteria is illustrated below:
(
€
/000)
31/12/2021
31/12/2020
Non-current assets
1
142,549
123,679
Non-current financial assets
10,708
5,537
Short-term assets
2
82,572
69,738
Short-term liabilities
3
(46,453)
(36,520)
Working capital
4
36,119
33,218
Provisions for risks and charges, Post-employment benefits,
deferred taxes
(2,954)
(3,013)
Net invested capital
186,422
159,421
Short-term net financial position
10,502
(22,602)
Medium/long-term net financial position
(82,515)
(26,891)
Total financial debt
5
(72,013)
(49,493)
Shareholders’ equity
114,409
109,928
1
Excluding Financial assets
2
Sum of Inventories, Trade receivables, Tax receivables and Other current receivables
3
Sum of Trade payables, Tax payables and Other liabilities
4
Difference between short-term assets and short-term liabilities
5
Determined in accordance with Consob Communication of 28 July 2006 (Note 22 of the separate financial
statements)
14
Cash flows for the financial year are summarised in the table below:
(
€
/000)
2021
2020
Opening liquidity
1,595
8,343
Operating cash flow
17,187
9,590
Cash flow from investments
(28,407)
(13,381)
Free cash flow
(11,220)
(3,791)
Cash flow from financing activities
39,358
(2,957)
Cash flow for the period
28,138
(6,748)
Closing liquidity
29,733
1,595
The 2021 financial year ended with a turnover 40.4% higher than in 2021, thanks to a very
strong demand, increased portions on certain strategic customers and increases in sales prices.
The investments of the financial year were mainly used:
- for €9.1 million for tangible assets (plant, machinery, equipment);
- for €12.9 million to subscribe to capital increases in subsidiaries, in order to financially
support their development plans;
- for increasing the shareholdings in subsidiaries by €6.4 million.
At 31 December 2021, working capital stood at €36.1 million compared with €33.2 million at
the end of the previous year: its percentage impact on turnover stood at 25.1% from 32.4% at
the end of 2020.
The net financial debt was €72 million, compared with €49.5 million at 31 December 2020.
At the end of the year, shareholders' equity amounted to €114.4 million, compared with €109.9
million in 2020. The ratio between the net financial debt and the shareholders’ equity was
63%; it was 45% at the end of 2020.
15
Reconciliation between parent company and consolidated shareholders’ equity and
net profit for the period
Pursuant to the CONSOB memorandum of 28 July 2006, a reconciliation statement of the
result of the 2021 financial year and Group shareholders' equity at 31 December 2021 with the
same values of the parent company Sabaf S.p.A. is given below:
31/12/2021
31/12/2020
Description
Profit for
the year
Shareholders’
equity
Profit for
the year
Shareholders’
equity
Profit and shareholders’ equity of parent
company Sabaf S.p.A.
10,044
114,409
6,410
109,928
Equity and consolidated company results
15,008
96,538
8,734
90,566
Derecognition of the carrying value of
consolidated equity investments
300
(86,089)
620
(73,816)
Put options on minorities
438
0
456
(6,831)
Intercompany eliminations
(1,250)
(2,414)
(1,758)
(1,778)
Other adjustments
143
(8)
(103)
(262)
Minority interests
(780)
(911)
(398)
(4,809)
Profit and shareholders’ equity attributable
to the Group
23,903
121,525
13,961
112,998
Proposal for allocation of 2021 profit
As we thank our employees, the Board of Statutory Auditors, the independent auditors and the
Supervisory Authorities for their effective collaboration, we ask the shareholders to approve
the financial statements for the year ended 31 December 2021, with the proposal to allocate
the profit for the year of €10,043,877 in the following manner:
- a dividend of €0.60 per share to be paid to shareholders as from 1 June 2022 (ex-date 30
May 2022 and record date 31 May 2022). With regard to treasury shares, we ask you to
allocate an amount corresponding to the dividend on the shares held in portfolio on the ex-
date to the Extraordinary Reserve;
- the remainder to the Extraordinary Reserve.
16
CONSOLIDATED FINANCIAL
STATEMENTS
AT 31 DECEMBER 2021
Via dei Carpini, 1 – OSPITALETTO (BS) Italy
Share capital €11,533,450 fully paid in
www.sabafgroup.com
Sabaf Group | Consolidated financial statements at 31 December 2021
17
GROUP STRUCTURE AND CORPORATE BODIES
Group structure
Parent company
SABAF S.p.A.
Subsidiaries and equity interest pertaining to the Group
Companies consolidated on a line-by-line basis
Faringosi Hinges s.r.l.
100%
Sabaf do Brasil Ltda.
100%
Sabaf Beyaz Esya Parcalari Sanayi Ve Ticaret Limited Sirteki (Sabaf
Turkey)
100%
Sabaf Appliance Components (Kunshan) Co., Ltd.
100%
Okida Elektronik Sanayi ve Tickaret A.S
100%
Sabaf US Corp.
100%
A.R.C. s.r.l.
100%
Handan A.R.C. Burners Co., Ltd.
51%
Sabaf India Private Limited
100%
Sabaf Mexico Appliance Components S.A. de c.v.
100%
C.M.I. s.r.l.
100%
C.G.D. s.r.l.
100%
Honorary Chairman
Giuseppe Saleri
Board of Directors
Chairman
Claudio Bulgarelli
Vice Chairman (*)
Nicla Picchi
Chief Executive Officer
Pietro Iotti
Director
Gianluca Beschi
Director
Alessandro Potestà
Director
Cinzia Saleri
Director (*)
Carlo Scarpa
Director (*)
Daniela Toscani
Director (*)
Stefania Triva
(*) independent directors
Board of Statutory Auditors
Chairman
Alessandra Tronconi
Statutory Auditor
Maria Alessandra Zunino de Pignier
Statutory Auditor
Mauro Vivenzi
Independent Auditors
EY S.p.A.
Sabaf Group | Consolidated financial statements at 31 December 2021
18
Consolidated statement of financial position
Notes
31/12/2021
31/12/2020
(
€
/000)
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
1
Investment property
2
Intangible assets
3
Equity investments
4
Non-current receivables
5
Deferred tax assets
21
Total non-current assets
CURRENT ASSETS
Inventories
6
Trade receivables
7
Tax receivables
8
Other current receivables
9
Current financial assets
10
Cash and cash equivalents
11
Total current assets
ASSETS HELD FOR SALE
TOTAL ASSETS
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY
Share capital
12
Retained earnings, Other reserves
13
Profit for the year
Total equity interest of the Group
Minority interests
Total shareholders’ equity
NON-CURRENT LIABILITIES
Loans
14
Post-employment benefit and retirement provisions
16
Provisions for risks and charges
17
Deferred tax liabilities
21
Total non-current liabilities
CURRENT LIABILITIES
Loans
14
Other financial liabilities
15
Trade payables
18
Tax payables
19
Other payables
20
Total current liabilities
LIABILITIES HELD FOR SALE
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
Sabaf Group | Consolidated financial statements at 31 December 2021
19
Consolidated income statement
Notes
2021
2020
(
€
/000)
INCOME STATEMENT COMPONENTS
OPERATING REVENUE AND INCOME
Revenue
23
Other income
24
Total operating revenue and income
OPERATING COSTS
Materials
25
(142,355 )
(82,966 )
Change in inventories
Services
26
(52,377 )
(34,264 )
Personnel costs
27
(53,964 )
(43,700 )
Other operating costs
28
(1,531 )
(1,981 )
Costs for capitalised in-house work
Total operating costs
(217,780 )
(155,003 )
OPERATING PROFIT BEFORE DEPRECIATION AND
AMORTISATION, CAPITAL GAINS/LOSSES, AND
WRITE-DOWNS/WRITE-BACKS OF NON-CURRENT
ASSETS
Depreciations and amortisation
1, 2, 3
(16,869 )
(16,968 )
Capital gains on disposals of non-current assets
Value adjustments of non-current assets
(141 )
EBIT
Financial income
29
Financial expenses
30
(1,179 )
(2,146 )
Exchange rate gains and losses
31
(7,399 )
(4,812 )
Profits and losses from equity investments
4
PROFIT BEFORE TAXES
Income taxes
32
(4,997 )
(149 )
PROFIT FOR THE YEAR
of which:
Minority interests
PROFIT ATTRIBUTABLE TO THE GROUP
EARNINGS PER SHARE (EPS)
33
Base (€)
Diluted (€)
Sabaf Group | Consolidated financial statements at 31 December 2021
20
Consolidated statement of comprehensive income
2021
2020
(
€
/000)
PROFIT FOR THE YEAR
Total profits/losses that will not be subsequently
reclassified under profit (loss) for the year
Actuarial evaluation of post-employment benefit
Tax effect
(6 )
(3 )
Total profits/losses that will be subsequently
reclassified under profit (loss) for the year
Forex differences due to translation of financial statements in foreign currencies
(14,552 )
(12,564 )
Hedge accounting for derivative financial instruments
(398 )
Total other profits/(losses) net of taxes for the year
(14,930 )
(12,551 )
TOTAL PROFIT
of which:
Net profit for the period attributable to minority interests
Total profits/losses that will be subsequently
reclassified under profit (loss) for the year
Total profit attributable to minority interests
TOTAL PROFIT ATTRIBUTABLE TO THE GROUP
Sabaf Group | Consolidated financial statements at 31 December 2021
21
Statement of changes in consolidated shareholders’ equity
(
€
/000)
Share
capital
Share
premium
reserve
Legal
reserve
Treasury
shares
Translation
reserve
Post-
employment
benefit
discounting
reserve
Other
reserves
Profit for the
year
Total Group
shareholders'
equity
Minority
interests
Total
shareholders’
equity
Balance at 31 December 2019
(2,268 )
(18,939 )
(546 )
Allocation of 2019 profit
- carried forward
(9,915 )
IFRS 2 measurement stock grant plan
Hedge accounting for derivatives
Purchase of treasury shares
(2,073 )
(2,073 )
(2,073 )
Change in the scope of consolidation
(2,657 )
Dividends paid out
(3,924 )
(3,924 )
(3,924 )
Other changes
(25 )
(15 )
Total profit at 31 December 2020
(12,564 )
Balance at 31 December 2020
(4,341 )
(31,503 )
(541 )
Allocation of 2020 profit
- carried forward
(7,789 )
- dividends paid out
(6,172 )
(6,172 )
(6,172 )
IFRS 2 measurement stock grant plan
Treasury share transactions
(438 )
0
0
Change in the scope of consolidation
(4,678 )
Other changes
Total profit at 31 December 2021
(14,552 )
(398 )
Balance at 31 December 2021
(3,903 )
(46,055 )
(521 )
Sabaf Group | Consolidated financial statements at 31 December 2021
22
Consolidated statement of cash flows
2021
2020
Cash and cash equivalents at beginning of year
Profit for the year
Adjustments for:
- Depreciations and amortisation
- Write-downs of non-current assets
- Realised gains/losses
(237 )
(105 )
- Valuation of the stock grant plan
- Profits and losses from equity investments
(8 )
- Net financial income and expenses
- Income tax
Change in post-employment benefit
(85 )
(180 )
Change in risk provisions
(99 )
Change in trade receivables
(4,604 )
(16,507 )
Change in inventories
(24,929 )
(3,881 )
Change in trade payables
Change in net working capital
(16,469 )
(6,175 )
Change in other receivables and payables, deferred taxes
(1,515 )
Payment of taxes
(5,296 )
(2,999 )
Payment of financial expenses
(1,167 )
(1,235 )
Collection of financial income
Cash flows from operations
Investments in non-current assets
- intangible
(2,106 )
(1,097 )
- tangible
(22,803 )
(16,623 )
- financial
(50 )
Disposal of non-current assets
Cash flow absorbed by investments
(23,752 )
(17,296 )
Free cash flow
(536 )
Repayment of loans
(47,381 )
(18,413 )
Raising of loans
Short-term financial assets
Purchase/sale of treasury shares
(2,073 )
Payment of dividends
(6,172 )
(3,924 )
Cash flow absorbed by financing activities
(8,133 )
A.R.C. acquisition
(1,650 )
C.M.I. acquisition
(4,743 )
(3,063 )
ARC Handan consolidation
Foreign exchange differences
(4,070 )
(1,944 )
Net cash flows for the year
(5,369 )
Cash and cash equivalents at end of year (Note 10 and 11)
Sabaf Group | Consolidated financial statements at 31 December 2021
23
Explanatory Notes
ACCOUNTING STANDARDS
Statement of compliance and basis of presentation
The consolidated financial statements of the Sabaf Group for the 2021 financial year have
been prepared in compliance with the International Financial Reporting Standards (IFRS)
issued by the International Accounting Standards Board (IASB) and endorsed by the
European Union. Reference to IFRS also includes all current International Accounting
Standards (IAS). The financial statements have been prepared in euro, the current currency
in the economies in which the Group mainly operates, rounding amounts to the nearest
thousand, and are compared with consolidated financial statements for the previous year,
prepared according to the same standards. They consist of the statement of financial
position, the income statement, the statement of changes in shareholders’ equity, the
statement of cash flows and these explanatory notes. The financial statements have been
prepared on a historical cost basis except for some revaluations of property, plant and
equipment undertaken in previous years, and are considered a going concern. The Group
assessed that it is a going concern (as defined by paragraphs 25 and 26 of IAS 1 and by
Art. 2423 bis of the Italian Civil Code), also due to the strong competitive position, high
profitability and solidity of the financial structure.
Financial statements
The Group has adopted the following formats:
▪ current and non-current assets and current and non-current liabilities are stated
separately in the statement of the financial position;
▪ an income statement that expresses costs using a classification based on the nature
of each item;
▪ a comprehensive income statement that expresses revenue and expense items not
recognised in profit (loss) for the year as required or permitted by IFRS;
▪ a statement of cash flows that presents cash flows originating from operating
activity, using the indirect method.
Use of these formats permits the most meaningful representation of the Group’s operating
results, financial position and cash flows.
Scope of consolidation
The scope of consolidation at 31 December 2021 comprises the parent company Sabaf
S.p.A. and the following companies controlled by Sabaf S.p.A.:
▪ Faringosi Hinges s.r.l.
▪ Sabaf do Brasil Ltda.
▪ Sabaf Beyaz Esya Parcalari Sanayi Ve Ticaret Limited Sirteki (Sabaf Turkey)
▪ Sabaf Appliance Components (Kunshan) Co., Ltd.
▪ A.R.C. s.r.l.
▪ Handan ARC Burners Co. Ltd.
▪ Okida Elektronik Sanayi ve Tickaret A.S
▪ Sabaf U.S.
Sabaf Group | Consolidated financial statements at 31 December 2021
24
▪ Sabaf India Private Limited
▪ Sabaf Mexico Appliance Components S.A. de c.v.
▪ C.M.I. s.r.l.
▪ C.G.D. s.r.l.
Compared to the consolidated financial statements at 31 December 2020, the companies
Sabaf Mexico Appliance Components, in which Sabaf S.p.A. made a capital contribution
of €3,128 thousand during 2021, and Handan A.R.C. Burners Co. Ltd, a company indirectly
held through A.R.C. s.r.l. and previously measured at equity, in which the Group acquired
control of 51% during 2021 following the purchase of an additional 30% of the share capital
of A.R.C. as described in the following paragraph, are consolidated on a line-by-line basis.
In October 2021, Sabaf S.p.A. completed the acquisition of 30% of the capital of A.R.C.
s.r.l., in execution of the agreement signed between the parties in 2016, when Sabaf had
acquired the 70% of A.R.C. As a result of this transaction Sabaf now holds 100% of A.R.C.
In November 2021, Sabaf S.p.A. also completed the acquisition of 15.75% of the share
capital of C.M.I. s.r.l. by the minority shareholder Starfire s.r.l. (Guandong Xingye
Investment Group). Sabaf S.p.A. had acquired 68.5% of C.M.I. in July 2019 and a further
15.75% stake in September 2020. As a result of this transaction Sabaf now holds 100% of
C.M.I..
On 31 December 2021, the merger through incorporation of C.M.I. Polska Sp. Z.o.o. into
C.M.I. s.r.l. became effective. This transaction did not affect the scope of consolidation or
other elements of these consolidated financial statements.
The companies in which Sabaf S.p.A. simultaneously possess the following three elements
are considered subsidiaries: (a) power over the company; (b) exposure or rights to variable
returns resulting from involvement therein; (c) ability to affect the size of these returns by
exercising power. Subsidiaries are consolidated from the date on which control begins until
the date on which control ceases.
Consolidation criteria
The data used for consolidation have been taken from the income statements and
statements of financial position prepared by the directors of the individual subsidiary
companies. These figures have been appropriately amended and restated, when
necessary, to align them with international accounting standards and with uniform group-
wide classification criteria.
The criteria applied for consolidation are as follows:
a) assets and liabilities, income and costs in financial statements consolidated on a
line-by-line basis are incorporated into the Group financial statements, regardless
of the entity of the equity interest concerned. Moreover, the carrying value of equity
interests is derecognised against the shareholders’ equity relating to investee
companies;
b) positive differences arising from elimination of equity investments against the
carrying value of shareholders’ equity at the date of first-time consolidation are
attributed to the higher values of assets and liabilities when possible and, for the
remainder, to goodwill. In accordance with the provisions of IFRS 3, since 1
Sabaf Group | Consolidated financial statements at 31 December 2021
25
January 2004, the Group has not amortised goodwill and instead subjects it to
impairment testing;
c) payable/receivable and cost/revenue items between consolidated companies and
profits/losses arising from intercompany transactions are derecognised;
d) the portion of shareholders’ equity and net profit for the period pertaining to
minority shareholders is posted in specific items of the balance sheet and income
statement.
Conversion into euro of foreign-currency income statements and statements of
financial position
Separate financial statements of each company belonging to the Group are prepared in the
currency of the country in which that company operates (functional currency). For the
purposes of the consolidated financial statements, the financial statement of each foreign
entity is expressed in euro, which is the Group’s functional currency and the reporting
currency for the consolidated financial statements.
Balance sheet items in accounts expressed in currencies other than euro are converted by
applying current end-of-year exchange rates.
Income statement items are converted at average exchange rates for the year.
Foreign exchange differences arising from the comparison between opening shareholders’
equity converted at current exchange rates and at historical exchange rates, together with
the difference between the net result expressed at average and current exchange rates, are
allocated to “Other Reserves” in shareholders’ equity.
The exchange rates used for conversion into euro of the financial statements of the foreign
subsidiaries, prepared in local currency, are shown in the following table:
Description of
currency
Exchange rate in
effect at
31/12/2021
Average
exchange rate
2021
Exchange rate in
effect at
31/12/2020
Average
exchange rate
2020
Brazilian real
6.3101
6.3778
6.3735
5.8929
Turkish lira
15.233
10.510
9.1131
8.0548
Chinese
renminbi
7.1947
7.6271
8.0225
7.8664
Polish Zloty
4.5969
4.5651
4.5597
4.4431
Indian Rupee
84.229
87.439
89.660
84.638
Mexican peso
23.143
23.985
-
-
Segment reporting
The Group’s operating segments in accordance with IFRS 8 - Operating Segment are
identified in the business segments that generate revenue and costs, whose results are
periodically reassessed by top management in order to assess performance and decisions
regarding resource allocation. The Group operating segments are the following:
▪ gas parts (household and professional);
▪ hinges;
▪ electronic components for household appliances.
Sabaf Group | Consolidated financial statements at 31 December 2021
26
Accounting policies
The accounting standards and policies applied for the preparation of the consolidated
financial statements at 31 December 2021, unchanged versus the previous year, are shown
below:
Property, plant and equipment
These are recognised at purchase or manufacturing cost. The cost includes directly
chargeable ancillary costs. These costs also include revaluations undertaken in the past
based on monetary revaluation rules or pursuant to company mergers. Depreciation is
calculated according to rates deemed appropriate to spread the carrying value of tangible
assets over their useful working life. Estimated useful working life in years, unchanged
compared to previous financial years, is as follows:
Buildings
33
Light constructions
10
General plant
10
Specific plant and machinery
6 – 10
Equipment
4 – 10
Furniture
8
Electronic equipment
5
Vehicles and other transport means
4 – 5
Ordinary maintenance costs are expensed in the year in which they are incurred; costs
that increase the asset value or useful working life are capitalised and depreciated
according to the residual possibility of utilisation of the assets to which they refer.
Land is not depreciated.
Leased assets
The Group assesses at the time of signing an agreement whether it is, or contains, a lease,
or if the contract gives the right to control the use of an identified asset for a period of time
in exchange for a consideration.
The Group adopts a single recognition and measurement model for all leases according to
which the assets acquired relating to the right of use are shown under assets at purchase
value less depreciation, any impairment losses and adjusted for any re-measurement of
lease liabilities.
Assets are depreciated on a straight-line basis from the starting date of the agreement until
the end of the useful life of the asset or the end of the lease agreement, whichever comes
first. Set against recognition of such assets, the amounts payable to the lessor, are posted
among short- and medium-/long-term payables, by measuring them at the present value
of the lease payments not yet made. Moreover, financial charges pertaining to the period
are charged to the income statement.
Adoption of the accounting standard IFRS 16 “Leases”
The Group applied IFRS 16 from 1 January 2019 by using the amended retrospective
approach.
When evaluating the lease liabilities, the Group discounted the payments due for the lease
using the incremental borrowing rate, the weighted average of which was 3.86% on 31
December 2021 and 2.52% on 31 December 2020. The rate was defined taking also
Sabaf Group | Consolidated financial statements at 31 December 2021
27
account of the currency in which the lease agreements are denominated and the country
in which the leased asset is located.
The lease term is calculated based on the non-cancellable period of the lease, including
the periods covered by the option to extend or to terminate the lease if it is reasonably
certain that those options will be exercised or not exercised, taking account of all relevant
factors that create an economic incentive relating to those decisions.
Goodwill
Goodwill is the difference between the purchase price and fair value of investee
companies’ identifiable assets and liabilities on the date of acquisition.
As regards acquisitions completed prior to the date of IFRS adoption, the Sabaf Group has
used the option provided by IFRS 1 to refrain from applying IFRS 3 – concerning business
combinations – to acquisitions that took place prior to the transition date.
Consequently, goodwill arising in relation to past acquisitions has not been recalculated
and has been posted in accordance with Italian GAAPs, net of amortisation reported up to
31 December 2003 and any losses caused by a permanent value impairment.
After the transition date, goodwill – as an intangible asset with an indefinite useful life – is
not amortised but subjected annually to impairment testing to check for value loss, or more
frequently if there are signs that the asset may have suffered impairment (impairment test).
Equity investments in associates and joint ventures
An associated company is a company on which the Group exercises significant influence.
Significant influence is the power to participate in determining the financial and
operational policies of the associated company without having control or joint control over
it. A joint venture is a joint control agreement in which the parties holding the joint control
have rights on the net assets of the agreement.
The Group's equity investment in associates and joint ventures is measured using the
equity method: the equity investment is initially entered at cost, subsequently, the carrying
value of the equity investment is increased or decreased to reflect the investor's share of
the investee's profits and losses realised after the acquisition date.
Goodwill pertaining to the associated company or joint venture is included at the carrying
value of the equity investment and is not subject to individual assessment of impairment).
Other intangible assets
As established by IAS 38, other intangible assets acquired or internally produced are
recognised as assets when it is probable that use of the asset will generate future economic
benefits and when asset cost can be measured reliably. If it is considered that these future
economic benefits will not be generated, the development costs are written down in the
year in which this is ascertained.
Such assets are measured at purchase or production cost and - if the assets concerned
have a finite useful life - are amortised on a straight-line basis over their estimated useful
life. Estimated useful working life in years, unchanged compared to previous financial
years, is as follows:
Customer relationship
15
Brand
15
Patents
9
Know-how
7
Sabaf Group | Consolidated financial statements at 31 December 2021
28
Development costs
10
Software
3 - 5
Impairment
At each end of reporting period, the Group reviews the carrying value of its tangible and
intangible assets to determine whether there are signs of impairment losses of these assets.
If there is any such indication, the recoverable amount of said assets is estimated so as to
determine the total of the write-down. If it is not possible to estimate recoverable amount
individually, the Group estimates the recoverable amount of the cash generating unit
(CGU) to which the asset belongs.
In particular, the recoverable amount of the cash generating units (which generally
coincide with the legal entity to which the capitalised assets refer) is verified by
determining the value of use. The recoverable amount is the higher of the net selling price
and value of use. In measuring the value of use, future cash flows net of taxes, estimated
based on past experience, are discounted to their present value using a pre-tax rate that
reflects current market valuations of the present cost of money and specific asset risk. The
main assumptions used for calculating the value of use concern the discount rate, growth
rate, expected changes in selling prices and cost trends during the period used for the
calculation. The growth rates adopted are based on future market expectations in the
relevant sector. Changes in the sales prices are based on past experience and on the
expected future changes in the market. The Group prepares operating cash flow forecasts
based on the most recent budgets approved by the Board of Directors of the consolidated
companies, draws up the forecasts for the coming years and determines the terminal value
(current value of perpetual income), which expresses the medium- and long-term
operating flows in the specific sector.
If the recoverable amount of an asset (or CGU) is estimated to be lower than its carrying
value, the asset’s carrying value is reduced to the lower recoverable amount, recognising
impairment in the income statement.
When there is no longer any reason for a write-down to be maintained, the carrying value
of the asset (or of the cash-generating unit) - with the exception of goodwill - is increased
to the new value resulting from the estimate of its recoverable amount, but not beyond the
net carrying value that the asset would have had if it had not been written down for
impairment. Reversal of impairment loss is recognised in the income statement.
Investment property
As allowed by IAS 40, non-operating buildings and constructions are assessed at cost net
of depreciation and losses due to cumulative impairment. The depreciation criterion
applied is the asset’s estimated useful life, which is considered to be 33 years. If the
recoverable amount of the investment property – determined based on the market value
of the properties – is estimated to be lower than its carrying value, the asset’s carrying
value is reduced to the lower recoverable amount, recognising impairment in the income
statement.
When there is no longer any reason for a write-down to be maintained, the carrying value
of the asset (or cash generating unit) is increased to the new value stemming from the
estimate of its recoverable amount – but not beyond the net carrying value that the asset
would have had if it had not been written down for impairment. Reversal of impairment
loss is recognised in the income statement.
Sabaf Group | Consolidated financial statements at 31 December 2021
29
Equity investments and non-current receivables
Equity investments in companies other than subsidiaries, associates and joint ventures are
classified as financial assets measured at fair value, which normally corresponds to the
transaction price including directly attributable transaction costs. Subsequent changes in
fair value are recognised through profit or loss (FVPL) or, if the option is exercised in
accordance with the standard, in Other comprehensive income (FVOCI) under the heading
"Instrument reserve at FVOCI". Non-current receivables are stated at their presumed
realisable value.
Inventories
Inventories are measured at the lower of purchase or production cost – determined using
the weighted average cost method – and the corresponding fair value represented by the
replacement cost for purchased materials and by the presumed realisable value for finished
and semi-processed products – calculated taking into account any manufacturing costs
and direct selling costs yet to be incurred. Inventory cost includes accessory costs and the
portion of direct and indirect manufacturing costs that can reasonably be assigned to
inventory items. Inventories subject to obsolescence and low turnover are written down
in relation to their possibility of use or realisation. Inventory write-downs are derecognised
in subsequent years if the reasons for such write-downs cease to exist.
Trade receivables and other financial assets
Initial recognition
Upon initial recognition, financial assets are classified, as the case may be, on the basis of
subsequent measurement methods, i.e. at amortised cost, at fair value recognised in other
comprehensive income (OCI) and at fair value through profit or loss.
The classification of financial assets at initial recognition depends on the characteristics of
the contractual cash flows of the financial assets and on the business model that the Group
uses to manage them.
Trade receivables that do not contain a significant financing component are valued at the
transaction price determined in accordance with IFRS 15. See the “Revenue from
Contracts with Customers” paragraph.
Other financial assets are recognised at fair value plus, in the case of a financial asset not
at fair value through profit or loss, transaction costs.
For a financial asset to be classified and measured at amortised cost or at fair value
recognised in OCI, it must generate cash flows that depend solely on the principal and
interest on the amount of principal to be repaid (known as "solely payments of principal
and interest (SPPI)"). This measurement is referred to as the SPPI test and is carried out
at the instrument level.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below.
Financial assets at amortised cost (debt instruments)
This category is the most important for the Group. The Group measures the financial assets
at amortised cost if both of the following requirements are met:
▪ the financial asset is held as part of a business model whose objective is to hold
financial assets for the purpose of collecting contractual cash flows and
Sabaf Group | Consolidated financial statements at 31 December 2021
30
▪ the contractual terms of the financial asset envisage, at certain dates, cash flows
represented solely by payments of principal and interest on the amount of principal
to be repaid.
Financial assets at amortised cost are subsequently measured using the effective interest
method and are subject to impairment
.
Gains and losses are recognised in the income
statement when the asset is derecognised, modified or revalued.
Financial assets at amortised cost of the Group include trade receivables.
Financial assets at fair value through profit or loss
This category includes all assets held for trading, assets designated at initial recognition as
financial assets measured at fair value with changes recognised in the income statement,
or financial assets that must be measured at fair value. Assets held for trading are all those
assets acquired for sale or repurchase in the short term. Derivatives, separated or
otherwise, are classified as financial instruments held for trading, unless they are
designated as effective hedging instruments. Financial assets with cash flows that are not
represented solely by principal and interest payments are classified and measured at fair
value through profit or loss, regardless of the business model. Financial instruments at fair
value with changes recognised in the income statement are recognised in the statement of
financial position at fair value and net changes in fair value are recognised in the income
statement.
This category includes derivative instruments.
The Group does not hold financial assets at fair value recognised in other comprehensive
income with reclassification of cumulative gains and losses or financial assets recognised
in other comprehensive income without reversal of cumulative gains and losses upon
derecognition.
Derecognition
A financial asset (or, if applicable, part of a financial asset or part of a group of similar
financial assets) is firstly written off (e.g. removed from the statement of financial position
of the Group) when:
the rights to receive cash flows from the asset are extinguished, or
the Group transferred to a third party the right to receive financial flows from the asset
or has taken on the contractual obligation to pay them fully and without delay and (a)
transferred substantially all the risks and benefits of the ownership of the financial asset
or (b) did not substantially transfer or retain all the risks and benefits of the asset, but
transferred their control.
If the Group has transferred the rights to receive cash flows from an asset or has signed an
agreement on the basis of which it retains the contractual rights to receive the cash flows
of the financial asset, but assumes a contractual obligation to pay the cash flows to one or
more beneficiaries (pass-through), it considers whether or to what extent it has retained
the risks and benefits concerning the ownership. If it has not substantially transferred or
retained all the risks and benefits or has not lost control over it, the asset continued to be
recognised in the financial statements of the Group to the extent of its residual involvement
in the asset itself. In this case, the Group also recognises an associated liability. The
transferred asset and the associated liability are measured in such a way as to reflect the
rights and obligations that pertain to the Group. When the residual involvement of the
entity is a guarantee in the transferred asset, the involvement is measured based on the
Sabaf Group | Consolidated financial statements at 31 December 2021
31
amount of the asset or the maximum amount of the consideration received that the entity
could be obliged to pay, whichever lower.
Provisions for risks and charges
Provisions for risks and charges are provisioned to cover losses and debts, the existence
of which is certain or probable, but whose amount or date of occurrence cannot be
determined at the end of the year. Provisions are stated in the statement of financial
position only when a legal or implicit obligation exists that determines the use of resources
with an impact on profit and loss to meet that obligation and the amount can be reliably
estimated. If the effect is significant, the provisions are calculated by updating future cash
flows estimated at a rate including taxes such as to reflect current market valuations of the
current value of the cash and specific risks associated with the liability.
Post-employment benefit
The post-employment benefit is provisioned to cover the entire liability accruing vis-à-vis
employees in compliance with current legislation and with national and supplementary
company collective labour contracts. This liability is subject to revaluation via application
of indices fixed by current regulations. Up to 31 December 2006, post-employment
benefits were considered defined-benefit plans and accounted for in compliance with IAS
19, using the projected unit-credit method. The regulations of this fund were amended by
Law no. 296 of 27 December 2006 and subsequent Decrees and Regulations issued during
the first months of 2007. In the light of these changes, and, in particular, for companies
with at least 50 employees, post-employment benefits must now be considered a defined-
benefit plan only for the portions accruing before 1 January 2007 (and not yet paid as at
the end of the reporting period). Conversely, portions accruing after that date are treated
as defined-contribution plans. Actuarial gains or losses are recognised immediately under
"Other total profits/(losses)".
Trade payables and other financial liabilities
Initial recognition
All financial liabilities are initially recognised at fair value, in addition to directly
attributable transaction costs in case of mortgages, loans and payables.
The Company's financial liabilities include trade payables and other payables, mortgages
and loans, including current account overdrafts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value with changes recognised in the income statement include
liabilities held for trading and financial liabilities initially recognised at fair value, with
changes recognised in the income statement. Liabilities held for trading are those
liabilities acquired in order to discharge or transfer them in the short term. This category
also includes derivative financial instruments subscribed by the Company and not
designated as hedging instruments in a hedging relationship pursuant to IFRS 9.
Embedded derivatives, separated from the main contract, are classified as financial
instruments held for trading, unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the income statement.
Sabaf Group | Consolidated financial statements at 31 December 2021
32
Financial liabilities are designated at fair value with changes recognised in the income
statement from the date of initial recognition, only if the criteria of IFRS 9 are met.
Loans and payables
This is the most important category for the Company and includes interest-bearing
payables and loans. After initial statement, loans are valued using the amortised cost
approach, applying the effective interest rate method. Gains and losses are recognised in
the income statement when the liability is discharged, as well as through the amortisation
process. Amortised cost is calculated by recognising the discount or premium on the
acquisition and the fees or costs that are an integral part of the effective interest rate.
Amortisation at the effective interest rate is included in financial expenses in the income
statement.
Derecognition
A financial liability is derecognised when the obligation underlying the liability is
discharged, cancelled or fulfilled. If an existing financial liability is replaced by another
from the same lender, at substantially different conditions, or if the conditions of an
existing liability are substantially changed, this replacement or change is treated as a
derecognition of the original liability accompanied by the recognition of a new liability,
with any differences between the carrying values recognised in the income statement.
Policy for conversion of foreign currency items
Receivables and payables originally expressed in foreign currencies are converted into
euro at the exchange rates in force on the date of the transactions originating them. Forex
differences realised upon collection of receivables and payment of payables in foreign
currency are posted in the income statement. Income and costs relating to foreign-
currency transactions are converted at the rate in force on the transaction date.
At year-end, assets and liabilities expressed in foreign currencies, with the exception of
non-current items, are posted at the spot exchange rate in force at the end of the reporting
period and related foreign exchange gains and losses are posted in the income statement.
If conversion generates a net gain, this value constitutes a non-distributable reserve until
it is effectively realised.
Derivative instruments and hedge accounting
The Group’s business is exposed to financial risks relating to changes in exchange rates,
commodity prices and interest rates. The company uses derivative instruments (mainly
forward contracts on currencies and commodity options) to hedge risks stemming from
changes in foreign currencies relating to irrevocable commitments or to planned future
transactions.
Derivatives are initially recognised at cost and are then adjusted to fair value on
subsequent closing dates.
Changes in the fair value of derivatives designated and recognised as effective for hedging
future cash flows relating to the Group’s contractual commitments and planned
transactions are recognised directly in shareholders' equity, while the ineffective portion
is immediately posted in the income statement. If the contractual commitments or planned
transactions materialise in the recognition of assets or liabilities, when such assets or
liabilities are recognised, the gains or losses on the derivative that were directly recognised
in equity are factored back into the initial valuation of the cost of acquisition or carrying
Sabaf Group | Consolidated financial statements at 31 December 2021
33
value of the asset or liability. For cash flow hedges that do not lead to recognition of assets
or liabilities, the amounts that were directly recognised in equity are included in the income
statement in the same period when the contractual commitment or planned transaction
hedged impacts profit and loss – for example, when a planned sale actually takes place.
For effective hedges of exposure to changes in fair value, the item hedged is adjusted for
the changes in fair value attributable to the risk hedged and recognised in the income
statement. Gains and losses stemming from the derivative’s valuation are also posted in
the income statement.
Changes in the fair value of derivatives not designated as hedging instruments are
recognised in the income statement in the period when they occur.
Hedge accounting is discontinued when the hedging instrument expires, is sold or is
exercised, or when it no longer qualifies as a hedge. At this time, the cumulative gains or
losses of the hedging instrument recognised in equity are kept in the latter until the planned
transaction actually takes place. If the transaction hedged is not expected to take place,
cumulative gains or losses recognised directly in equity are transferred to the year’s
income statement.
Embedded derivatives included in other financial instruments or contracts are treated as
separate derivatives when their risks and characteristics are not strictly related to those of
their host contracts and the latter are not measured at fair value with posting of related
gains and losses in the income statement.
Revenue from contracts with customers
The Group is engaged in the supply of components for household appliances (mainly gas
parts, such as valves and burners, hinges and electronic components).
Revenue from contracts with customers is recognised when control of the goods is
transferred to the customer for an amount that reflects the consideration that the Group
expects to receive in exchange for the goods. The control of the goods passes to the
customer according to the terms of return defined with the customer. The usual extended
payment terms range from 30 to 120 days from shipment; the Group believes that the price
does not include significant financing components.
The guarantees provided for in the contracts with customers are of a general nature and
not extended and are accounted for in accordance with IAS 37.
Financial income
Finance income includes interest receivable on funds invested and income from financial
instruments, when not offset as part of hedging transactions. Interest income is recognised
in the income statement at the time of vesting, taking effective output into consideration.
Financial expenses
Financial expenses include interest payable on financial debt calculated using the effective
interest method and bank expenses. All the other financial expenses are recognised as
costs for the year in which they are incurred.
Income taxes for the year
Income taxes include all taxes calculated on the Group’s taxable income. Income taxes
are directly recognised in the income statement, with the exception of those concerning
items directly debited or credited to shareholders’ equity, in which case the tax effect is
recognised directly in shareholders’ equity. Other taxes not relating to income, such as
Sabaf Group | Consolidated financial statements at 31 December 2021
34
property taxes, are included among operating expenses. Deferred taxes are provisioned in
accordance with the global liability provisioning method. They are calculated on all
temporary differences emerging between the taxable base of an asset and liability and its
book value in the consolidated financial statements, with the exception of goodwill that is
not tax-deductible and of differences stemming from investments in subsidiaries for which
cancellation is not envisaged in the foreseeable future. Deferred tax assets on unused tax
losses and tax credits carried forward are recognised to the extent that it is probable that
future taxable income will be available against which they can be recovered. Current and
deferred tax assets and liabilities are offset when income taxes are levied by the same tax
authority and when there is a legal right to settle on a net basis. Deferred tax assets and
liabilities are measured using the tax rates that are expected to be applicable, according to
the respective regulations of the countries where the Group operates, in the years when
temporary differences will be realised or settled.
Dividends
Dividends are posted on an accrual basis when the right to receive them materialises, i.e.
when shareholders approve dividend distribution.
Treasury shares
Treasury shares are booked as a reduction of shareholders’ equity. The carrying value of
treasury shares and revenues from any subsequent sales are recognised in the form of
changes in shareholders’ equity.
Equity-settled transactions
Some Group employees receive part of the remuneration in the form of share-based
payments, therefore employees provide services in exchange for shares ("equity-settled
transactions"). The cost of equity-settled transactions is determined by the fair value at the
date on which the assignment is made using an appropriate measurement method, as
explained in more detail in Note 38.
This cost, together with the corresponding increase in shareholders' equity, is recognised
under personnel costs (Note 27) over the period in which the conditions relating to the
achievement of objectives and/or the provision of the service are met. The cumulative
costs recognised for such transactions at the end of each reporting period up to the vesting
date are commensurate with the expiry of the vesting period and the best estimate of the
number of equity instruments that will actually vest.
Service or performance conditions are not taken into account when defining the fair value
of the plan at the assignment date. However, the probability of these conditions being met
is taken into account when defining the best estimate of the number of equity instruments
that will vest. Market conditions are reflected in the fair value at the assignment date. Any
other condition related to the plan that does not involve a service obligation is not
considered to be a vesting condition. Non-vesting conditions are reflected in the fair value
of the plan and result in the immediate recognition of the cost of the plan, unless there are
also service or performance conditions.
No cost is recognised for rights that do not vest in that the performance and/or service
conditions are not met. When the rights include a market condition or a non-vesting
condition, these are treated as if they had vested regardless of whether the market
conditions or other non-vesting conditions to which they are subject are met or not, it
being understood that all other performance and/or service conditions must be met.
Sabaf Group | Consolidated financial statements at 31 December 2021
35
If the conditions of the plan are changed, the minimum cost to be recognised is the fair
value at the assignment date in the absence of the change in the plan itself, on the
assumption that the original conditions of the plan are met. Moreover, a cost is recognised
for each change that results in an increase in total fair value of the payment plan, or that
is in any case favourable for employees; this cost is measured with reference to the date
of change. When a plan is cancelled, any remaining element of the plan's fair value is
immediately expensed to the income statement.
Earnings per share
Basic EPS is calculated by dividing the profit or loss attributable to the direct parent
company’s shareholders by the weighted average number of ordinary shares outstanding
during the year. Diluted EPS is calculated by dividing the profit or loss attributable to the
direct parent company’s shareholders by the weighted average number of shares
outstanding, adjusted to take into account the effects of all potential ordinary shares with
a dilutive effect.
Use of estimates
Preparation of the financial statements and notes in accordance with IFRS requires
management to make estimates and assumptions that affect the carrying values of assets
and liabilities and the disclosures on contingent assets and liabilities as of the end of the
reporting period. Actual results might differ from these estimates. Estimates are used to
measure tangible and intangible assets subject to impairment testing, as described earlier,
as well as to measure provisions for bad debts, for inventory obsolescence, depreciation
and amortisation, asset write-downs, employee benefits, taxes, and other provisions.
Specifically:
Recoverable amount of tangible and intangible assets
The procedure for determining impairment losses of tangible and intangible assets
described in “Impairment” implies – in estimating the value of use – the use of the Business
Plans of investees, which are based on a series of assumptions relating to future events
and actions of the investees’ management bodies, which may not necessarily come about.
In estimating market value, however, assumptions are made on the expected trend in
trading between third parties based on historical trends, which may not actually be
repeated.
Provisions for bad debts
Receivables are adjusted by the related bad debt provision to take into account their
recoverable amount. To determine the size of the write-downs, management must make
subjective assessments based on the documentation and information available regarding,
among other things, the customer’s solvency, as well as experience and historical payment
trends.
Provisions for inventory obsolescence
Inventories subject to obsolescence and slow turnover are systematically valued, and
written down if their recoverable amount is less than their carrying value. Write-downs are
calculated based on management assumptions and estimates, resulting from experience
and historical results.
Sabaf Group | Consolidated financial statements at 31 December 2021
36
Employee benefits
The current value of liabilities for employee benefits depends on a series of factors
determined using actuarial techniques based on certain assumptions. Assumptions
concern the discount rate, estimates of future salary increases, and mortality and
resignation rates. Any change in the above-mentioned assumptions might have significant
effects on liabilities for pension benefits.
Share-based payments
Estimating the fair value of share-based payments requires the determination of the most
appropriate valuation model, which depends on the terms and conditions under which
these instruments are granted. This also requires the identification of data to feed into the
valuation model, including assumptions about the exercise period of the options, volatility
and dividend yield. The Group uses a binomial model for the initial measurement of the
fair value of share-based payments with employees.
Income taxes
The Group is subject to different bodies of tax legislation on income. Determining liabilities
for Group taxes requires the use of management valuations in relation to transactions
whose tax implications are not certain at the end of the reporting period. Furthermore, the
valuation of deferred taxes is based on income expectations for future years; the valuation
of expected income depends on factors that might change over time and have a significant
effect on the valuation of deferred tax assets.
Other provisions
When estimating the risk of potential liabilities from disputes, the Directors rely on
communications regarding the status of recovery procedures and disputes from the
lawyers who represent the Group in litigation. These estimates are determined taking into
account the gradual development of the disputes, considering existing exemptions.
Climate change
With reference to the potential impact of climate change and energy transition on the
Group's activities, the Management carries out targeted analyses to identify and manage
the main risks and uncertainties to which the Group is exposed, adapting the corporate
strategy accordingly. To date, these factors have not had a significant impact on the
judgements and estimates used in preparing these Consolidated Financial Statements.
COVID-19 pandemic
Management has reviewed the Group's exposure to the effects of the COVID-19 pandemic
and its impact on the Group's financial position, results and cash flows, especially with
regard to the recoverability of the value of intangible assets, the measurement of
receivables, the measurement of inventories and the management of financial risks, with
a special reference to credit and liquidity risks. The analysis carried out did not reveal any
critical situations and the factors related to the COVID-19 pandemic did not have a
significant impact on the judgements and estimates used in preparing these Consolidated
Financial Statements.
Estimates and assumptions are regularly reviewed and the effects of each change
immediately reflected in the income statement.
Sabaf Group | Consolidated financial statements at 31 December 2021
37
New accounting standards
Amendments to IFRS 4, IFRS 7, IFRS 9, IFRS 16 and IAS 39:
Interest rate
benchmark reform
The Financial Stability Board released the report "Reforming Major Interest Rate
Benchmarks" with recommendations to strengthen existing benchmark indexes, other
potential interbank market-based benchmark rates and develop alternative near-risk-free
benchmark rates. The European Parliament introduced a common framework to ensure
the accuracy and integrity of these indexes.
Following this Regulation, the IASB published the Reform of benchmark indexes for
determining interest rates in order to take into account the consequences of the reform on
financial reporting and so that companies can continue to comply with the provisions
assuming that the existing benchmark indexes are not changed as a result of the reform of
interbank rates.
The amendments to the principles outlined provide a number of expedients, applicable to
all hedging relationships directly affected by the interest rate benchmark reform, i.e., if the
reform generates uncertainties about the timing and/or amount of cash flows based on
benchmarks of the hedged item or hedging instrument. These changes had no impact on
the Group’s consolidated financial statements.
Amendment to IFRS16: Covid-19-Related Rent Concessions beyond 30 June 2021
On 31 March 2021, the IASB issued the document
"Covid-19-Related Rent Concessions
beyond 30 June 2021 (Amendments to IFRS 16)"
by which it extends by one year the
period of application of the amendment to IFRS 16, issued in 2020, relating to the
accounting for facilities granted to lessees due to Covid-19. These changes that apply as
from 1 April 2021 had no impact on the Group’s consolidated financial statements.
IFRS and IFRIC accounting standard, amendments approved by the European
Union, not yet universally applicable and not adopted early by the Group at 31
December 2021
IFRS 17 “Insurance Contracts
”
In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS 17), a comprehensive
new standard on insurance contracts covering recognition and measurement, presentation
and disclosure. The overall objective of IFRS 17 is to present an accounting model for
insurance contracts that is more useful and consistent for insurers. This principle does not
apply to the Group.
Amendments to IAS 1
“
Classification of Liabilities as Current or Non-current
”
In January 2020, the IAS issued amendments to paragraphs 69-76 of IAS 1 to specify the
requirements for classifying liabilities as current or non-current. The amendments clarify
what is meant by the right to postpone an expiry, that the right to postpone must exist at
the end of the reporting period, that the classification is not affected by the likelihood that
the entity will exercise its right to postpone, that only if a derivative embedded in a
convertible liability is itself an equity instrument does the maturity of the liability have no
impact on classification. The amendments will be effective for financial years beginning
Sabaf Group | Consolidated financial statements at 31 December 2021
38
on or after 1 January 2023 and must be applied retrospectively. The Group is assessing
the impact the changes will have on the current situation.
Amendments to IFRS 3
“
Business Combinations
”
The amendments are intended to update a reference in IFRS 3 to the previous version of
the IASB's Conceptual Framework (1989 Framework) without affecting the requirements
of the standard.
Amendments to IAS 16
“
Property, Plant and Equipment
”
The purpose of the amendments is not to allow the deduction from the cost of property,
plant and equipment of the amount received from the sale of goods produced in the test
phase of the asset. These sales revenues and related production costs will therefore be
recognised in the income statement.
Amendments to IAS 37
“
Provisions, Contingent Liabilities and Contingent
Assets
”
The amendment clarifies that all costs directly attributable to the contract must be taken
into account when estimating the possible onerousness of a contract. Accordingly, the
assessment of whether a contract is onerous includes not only incremental costs (such as
the cost of direct material used in processing), but also all costs that the enterprise cannot
avoid because it has entered into the contract (such as, for example, the share of
depreciation of machinery used for the performance of the contract).
Amendments to
“
Annual Improvements 2018-2020
”
The amendments include amendments to the following principles:
▪ IFRS 1
“First-time Adoption of International Financial Reporting Standards –
Subsidiary as a first-time adopter”:
the amendment allows a subsidiary that chooses
to apply paragraph D16(a) of IFRS 1 to account for cumulative translation
differences on the basis of the amounts recognised by the parent company, taking
into account the parent's date of transition to IFRSs;
▪ IFRS 9 “
Financial Instruments”
: the amendments clarify what fees can be included
in measuring whether the terms of a new financial liability (or changes to an existing
financial liability) are materially different from the terms of the original financial
liability;
▪ IAS 41
“Agriculture”
: the amendment removes the requirement to exclude cash
flows arising from taxation when measuring the fair value of assets within the scope
of IAS 41;
▪ IFRS 16
“Leases”
: amendments to illustrative example no. 13.
All amendments will enter into force on 1 January 2022. Following the adoption of these
amendments, the directors do not expect a significant effect on the Group's consolidated
financial statements.
Sabaf Group | Consolidated financial statements at 31 December 2021
39
Comments on significant balance sheet items
1. PROPERTY, PLANT AND EQUIPMENT
Property
Plant and
equipment
Other
assets
Assets under
construction
Total
Cost
At 31 December 2019
56,074
215,631
53,428
3,164
328,297
Increases
1,591
7,658
4,190
4,508
17,947
Disposals
-
(1,451)
(218)
-
(1,669)
Change in the scope of
consolidation
1,575
-
4
-
1,579
Reclassifications
(518)
1,709
277
(2,834)
(1,366)
Forex differences
(1,496)
(3,955)
(1,804)
(303)
(7,558)
At 31 December 2020
57,226
219,592
55,877
4,535
337,230
Increases
1,589
11,097
4,421
5,120
22,227
Disposals
(48)
(1,366)
(398)
(596)
(2,408)
Change in the scope of
consolidation
942
83
-
1,531
2,556
Reclassifications
375
2,092
18
(3,480)
(995)
Forex differences
(654)
(3,201)
(1,089)
(474)
(5,418)
At 31 December 2021
59,430
228,297
58,829
6,636
353,192
Accumulated
depreciations
At 31 December 2019
22,779
183,664
45,969
-
252,412
Depreciations for the year
2,321
8,696
2,909
-
13,926
Disposals
-
(1,422)
(81)
-
(1,503)
Reclassifications
(530)
184
(43)
-
(389)
Forex differences
(423)
(2,184)
(1,116)
-
(3,723)
At 31 December 2020
24,147
188,938
47,638
-
260,723
Depreciations for the year
2,367
8,457
3,290
-
14,114
Disposals
(14)
(1,462)
(319)
-
(1,795)
Reclassifications
-
(116)
3
-
(113)
Forex differences
(297)
(1,287)
(560)
-
(2,144)
At 31 December 2021
26,203
194,530
50,052
-
270,785
Net carrying value
At 31 December 2021
33,227
33,767
8,777
6,636
82,407
At 31 December 2020
33,079
30,654
8,239
4,535
76,507
The breakdown of the net carrying value of Property was as follows:
31/12/2021
31/12/2020
Change
Land
8,613
7,675
938
Industrial buildings
24,614
25,404
(790)
Total
33,227
33,079
148
Changes in property, plant and equipment resulting from the application of IFRS 16 are
shown below:
Sabaf Group | Consolidated financial statements at 31 December 2021
40
Property
Plant and
equipment
Other assets
Total
1 January 2021
2,447
340
826
3,613
Increases
414
104
681
1,199
Depreciations
(595)
(241)
(575)
(1,411)
Decreases
(47)
-
-
(47)
Foreign exchange differences
2
-
-
2
At 31 December 2021
2,221
203
932
3,356
The main investments of the financial year were allocated to:
▪ the increase in the production capacity of the Electronics Division, for which
production started in a new plant in Manisa (Turkey);
▪ the increase in the production capacity of burners at the plants in Brazil and Turkey,
also to support the increase in supplies under recent agreements with some
strategic customers;
▪ the start of works for the construction of a new production site in San Luis de Potosi
(Mexico), where the Group intends to start production by the end of 2022.
Decreases mainly relate to the disposal of machinery no longer in use.
Assets under construction include machinery under construction and advance payments
to suppliers of capital equipment.
At 31 December 2021, the Group found no endogenous or exogenous indicators of
impairment of its property, plant and equipment. As a result, the value of property, plant
and equipment was not submitted to impairment testing.
2. INVESTMENT PROPERTY
Cost
At 31 December 2019
11,836
Increases
-
Disposals
(552)
At 31 December 2020
11,284
Increases
-
Disposals
(1,107)
At 31 December 2021
10,177
Depreciations and write-downs
At 31 December 2019
7,860
Depreciations for the year
416
Write-downs for the year
-
Derecognition due to disposal
(245)
At 31 December 2020
8,031
Depreciations for the year
369
Write-downs for the year
-
Derecognition due to disposal
(534)
At 31 December 2021
7,866
Net carrying value
At 31 December 2021
2,311
At 31 December 2020
3,253
Sabaf Group | Consolidated financial statements at 31 December 2021
41
Changes in investment property resulting from the application of IFRS 16 are shown
below:
Investment
property
1 January 2021
38
Increases
-
Decreases
(35)
Depreciations
-
Foreign exchange differences
-
At 31 December 2021
3
The item Investment property includes non-operating buildings owned by the Group:
these are mainly properties for residential use, held for rental or sale. Disposals during the
period resulted in capital gains totalling €109 thousand.
At 31 December 2021, the Group found no other endogenous or exogenous indicators of
impairment of its investment property. As a result, the value of investment property was
not submitted to impairment testing.
Sabaf Group | Consolidated financial statements at 31 December 2021
42
3. INTANGIBLE ASSETS
Goodwill
Patents
and
software
Development
costs
Other
intangible
assets
Total
Cost
At 31 December 2019
31,615
8,962
6,728
24,959
72,264
Increases
-
547
465
85
1,097
Decreases
-
1
-
(1)
-
Change in the scope of consolidation
-
1
-
-
1
Reclassifications
-
33
(607)
(786)
(1,360)
Forex differences
(4,501)
(143)
-
(2,658)
(7,302)
At 31 December 2020
27,114
9,401
6,586
21,599
64,700
Increases
-
420
1,770
44
2,234
Decreases
-
(2)
-
(3)
(5)
Reclassifications
-
(70)
(58)
-
(128)
Forex differences
(4,978)
(164)
-
(2,939)
(8,081)
At 31 December 2021
22,136
9,585
8,298
18,701
58,720
Amortisation/Write-downs
At 31 December 2019
4,546
8,179
4,338
3,533
20,596
Amortisation for the year
-
480
431
1,723
2,634
Decreases
-
-
-
-
-
Change in the scope of consolidation
-
-
-
-
-
Reclassifications
-
(18)
(344)
(781)
(1,143)
Forex differences
-
(68)
-
(336)
(404)
At 31 December 2020
4,546
8,573
4,425
4,139
21,683
Amortisation for the year
-
419
375
1,553
2,347
Decreases
-
-
-
-
-
Change in the scope of consolidation
-
-
-
-
-
Reclassifications
-
(93)
-
-
(93)
Forex differences
-
(112)
-
(658)
(770)
At 31 December 2021
4,546
8,787
4,800
5,034
23,167
Net carrying value
At 31 December 2021
17,590
798
3,498
13,667
35,553
At 31 December 2020
22,568
828
2,161
17,460
43,017
Goodwill
Goodwill recognised at 31 December 2021 is allocated:
- to the “Hinges” (CGU) cash generating units of €4.414 million;
- to the “Professional burners” CGU of €1.770 million;
- to the “Electronic components” CGU of €7.726 million;
- to the “C.M.I. hinges” CGU of €3.680 million.
The Group verifies the ability to recover goodwill at least once a year or more frequently
if there are indications of impairment. Recoverable amount is determined through value of
use, by discounting expected cash flows.
The management defined a single plan for each CGU (approved by the Board of Directors)
that represents the normal and expected scenario, with reference to the period from 2022
to 2026, and which was used to develop the impairment tests. The development of forward
plans and the calculation of the value in use were carried out following an in-depth analysis
that also considered the impact on profitability of the increase in purchase costs and the
possibility of transferring this increase to sales prices. The recoverable amount of each
Sabaf Group | Consolidated financial statements at 31 December 2021
43
CGU, determined on the basis of this plan, was subjected to stress tests and sensitivity
analyses that also took into account economic parameters and as a result of which positive
results emerged.
Goodwill allocated to the Hinges CGU
In 2021, the Hinges CGU achieved positive results - in terms of sales and profitability -
both compared to the previous year and compared to the budget. The 2022-2026 forward
plan envisages a further increase in sales at moderate growth rates.
At 31 December 2021, the Group tested - with the support of independent experts - the
carrying value of its CGU Hinges for impairment, determining its recoverable amount,
considered to be equivalent to its usable value, by discounting expected future cash flow
in the forward plan drafted by the management. Cash flows for the period from 2022 to
2026 were augmented by the terminal value, which expresses the operating flows that the
CGU is expected to generate from the sixth year to infinity and determined based on the
perpetual income. The value of use was calculated based on a discount rate (wacc) of
10.11% (8.62% in the impairment test carried out while preparing the consolidated
financial statements at 31 December 2020) and a growth rate (g) of 2%, unchanged from
the 2020 impairment test.
The recoverable amount calculated on the basis of the above-mentioned assumptions and
valuation techniques is €15.497 million, compared with a carrying value of the assets
allocated to the Hinges unit of €14.294 million; consequently, the value recognised for
goodwill at 31 December 2021 was deemed recoverable.
Sensitivity analysis
The table below shows the changes in recoverable amount depending on changes in the
WACC discount rate and growth factor g:
(
€
/000)
growth rate
discount rate
1.50%
1.75%
2.00%
2.25%
2.50%
9.11%
16,750
17,163
17,605
18,079
18,590
9.61%
15,746
16,102
16,482
16,888
17,322
10.11%
14,858
15,168
15,497
15,847
16,220
10.61%
14,068
14,339
14,626
14,931
15,254
11.11%
13,359
13,598
13,851
14,117
14,400
The table below shows the change in recoverable amount as EBITDA changes according
to the plan.
EBITDA
Accordin
g to the
plan
-10%
-20%
(
€
/000)
15,497
13,567
11,638
It was found that under most of the assumptions presented above, which consider changes
in the discount rate, growth rate and EBITDA, the recoverable amount of the CGU is higher
than its carrying value.
Sabaf Group | Consolidated financial statements at 31 December 2021
44
Goodwill allocated to the Professional burners CGU
The Professional Burners CGU performed well during the 2021 financial year in terms of
both turnover and profitability. The 2022-2026 forward plan envisages a further increase
in sales at moderate growth rates and almost stable margins. At 31 December 2021, the
Group tested - with the support of independent experts - the carrying value of its
Professional burners CGU for impairment, determining its recoverable amount, considered
to be equivalent to its usable value, by discounting expected future cash flow in the forward
plan drafted at the beginning of 2022. Cash flows for the period from 2022 to 2026 were
augmented by the so-called terminal value, which expresses the operating flows that the
CGU is expected to generate from the sixth year to infinity and determined based on the
perpetual income. The value of use was calculated based on a discount rate (wacc) of
6.93% (6.76% in the impairment test carried out while preparing the consolidated financial
statements at 31 December 2020) and a growth rate (g) of 2%, unchanged with respect to
the 2020 impairment test, considered by management to be the best estimate of the CGU's
growth assumptions, considering the sector in which it operates and in line with the growth
rate of other Italian CGUs.
The recoverable amount calculated on the basis of the above-mentioned assumptions and
valuation techniques is €19.071 million, compared with a carrying value of the assets
allocated to the Professional burners unit of €5.131 million (including minority interests);
consequently, the value recognised for goodwill at 31 December 2021 was deemed
recoverable.
Sensitivity analysis
The table below shows the changes in recoverable amount depending on changes in the
WACC discount rate and growth factor g:
(
€
/000)
growth rate
discount rate
1.50%
1.75%
2.00%
2.25%
2.50%
5.93%
21,726
22,879
24,179
25,655
27,347
6.43%
19,417
20,325
21,336
22,467
23,743
6.93%
17,535
18,266
19,071
19,962
20,954
7.43%
15,972
16,571
17,226
17,943
18,734
7.93%
14,654
15,152
15,693
16,281
16,923
The table below shows the change in recoverable amount as EBITDA changes according
to the plan.
EBITDA
Accordin
g to the
plan
-10%
-20%
(
€
/000)
19,071
16,634
14,197
Goodwill allocated to the Electronic components CGU
The Electronic Components CGU performed extremely well in 2021.
Sabaf Group | Consolidated financial statements at 31 December 2021
45
At 31 December 2021, the Group tested - with the support of independent experts - the
carrying value of its CGU Electronic components for impairment, determining its
recoverable amount, considered to be equivalent to its usable value, by discounting
expected future cash flow in the forward plan drafted by the management. Cash flows for
the period from 2022 to 2026 were augmented by the terminal value, which expresses the
operating flows that the CGU is expected to generate from the fifth year to infinity and
determined based on the perpetual income. The value of use was calculated based on a
discount rate (wacc) of 15.21% (14.18% in the impairment test carried out while preparing
the consolidated financial statements at 31 December 2020) and a growth rate (g) of 2.50%,
unchanged from the 2020 impairment test.
The recoverable amount calculated on the basis of the above-mentioned assumptions and
valuation techniques is €51.556 million, compared with a carrying value of the assets
allocated to the Electronic components unit of €18.705 million; consequently, the value
recognised for goodwill at 31 December 2021 was deemed recoverable.
Sensitivity analysis
The table below shows the changes in recoverable amount depending on changes in the
WACC discount rate and growth factor g:
(
€
/000)
growth rate
discount rate
2.00%
2.25%
2.50%
2.75%
3.00%
14.21%
54,611
55,388
56,198
57,043
57,925
14.71%
52,345
53,049
53,781
54,544
55,340
15.21%
50,252
50,892
51,556
52,248
52,968
15.71%
48,314
48,897
49,502
50,131
50,784
16.21%
46,513
47,047
47,599
48,173
48,768
The table below shows the change in recoverable amount as EBITDA changes according
to the plan.
EBITDA
Accordin
g to the
plan
-10%
-20%
(
€
/000)
51,556
45,676
39,796
Goodwill allocated to the C.M.I. Hinges CGU
The Hinges C.M.I. CGU recognised a strong increase in turnover in 2021 compared to the
previous year. The positive trend is expected to continue for the period from 2022 to 2026,
which forecasts further sales at moderate growth rates.
At 31 December 2021, the Group tested - with the support of independent experts - the
carrying value of its CGU Hinges C.M.I. for impairment, determining its recoverable
amount, considered to be equivalent to its usable value, by discounting expected future
cash flow in the forward plan drafted by the management. Cash flows for the period from
2022 to 2026 were augmented by the terminal value, which expresses the operating flows
that the CGU is expected to generate from the third year to infinity and determined based
on the perpetual income. The value of use was calculated based on a discount rate (wacc)
Sabaf Group | Consolidated financial statements at 31 December 2021
46
of 11.31% (9.87% in the impairment test carried out while preparing the consolidated
financial statements at 31 December 2020) and a growth rate (g) of 2%, unchanged with
respect to the 2020 impairment test, considered by management to be the best estimate
of the CGU's growth assumptions, considering the sector in which it operates and in line
with the growth rate of other Italian CGUs.
The recoverable amount calculated on the basis of the above-mentioned assumptions and
valuation techniques is €57.700 million, compared with a carrying value of the assets
allocated to the C.M.I. Hinges unit of €29.313 million; consequently, the value recognised
for goodwill at 31 December 2021 was deemed recoverable.
Sensitivity analysis
The table below shows the changes in recoverable amount depending on changes in the
WACC discount rate and growth factor g:
(
€
/000)
growth rate
discount rate
1.50%
1.75%
2.00%
2.25%
2.50%
10.31%
62,424
63,900
65,465
67,128
68,896
10.81%
58,694
59,990
61,387
62,810
64,347
11.31%
55,349
56,494
57,700
58,974
60,319
11.81%
52,333
53,350
54,419
55,544
56,729
12.31%
49,600
50,508
51,460
52,459
53,509
The table below shows the change in recoverable amount as EBITDA changes according
to the plan.
EBITDA
Accordin
g to the
plan
-10%
-20%
(
€
/000)
57,700
52,378
43,693
Patents and software
Software investments are related to the extension of the application and corporate scope
of the Group management system (SAP).
Development costs
In 2021, the Sabaf Group set up a dedicated team to develop new solutions for home
cooking, with the aim of creating innovative products that meet manufacturers' needs and
new consumer trends. This is a strategically important innovation that allows Sabaf to
enter a fast-growing segment.
Development activities continued in the Gas Components, Hinges and Electronics
divisions, which are described in the Report on Operations.
Increases in development costs include projects in progress and therefore not subject to
amortisation.
With regard to patents, software and development costs, no internal and external
indicators that would necessitate an impairment test were identified.
Sabaf Group | Consolidated financial statements at 31 December 2021
47
Other intangible assets
The other intangible assets recognised in these consolidated financial statements mainly
derive from the Purchase Price Allocation carried out following the acquisition of Okida
Elektronik in September 2018, and of C.M.I. S.r.l., in July 2019.
The net carrying value of other intangible assets is broken down as follows:
31/12/2021
31/12/2020
Change
Customer Relationship
6,301
8,775
(2,474)
Brand
3,877
4,459
(582)
Know-how
236
503
(267)
Patents
3,038
3,498
(460)
Other
215
225
(10)
Total
13,667
17,460
(3,793)
At 31 December 2021, the recoverability of the amount of other intangible assets was
verified as part of the impairment test of the related goodwill described in the previous
paragraph.
4. EQUITY INVESTMENTS
31/12/2021
31/12/2020
Changes
Handan ARC Burners Co.
-
89
(89)
Other equity investments
83
84
(1)
Total
83
173
(90)
The investment in Handan A.R.C. Burners Co. Ltd., held through A.R.C. s.r.l. and
previously measured using the equity method, is related to a Chinese joint venture set up
with the aim to produce and market in China burners for professional cooking. During
2021, the Group's share increased from 35.7% to 51%, following the acquisition of an
additional 30% of the share capital of A.R.C., therefore as from this financial year Handan
A.R.C. Burners Co. Ltd is consolidated on a line-by-line basis.
Internal and external indicators that would necessitate an impairment test on equity
investments were not identified.
5. NON-CURRENT RECEIVABLES
31/12/2021
31/12/2020
Change
Tax receivables
985
392
593
Guarantee deposits
115
112
3
Other
-
14
(14)
Total
1,100
518
582
Tax receivables relate to indirect taxes expected to be recovered after 31 December 2022.
Sabaf Group | Consolidated financial statements at 31 December 2021
48
6. INVENTORIES
31/12/2021
31/12/2020
Change
Raw Materials
26,771
16,859
9,912
Semi-processed goods
15,133
10,414
4,719
Finished products
25,646
15,056
10,590
Provision for inventory write-downs
(3,397)
(3,105)
(292)
Total
64,153
39,224
24,929
The value of final inventories at 31 December 2021 increased compared to the end of the
previous year to meet the higher volumes of activity. Moreover, in addition to the
inflationary effect of the significant increases in metal prices, the Group raised the level of
safety stocks to ensure continuity of production in a particularly turbulent scenario.
The provision for write-downs is mainly allocated for hedging the obsolescence risk. At
the end of the financial year, the appropriation is adjusted based on specific analyses
carried out on slow-moving and non-moving products. The following table shows the
changes in the Provision for inventory write-downs during the current financial year:
31/12/2020
3,105
Provisions
696
Utilisation
(223)
Forex differences
(181)
31/12/2021
3,397
7. TRADE RECEIVABLES
31/12/2021
31/12/2020
Change
Total trade receivables
69,139
64,525
4,614
Bad debt provision
(1,099)
(1,089)
(10)
Net total
68,040
63,436
4,604
Trade receivables at 31 December 2021 were higher than the balance at the end of 2020
subsequent to higher sales during the financial year. There were no significant changes in
the payment terms agreed with customers.
The amount of trade receivables recognised in the financial statements includes
approximately €24.3 million in insured receivables (€23.9 million at 31 December 2020).
Receivables assigned to factors without recourse (€8.398 thousand at 31 December 2021,
€9.204 thousand at 31 December 2020) are derecognised from the Statement of Financial
Position in that the reference contract provides for the assignment of ownership of the
receivables, together with ownership of the cash flows generated by the receivable, as well
as of all risks and benefits, to the assignee.
The breakdown of trade receivables by past due period is shown below:
Sabaf Group | Consolidated financial statements at 31 December 2021
49
31/12/2021
31/12/2020
Change
Current receivables (not past due)
60,358
58,143
2,215
Outstanding up to 30 days
4,132
3,278
854
Outstanding from 30 to 60 days
1,290
1,249
41
Outstanding from 60 to 90 days
794
438
356
Outstanding for more than 90 days
2,565
1,417
1,148
Total
69,139
64,525
4,614
The bad debt provision was adjusted to the better estimate of the credit risk and expected
losses at the end of the reporting period, also carried out by analysing each expired item.
Changes during the year were as follows:
31/12/2020
1,089
Provisions
100
Utilisation
(8)
Forex differences
(82)
31/12/2021
1,099
8. TAX RECEIVABLES
31/12/2021
31/12/2020
Change
For income tax
1,395
1,179
216
For VAT and other sales taxes
4,751
1,195
3,556
Other tax credits
19
45
(26)
Total
6,165
2,419
3,746
At 31 December 2021, income tax receivables include:
▪ €801 thousand relating to the tax credit for investments in capital goods referred
to in Law Decree 160/2019;
▪ €155 thousand relating to the tax credit for research and development referred to
in Law Decree 160/2019;
The increase in receivables for VAT and other sales taxes is related to the strong growth
in business volumes, which fully eroded the possibility of making tax-free purchases. The
Group believes it will be able to recover this receivable in the first months of 2022.
9. OTHER CURRENT RECEIVABLES
31/12/2021
31/12/2020
Change
Credits to be received from suppliers
1,267
669
598
Advances to suppliers
859
1,032
(173)
Accrued income and prepaid expenses
476
487
(11)
Other
534
979
(445)
Total
3,136
3,167
(31)
Credits to be received from suppliers mainly refer to bonuses paid to the Group for the
attainment of purchasing objectives, which were achieved in 2021 to a greater extent than
in the previous year.
Sabaf Group | Consolidated financial statements at 31 December 2021
50
10. FINANCIAL ASSETS
31/12/2021
31/12/2020
Current
Non-current
Current
Non-current
Restricted bank accounts
1,172
-
1,233
-
Currency derivatives
-
-
262
-
Total
1,172
0
1,495
0
At 31 December 2021, a term deposit of €1,172 thousand, due by 2022, for the portion of
the price not yet paid to the sellers of the C.M.I. equity investment and deposited as
collateral in accordance with the terms of the C.M.I. acquisition agreement (Note 15).
11. CASH AND CASH EQUIVALENTS
Cash and cash equivalents, which amounted to €43,649 thousand at 31 December 2021
(€13,318 thousand at 31 December 2020) consisted of bank current account balances of
€43.2 million (€12.8 million at 31 December 2020) and investments in liquidity of €432
thousand (€516 thousand at 31 December 2020). Changes in the cash and cash equivalents
are analysed in the statement cash flows.
12. SHARE CAPITAL
The parent company’s share capital consists of 11,533,450 shares with a par value of €1.00
each. The share capital paid in and subscribed did not change during the year.
At 31 December 2021, the structure of the share capital is shown in the table below.
No. of shares
% of share
capital
Rights and obligations
Ordinary shares
8,376,760
72.63%
-
Ordinary shares with
increased vote
3,156,690
27.37%
Two voting rights per share
TOTAL
11,533,450
100%
With the exception of the right to increased vote, there are no rights, privileges or
restrictions on the shares of the Parent Company. The availability of the Parent Company's
reserves is indicated in the separate financial statements of Sabaf S.p.A.
Sabaf Group | Consolidated financial statements at 31 December 2021
51
13. TREASURY SHARES AND OTHER RESERVES
Treasury shares
With regard to the 2018 - 2020 Stock Grant Plan, following the expiry of the three-year
vesting period, during the first half of 2021, 34,946 ordinary shares of Sabaf S.p.A. were
allocated and transferred to the beneficiaries of Cluster 1, through the use of shares already
available to the issuer.
No other transactions on treasury shares were carried out during the year.
At 31 December 2021, the Parent company is the lawful owner of 311,802 treasury shares
(2.703% of the share capital), reported in the financial statements as an adjustment to
shareholders’ equity at a weighted average unit value of €12.52 (the closing stock market
price of the Share at 31 December 2021 was €24.00). Further to what was reported in the
Interim Management Statement at 31 December 2021 published on 10 February 2022, it
is confirmed that Sabaf S.p.A. recovered the full availability of 311,802 treasury shares on
1 March 2022.
There were 11,221,648 outstanding shares at 31 December 2021 (11,186,702 at 31
December 2020).
Stock grant reserve
The item "Retained earnings, other reserves" of €86,089 thousand included, at 31
December 2021, the stock grant reserve of €1,701 thousand, which included the
measurement at 31 December 2021 of the fair value of rights assigned to receive shares of
the Parent Company relating to the following medium- and long-term incentive plans for
directors and employees of the Sabaf Group:
▪ 2018 - 2020 Stock Grant Plan, for rights related to Cluster 2 beneficiaries only;
▪ 2021 – 2023 Stock Grant Plan.
For details of the Stock Grant Plan, refer to Note 38.
Cash Flow Hedge reserve
The following table shows the change in the Cash Flow Hedge reserve related to the
application of IFRS 9 on derivative contracts and referring to the recognition in net equity
of the effective part of the derivative contracts signed to hedge the foreign exchange rate
risk for which the Group applies hedge accounting.
Value at 31 December 2020
247
Change during the period
(398)
Value at 31 December 2021
(151)
The characteristics of the derivative financial instruments that gave rise to the Cash Flow
Hedge reserve and the accounting effects on other items in the financial statements are
broken down in Note 36, in the paragraph Foreign exchange risk management.
Sabaf Group | Consolidated financial statements at 31 December 2021
52
14. LOANS
31/12/2021
31/12/2020
Current
Non-current
Total
Current
Non-current
Total
Bond issue
-
29,649
29,649
-
-
-
Unsecured loans
19,044
53,913
72,957
15,801
28,647
44,448
Short-term bank loans
1,769
-
1,769
8,630
-
8,630
Advances on bank
receipts or invoices
2,263
-
2,263
4,668
-
4,668
Leases
1,329
2,942
4,271
1,390
3,506
4,896
Interest payable
-
-
-
4
-
4
Total
24,405
86,504
110,909
30,493
32,153
62,646
In December 2021, Sabaf S.p.A. issued a €30 million bond fully subscribed by PRICOA
with a maturity of 10 years, an average life of 8 years and a fixed coupon of 1.85% per
year. This issue enabled Sabaf to diversify its sources of financing, improve financial
flexibility and significantly lengthen the average duration of its debt. The loan described
has the following covenants, defined with reference to the consolidated financial
statements at the end of each reporting period, widely complied with at 31 December 2021
and for which, according to the Group's business plan, compliance is also expected in
subsequent years:
▪ commitment to maintain a ratio of net financial debt to shareholders’ equity of
less than 1.5;
▪ commitment to maintain a ratio of net financial debt to EBITDA of less than 3;
▪ commitment to maintain a ratio of EBITDA to net financial position of more
than 4.
During the year, the Group took out new unsecured loans for a total of €46 million to
finance the investments made. All loans are signed with an original maturity of ranging
from 5 to 6 years and are repayable in instalments.
Some of the outstanding unsecured loans have covenants, defined with reference to the
consolidated financial statements at the end of the reporting period, as specified below:
▪ commitment to maintain a ratio of net financial debt to shareholders’ equity of
less than 1 (residual amount of the loans at 31 December 2021 equal to €47.8
million);
▪ commitment to maintain a ratio of net financial debt to EBITDA of less than 2.5
(residual amount of the loans at 31 December 2021 equal to €56.8 million).
widely complied with at 31 December 2021 and for which, according to the Group's
business plan, compliance is also expected in subsequent years.
All bank loans are denominated in euro, with the exception of a short-term loan of USD 2
million.
To manage interest rate risk, unsecured loans are either fixed-rate or hedged by IRS. These
consolidated financial statements include the negative fair value of the IRSs hedging rate
risks of unsecured loans pending, for residual notional amounts of approximately €37.5
million and expiry until 31 December 2027. Financial expenses were recognised in the
income statement with a balancing entry.
Sabaf Group | Consolidated financial statements at 31 December 2021
53
The following table shows the changes in lease liabilities during the year:
Lease liabilities at 31 December 2019
4,528
New agreements signed during 2020
1,706
Repayments during 2020
(1,400)
Forex differences
(64)
Lease liabilities at 31 December 2020
4,896
New agreements signed during 2021
954
Repayments during 2021
(1,581)
Forex differences
2
Lease liabilities at 31 December 2021
4,271
Note 36 provides information on financial risks, pursuant to IFRS 7.
15. OTHER FINANCIAL LIABILITIES
31/12/2021
31/12/2020
Current
Non-current
Current
Non-current
Option on A.R.C. minorities
-
-
1,581
-
Option on C.M.I. minorities
-
-
5,250
-
Payables to A.R.C. shareholders
-
-
60
-
Payables to C.M.I. shareholders
1,173
-
1,173
-
Derivative instruments on
interest rates
190
-
425
-
Currency derivatives
156
-
-
-
Total
1,519
-
8,489
-
At 31 December 2020, financial liabilities were recognised for options on minorities
amounting to €6,831 thousand and relating to the accounting, in accordance with IAS 32,
of call/put options subscribed in the context of the acquisition of A.R.C. s.r.l. (carried out
in June 2016) and C.M.I. s.r.l. (carried out in June 2019), i.e. options to purchase by Sabaf
and to sell by the minority shareholders, for the remaining shares of the share capital at
contractually defined strike prices on the basis of income and financial parameters
reported by the subsidiaries.
At 31 December 2021, both options were exercised, in particular:
▪ in October 2021, Sabaf S.p.A. completed the purchase of 30% of the capital of
A.R.C. s.r.l., from Loris Gasparini for a consideration of €1,650 thousand. The
difference with respect to the value of the financial liability recognised at 31
December 2020 amounting to €69 thousand, in accordance with IAS 39, was
allocated to financial expenses. As a result of the transaction, Sabaf S.p.A. now
holds 100% of A.R.C. s.r.l.;
▪ in November 2021, Sabaf S.p.A. also completed the acquisition of 15.75% of the
share capital of C.M.I. s.r.l., following the exercise of the second put option by the
minority shareholder Starfire s.r.l. (Guandong Xingye Investment Group). The fee
was €4,743 thousand. The difference with respect to the value of the financial
liability recognised at 31 December 2020 amounting to €507 thousand, in
accordance with IAS 39, was allocated to financial income. As a result of this
transaction, Sabaf S.p.A. now holds 100% of C.M.I. s.r.l..
The payable to the C.M.I. of €1.173 thousand at 31 December 2021 is related to the part
of the price still to be paid to the sellers, which was deposited on a non-interest-bearing
Sabaf Group | Consolidated financial statements at 31 December 2021
54
restricted account and will be released in favour of the sellers in accordance with
contractual agreements and guarantees issued by the sellers.
Currency derivatives refer to forward sales contracts recognised using hedge accounting.
These financial instruments are broken down in Note 36 - Forex risk management
At 31 December 2021, the Group has in place six interest rate swap (IRS) contracts for
amounts and maturities coinciding with six unsecured loans that are being amortised,
whose residual value at 31 December 2021 is €33,350 thousand. The contracts have not
been designated as capital flow hedges and are therefore at their fair value through profit
and loss, and recognised in the items “Financial assets” or “Other financial liabilities”.
16. POST-EMPLOYMENT BENEFIT AND RETIREMENT PROVISIONS
Post-employment
benefit
At 31 December 2020
3,513
Provisions
220
Financial expenses
7
Payments made
(226)
Tax effect
20
Change in the scope of consolidation
-
Forex differences
(126)
At 31 December 2021
3,408
Following the revision of IAS 19 - Employee benefits, from 1 January 2013, all actuarial
gains or losses are recognised immediately in the comprehensive income statement
("Other comprehensive income"
) under the item "Actuarial income and losses".
Post-employment benefits are calculated as follows:
Financial assumptions
31/12/2021
31/12/2020
Discount rate
0.40%
0.23%
Inflation
1.30%
1.00%
Demographic theory
31/12/2021
31/12/2020
Mortality rate
IPS55 ANIA
IPS55 ANIA
Disability rate
INPS 2000
INPS 2000
Staff turnover
3% - 8%
3% - 6%
Advance payouts
2% - 4%
5% - 6% per year
Retirement age
Pursuant to legislation in force
at 31 December 2021
Pursuant to legislation in force
at 31 December 2020
Sabaf Group | Consolidated financial statements at 31 December 2021
55
17. PROVISIONS FOR RISKS AND CHARGES
31/12/2020
Provi
sions
Utilisation
Exchange
rate
differences
31/12/2021
Provision for agents’
indemnities
221
29
(1)
-
249
Product guarantee fund
60
-
-
-
60
Provision for legal risks
970
-
(550)
(4)
416
Other provisions for
risks and charges
182
500
-
(73)
609
Total
1,433
529
(551)
(77)
1,334
The provision for agents’ indemnities covers amounts payable to agents if the Group
terminates the agency relationship.
The product guarantee fund covers the risk of returns or charges by customers for products
already sold and, if necessary, is adjusted at the end of the financial year on the basis of
analyses carried out and past experience.
With regard to the provision for legal risks, note that, at the end of the 2020 financial year,
a provision of €500 thousand had been recognised in relation to a patent dispute, for which
a settlement was reached with the counterparty at the beginning of 2021. During 2021, the
corresponding use of the provision was therefore recognised, against payment.
Note also that following the process of allocating the price paid for the acquisition of the
C.M.I. Group on the net assets acquired (Purchase Price Allocation), completed during
2019, a provision for legal risks with a residual value of €328 thousand was recognised.
At 31 December 2021, a provision of €500 thousand was recognised under Other
provisions for risks and charges, expressing the best estimate of the liability following the
results of a tax audit on the Parent Company for the years from 2016 to 2018.
The provisions for risks, which represent the estimate of future payments made based on
historical experience, have not been discounted because the effect is considered negligible.
18. TRADE PAYABLES
31/12/2021
31/12/2020
Change
Total
54,837
41,773
13,064
The increase in trade payables is related to higher production volumes of the year. Average
payment terms did not change versus the previous year. At 31 December 2021, there were
no overdue payables of a significant amount and the Group did not receive any injunctions
for overdue payables.
19. TAX PAYABLES
31/12/2021
31/12/2020
Change
For income tax
3,450
1,923
1,527
Withholding taxes
954
1,029
(75)
Other tax payables
547
335
212
Total
4,951
3,287
1,664
Sabaf Group | Consolidated financial statements at 31 December 2021
56
The income tax payables refer to the taxes for the year, for the portion exceeding the
advances paid.
20. OTHER CURRENT PAYABLES
31/12/2021
31/12/2020
Change
To employees
6,706
5,848
858
To social security institutions
2,844
2,679
165
To agents
283
286
(3)
Advances from customers
1,694
1,210
484
Other current payables
1,548
934
614
Total
13,075
10,957
2,118
At the beginning of 2022, payables due to employees and social security institutions were
paid in accordance with the scheduled expiry dates.
Other current payables include accrued liabilities and deferred income.
21. DEFERRED TAX ASSETS AND LIABILITIES
31/12/2021
31/12/2020
Change
Deferred tax assets
8,639
8,075
564
Deferred tax liabilities
(3,939)
(4,697)
758
Net position
4,700
3,378
1,372
The table below analyses the nature of the temporary differences that determine the
recognition of deferred tax liabilities and assets and their changes during the year and the
previous year.
Non-
current
tangible
and
intangible
assets
Provision
s
, value
adjustme
nts
Fair
value of
derivativ
e
instrume
nts
Good
will
Tax
incentiv
es
Tax
losses
Actuarial
evaluation
of post-
employmen
t benefit
Other
temporary
differences
Total
31/12/2020
(3,461)
1,397
46
1,240
2,645
396
208
907
3,378
Through
profit or loss
1,389
(107)
(11)
(177)
1,455
612
0
(194)
2,967
In
shareholders'
equity
0
0
0
0
0
0
(16)
0
(16)
Forex
differences
160
(12)
0
0
(1,514)
(264)
0
1
(1,629)
31/12/2021
(1,912)
1,278
35
1,063
2,586
744
192
714
4,700
Deferred tax assets recognised in the income statement in respect of "Non-current tangible
and intangible assets" included €1,161 thousand in these consolidated financial statements
as a result of the revaluation for tax purposes of the tangible assets of the Group's Turkish
companies. The exercise of the revaluation option results in a substitute tax of
approximately €106 thousand, which is accounted for in current taxes for the year.
Deferred tax assets relating to goodwill refer to the exemption of the value of the
Sabaf Group | Consolidated financial statements at 31 December 2021
57
investment in Faringosi Hinges s.r.l. made in 2011 pursuant to Law Decree 98/2011,
deductible in ten instalments starting in 2018.
Deferred tax assets relating to tax incentives are commensurate to investments made in
Turkey, for which the Group will benefit from a reduction in the effective tax rate in future
years.
22. TOTAL FINANCIAL DEBT
As required by the CONSOB memorandum of 28 July 2006, we disclose that the Group’s
net financial debt is as follows:
31/12/2021
31/12/2020
Change
A.
Cash
43,217
12,802
(443)
B.
Cash equivalents
432
516
45
C.
Other current financial assets
1,172
1,495
(320)
D.
Liquidity (A+B+C)
44,821
14,813
(718)
E.
Current financial payable
5,551
23,181
6,961
F.
Current portion of non-current financial debt
20,373
15,801
1,391
G.
Current financial debt (E+F)
25,924
38,982
8,352
H.
Net current financial debt (G-D)
(18,897)
24,169
9,070
I.
Non-current financial payable
56,855
32,153
5,734
J.
Debt instruments
29,649
-
-
K.
Trade payables and other non-current payables
-
-
-
L.
Non-current financial debt (I+J+K)
86,504
32,153
5,734
M.
Total financial debt (H+L)
67,607
56,322
14,804
The consolidated statement of cash flows, which shows the changes in cash and cash
equivalents (sum of letters A. and B. of this statement), describes in detail the cash flows
that led to the change in the net financial debt. In particular, as can be seen from the
Consolidated Statement of Cash Flows, the increase in net financial debt in the period is
mainly attributable to:
- the change in net working capital
- the investments made
- profits distributed to shareholders.
Sabaf Group | Consolidated financial statements at 31 December 2021
58
Comments on key income statement items
23. REVENUE
In 2021, sales revenue totalled €263,259 thousand, up by €78,353 thousand (+42.4%)
compared with 2020.
Revenue by geographical area
2021
%
2020
%
% change
Europe (excluding Turkey)
92,935
35.3%
69,618
37.7%
+33.5%
Turkey
65,526
24.9%
44,806
24.2%
+46.2%
North America
30,472
11.6%
22,700
12.3%
+34.2%
South America
39,589
15.0%
27,639
14.9%
+43.2%
Africa and Middle East
19,614
7.5%
12,177
6.6%
+61.1%
Asia and Oceania
15,123
5.7%
7,966
4.3%
+89.8%
263,259
100%
184,906
100%
+42.4%
Revenue by product family
2021
%
2020
%
% change
Gas parts
182,468
69.3%
129,834
70.2%
+40.5%
Hinges
58,375
22.2%
41,326
22.3%
+41.3%
Electronic components
22,416
8.5%
13,746
7.4%
+63.1%
Total
263,259
100%
184,906
100%
+42.4%
In 2021, demand was solid in all markets, with particularly high peaks in the first half of
the year. The increase in sales was very strong in all geographical areas, with peaks in
Asia, Africa and the Middle East, indicating an increasingly global presence of our Group.
In 2021, the increase in sales of electronic components was also particularly significant,
continuing to benefit from cross-selling with the traditional products in the Group's
portfolio and from the strong drive to develop new components.
Average sales prices in 2021 were 3% higher than in 2020.
24. OTHER INCOME
2021
2020
Change
Sale of trimmings
5,546
2,909
2,637
Contingent income
374
999
(625)
Rental income
123
121
2
Use of provisions for risks and charges
12
94
(82)
Other income
2,606
3,071
(465)
Total
8,661
7,194
1,467
Other income mainly included: €1,234 thousand revenue from the sale of moulds and
equipment, tax credits for investments in capital goods and for research and development
of €356 thousand, Turkish public contributions of €332 thousand, referred to incentives for
the hiring personnel, and €133 thousand related to the production of energy through
photovoltaic plants.
Sabaf Group | Consolidated financial statements at 31 December 2021
59
25. MATERIALS
2021
2020
Change
Commodities and outsourced components
132,143
75,443
56,700
Consumables
10,212
7,523
2,689
Total
142,355
82,966
59,389
In 2021, the Group faced violent increases in the costs of its main raw materials (aluminium
alloys, steel and brass), with a negative impact estimated at 6.2% of sales.
26. COSTS FOR SERVICES
2021
2020
Change
Outsourced processing
18,689
11,094
7,595
Natural gas and power
8,536
4,380
4,156
Maintenance
7,972
5,920
2,052
Transport
4,658
2,986
1,672
Advisory services
2,856
2,320
536
Travel expenses and allowances
292
219
73
Commissions
1,144
835
309
Directors’ fees
829
693
136
Insurance
727
694
33
Canteen
797
560
237
Other costs
5,877
4,563
1,314
Total
52,377
34,264
18,113
The main outsourced processing includes aluminium die-casting, hot moulding of brass
and steel blanking as well as some mechanical processing and assembly. The increase in
costs for outsourced processing reflects the increased use of subcontracting to cope with
peaks in demand.
The increase in energy costs resulted, in addition to the increase in production volumes,
from the extraordinary and sudden increase in electricity and gas prices in the second half
of the year, which led to higher charges of €3.4 million.
Other costs included expenses for the registration of patents, waste disposal, cleaning,
leasing third-party assets and other minor charges.
27. PERSONNEL COSTS
2021
2020
Change
Salaries and wages
32,749
29,048
3,701
Social Security costs
10,175
8,831
1,344
Temporary agency workers
7,596
2,869
4,727
Post-employment benefit and other costs
2,639
2,294
345
Stock grant plan
805
658
147
Total
53,964
43,700
10,264
The number of Group employees was 1,278 at 31 December 2021 (1,168 at 31 December
2020).
The number of temporary staff was 198 at 31 December 2021 (155 at 31 December 2020).
Sabaf Group | Consolidated financial statements at 31 December 2021
60
The item "Stock Grant Plan" included the measurement at 31 December 2021 of the fair
value of options to the allocation of shares of the Parent Company assigned to Group
employees. For details of the Stock Grant Plan, refer to Note 38.
28. OTHER OPERATING COSTS
2021
2020
Change
Non-income taxes
651
692
(41)
Other operating expenses
694
524
170
Contingent liabilities
54
36
18
Losses and write-downs of trade
receivables
103
118
(15)
Provisions for risks
-
576
(576)
Other provisions
29
35
(6)
Total
1,531
1,981
(450)
Non-income taxes chiefly relate to property tax.
29. FINANCIAL INCOME
2021
2020
Change
Exercise of the C.M.I. put option (Note 15)
507
1,137
(630)
Adjustment to the fair value of the A.R.C. option
-
69
(69)
Interest from bank current accounts
227
155
72
Other financial income
16
5
11
Total
750
1,366
(616)
Financial income includes €507 thousand related to the difference between the fee actually
paid and the carrying value of the second put option on the remaining 15.75% share of
C.M.I. s.r.l. (Note 15).
30. FINANCIAL EXPENSES
2021
2020
Change
Interest paid to banks
598
1,002
(404)
Interest paid on finance lease contracts
138
112
26
Banking expenses
302
251
51
Exercise of A.R.C. option (Note 15)
69
-
69
Adjustment to the Fair value of the C.M.I.
option
-
750
(750)
Other financial expense
72
31
41
Total
1,179
2,146
(967)
Financial expenses include €69 thousand related to the difference between the carrying
value of the put option related to the purchase of the remaining 30% share of A.R.C. s.r.l.
and the fee actually paid (Note 15).
Interest paid to banks includes IRS spreads payable that hedge interest rate risks (Note
36).
Sabaf Group | Consolidated financial statements at 31 December 2021
61
31. EXCHANGE RATE GAINS AND LOSSES
In 2021, the Group reported net foreign exchange losses of €7,399 thousand, versus net
losses of €4,812 thousand in 2020. The main portion of 2021 foreign exchange losses
reflect the sudden devaluation of the Turkish lira and arise from the translation into lira
(the currency in which the financial statements of the Group's Turkish companies are
prepared) of trade and financial payables denominated in euro.
32. INCOME TAXES
2021
2020
Change
Current taxes for the year
7,617
3,641
3,976
Deferred tax assets and liabilities
(2,967)
(4,259)
1,292
Taxes related to previous financial years
347
767
(420)
Total
4,997
149
4,848
Reconciliation between the tax burden booked in the financial statements and the
theoretical tax burden calculated according to the statutory tax rates currently in force in
Italy is shown in the following table:
2021
2020
Theoretical income tax
7,411
3,735
Permanent tax differences
113
(192)
Taxes related to previous financial years
(151)
767
Tax effect from different foreign tax rates
227
97
Effect of non-recoverable tax losses
105
150
“Patent box” tax benefit
-
-
“Super and Iperammortamento” tax benefit
(844)
(812)
ACE tax benefit
(375)
-
Realignment between carrying values and tax values of properties
(Note 21)
-
(1,360)
Revaluation of carrying values of fixed assets in Turkey
(1,161)
-
Tax incentives for investments in Turkey
(1,963)
(2,432)
Other differences
(164)
(441)
Income taxes booked in the accounts, excluding IRAP and
withholding taxes (current and deferred)
3,198
(488)
IRAP (current and deferred)
1,211
518
Substitute tax on realignment of property values
106
163
Provision for tax risks
500
0
Tax credit on sanitisation costs
(18)
(44)
Total
4,997
149
Theoretical taxes were calculated applying the current corporate income tax (IRES) rate,
i.e. 24%, to the pre-tax result. IRAP is not taken into account for the purpose of
reconciliation because, as it is a tax with a different assessment basis from pre-tax profit,
it would generate distorting effects.
In these consolidated financial statements, the Group recognised:
▪ the tax benefits relating to "Superammortamento" (Super amortisation) and
"Iperammortamento" (Hyper amortisation), related to the investments made in
Italy, amounting to €844 thousand (€812 thousand in 2020);
Sabaf Group | Consolidated financial statements at 31 December 2021
62
▪ the tax benefits deriving from the investments made in Italy amounting to €1,963
thousand (€2,432 thousand in 2020).
33. EARNINGS PER SHARE
Basic and diluted EPS are calculated based on the following data:
Earnings
(
€
/000)
2021
2020
Profit for the year
23,903
13,961
Number of shares
2021
2020
Weighted average number of ordinary shares for
determining basic earnings per share
11,209,078
11,260,791
Dilutive effect from potential ordinary shares
-
-
Weighted average number of ordinary shares for
determining diluted earnings per share
11,209,078
11,260,791
Earnings per share
(in
€
)
2021
2020
Basic earnings per share
2.132
1.240
Diluted earnings per share
2.132
1.240
Basic earnings per share are calculated on the average number of outstanding shares
minus treasury shares, equal to 324,372 in 2021 (272,659 in 2020).
Diluted earnings per share are calculated taking into account any shares approved but not
yet subscribed.
34. DIVIDENDS
On 2 June 2021, shareholders were paid an ordinary dividend of €0.55 per share (total
dividends of €6,172 thousand).
The Directors have recommended payment of a dividend of €0.60 per share this year. This
dividend is subject to approval of shareholders in the annual Shareholders’ Meeting and
was not included under liabilities in these financial statements.
The dividend proposed is scheduled for payment on 1 June 2022 (ex-date 30 May and
record date 31 May).
35. INFORMATION BY BUSINESS SEGMENT
Information by business segment for 2021 and 2020 is provided below
2021 FY
Gas parts
(household and
professional)
Hinges
Electronic
components
Total
Sales
182,618
58,671
21,970
263,259
Ebit
23,649
6,292
7,567
37,508
Sabaf Group | Consolidated financial statements at 31 December 2021
63
2020 FY
Gas parts
(household and
professional)
Hinges
Electronic
components
Total
Sales
129,864
41,078
13,964
184,906
Ebit
12,683
2,999
4,411
20,093
36. INFORMATION ON FINANCIAL RISK
Categories of financial instruments
In accordance with IFRS 7, a breakdown of the financial instruments is shown below,
among the categories set forth in IAS 39:
31/12/2021
31/12/2020
Financial assets
Amortised cost
Cash and cash equivalents
43,649
13,318
Term bank deposits
1,172
1,233
Trade receivables and other receivables
72,276
67,121
Hedge accounting
Derivatives to hedge cash flows
-
262
Financial liabilities
Amortised cost
Loans
110,909
62,646
Other financial liabilities
1,173
1,233
Trade payables
54,837
41,773
Fair Value through profit or loss
Put option on A.R.C. (Note 15)
-
1,581
C.M.I. put option (Note 15)
-
5,250
Derivatives to hedge cash flows
190
425
Hedge accounting
Derivatives to hedge cash flows
156
262
The Group is exposed to financial risks related to its operations, mainly:
▪ credit risk, with special reference to normal trade relations with customers;
▪ market risk, relating to the volatility of prices of commodities, foreign exchange
and interest rates;
▪ liquidity risk, which can be expressed by the inability to find financial resources
necessary to ensure Group operations.
It is part of the Sabaf Group’s policies to hedge exposure to changes in prices and in
fluctuations in exchange and interest rates via derivative financial instruments. Hedging is
done using forward contracts, options or combinations of these instruments. Generally
speaking, the maximum duration covered by such hedging does not exceed 18 months.
The Group does not enter into speculative transactions. When the derivatives used for
hedging purposes meet the necessary requisites, hedge accounting rules are followed.
Sabaf Group | Consolidated financial statements at 31 December 2021
64
Credit risk management
Trade receivables involve producers of domestic appliances, multinational groups and
smaller manufacturers in a few or single markets. The Group assesses the creditworthiness
of all its customers at the start of supply and systemically at least on an annual basis. After
this assessment, each customer is assigned a credit limit.
The Group factors receivables with factoring companies based on without recourse
agreements, thereby transferring the related risk.
A credit insurance policy is in place, which guarantees cover for approximately 35% of
trade receivables.
Credit risk relating to customers operating in emerging economies is generally attenuated
by the expectation of revenue through letters of credit.
Forex risk management
The key currencies other than the euro to which the Group is exposed are the US dollar,
the Brazilian real and the Turkish lira, in relation to sales made in dollars (chiefly on some
Asian and American markets) and the production units in Brazil and Turkey. Sales in US
dollars represented 18.6% of total turnover in 2021, while purchases in dollars represented
4.8% of total turnover. During the year, operations in dollars were partially hedged through
forward sales contracts. At 31 December 2021, the Group had in place forward sales
contracts of USD 8 million, maturing in December 2022 at an average exchange rate of
1.1615. With reference to these contracts, the Group applies hedge accounting, checking
compliance with IFRS 9.
The table below shows the balance sheet and income statement effects of forward sales
contracts recognised under hedge accounting
.
(amounts in
€
/000)
2021
Reduction in financial assets
(262)
Increase in current financial liabilities
(156)
Adjustment to the Cash Flow Hedge reserve (equity reserve)
398
Negative impact through profit or loss
20
The following table shows the characteristics of the derivative financial instruments
described in the previous paragraph
.
Sabaf Group | Consolidated financial statements at 31 December 2021
65
Exchange rate risk management: cash flow hedge in accordance with IFRS 9 on commercial
transactions
Company
Counterparty
Instrument
Maturity
Value
date
Notional
Fair value hierarchy
Sabaf S.p.A.
Unicredit
Forward
28/03/2022
USD
500,000
2
27/06/2022
500,000
28/06/2022
500,000
27/09/2022
500,000
27/12/2022
500,000
Faringosi
Hinges s.r.l.
BPER Banca
Forward
28/03/2022
USD
500,000
28/06/2022
500,000
28/09/2022
500,000
C.M.I. s.r.l.
BPER Banca
Forward
05/01/2022
USD
500,000
10/01/2022
500,000
06/04/2022
1,000,000
06/07/2022
1,500,000
Sensitivity analysis
With reference to financial assets and liabilities in US dollars at 31 December 2021, a
hypothetical and immediate revaluation of 10% of euro against the dollar would have led
to a loss of €1,515 thousand.
Net value of assets and liabilities in foreign subsidiaries
The net value of assets and liabilities in foreign subsidiaries constitutes an investment in
foreign currency, which generates a translation difference on consolidation of the Group,
with an impact on the comprehensive income statement and the financial position. A 10%
upward or downward change in the value of each currency against the euro would affect
the Group's equity by approximately +/- €5.5 million at the end of 2021.
Interest rate risk management
Owing to the current trend in interest rates, the Group favours fixed-rate indebtedness:
medium to long-term loans originated at a variable rate are converted to a fixed rate by
entering into interest rate swaps (IRS) when the loan is opened. At 31 December 2021, IRS
totalling €37.5 million were in place, mirrored in mortgages with the same residual debt,
through which the Group transformed the floating rate of the mortgages into fixed rate.
The derivative contracts were not designated as a cash flow hedge and were therefore
recognised using the "fair value through profit or loss" method.
The following table shows the characteristics of the derivative financial instruments
described in the previous paragraph
.
Company
Counterparty
Instrument
Maturity
Value
date
Notional
Fair value
hierarchy
Sabaf S.p.A.
MPS
IRS
30/06/2023
EUR
1,500,000
2
Intesa Sanpaolo
15/06/2024
6,000,000
Intesa Sanpaolo
15/06/2024
1,850,000
Crédit Agricole
30/06/2025
9,000,000
Mediobanca
28/04/2027
15,000,000
Sabaf Turkey
Intesa Sanpaolo
17/06/2024
4,150,000
Sabaf Group | Consolidated financial statements at 31 December 2021
66
Sensitivity analysis
Considering the IRS in place, at the end of 2021 almost all of the Group's financial debt
was at a fixed rate. Therefore, at 31 December 2021 no sensitivity analysis was carried out
in that the exposure to interest rate risk, linked to a hypothetical increase (decrease) in
interest rates, is not significant.
Commodity price risk management
A significant portion of the Group’s purchase costs is represented by aluminium, steel and
brass. Metal prices rose sharply during 2021, forcing the Group to renegotiate sales prices
several times to compensate for the increase in costs. Based on market conditions and
contractual agreements, the Group may not be able to pass on changes in raw material
prices to customers in a timely and/or complete manner, with consequent effects on
margins. The Group also protects itself from the risk of changes in the price of aluminium,
steel and brass with supply contracts signed with suppliers for delivery up to twelve
months in advance or, alternatively, with derivative financial instruments. In 2021 and
2020, the Group did not use financial derivatives on commodities.
Liquidity risk management
The Group operates with a debt ratio considered physiological (net financial debt /
shareholders' equity at 31 December 2021 of 55.2%, net financial debt / EBITDA of 1.25)
and has unused short-term lines of credit. To minimise the risk of liquidity, the
Administration and Finance Department:
▪ maintains a correct balance of net financial debt, financing investments with
capital and with medium to long-term debt;
▪ verifies systematically that the short-term accrued cash flows (amounts received
from customers and other income) are expected to accommodate the deferred
cash flows (short-term financial debt, payments to suppliers and other
outgoings);
▪ regularly assesses expected financial needs in order to promptly take any
corrective measures.
An analysis by expiry date of financial payables at 31 December 2021 and 31 December
2020 is shown below:
At 31 December 2021
Carrying
value
Contractual
cash flows
Within 3
months
From 3
months to
1 year
From 1 to
5 years
More than
5 years
Short-term bank loans
4,378
4,378
4,378
-
-
-
Unsecured loans
72,957
74,574
1,906
17,720
49,273
5,675
Bond issues
29,649
34,440
-
555
2,220
31,665
Finance leases
4,271
4,766
361
1,058
2,793
554
Payables to C.M.I.
shareholders
1,173
1,173
-
1,173
-
-
Total financial payables
112,428
119,331
6,645
20,506
54,286
37,894
Trade payables
54,837
54,837
51,218
3,619
-
-
Total
167,265
174,168
57,863
24,125
54,286
37,894
Sabaf Group | Consolidated financial statements at 31 December 2021
67
At 31 December 2020
Carrying
value
Contractual
cash flows
Within 3
months
From 3
months to 1
year
From 1 to
5 years
More than
5 years
Short-term bank loans
13,727
13,727
13,727
-
-
-
Unsecured loans
44,448
45,211
2,074
14,022
29,115
-
Finance leases
4,896
5,143
383
1,125
3,206
429
Payables to A.R.C.
shareholders
60
60
-
60
-
-
Payables to C.M.I.
shareholders
1,173
1,173
-
1,173
-
-
A.R.C. option
1,581
1,581
-
1,581
-
-
C.M.I. option
5,250
5,250
-
5,250
-
-
Total financial
payables
71,135
72,145
16,184
23,211
32,321
429
Trade payables
41,773
41,773
38,503
3,270
-
-
Total
112,908
113,918
54,687
26,481
32,321
429
The various due dates are based on the period between the end of the reporting period
and the contractual expiry date of the commitments, the values indicated in the table
correspond to non-discounted cash flows. Cash flows include the shares of principal and
interest; for floating rate liabilities, the shares of interest are determined based on the value
of the reference parameter at the end of the reporting period and increased by the spread
set forth in each contract.
Hierarchical levels of fair value assessment
The revised IFRS 7 requires that financial instruments reported in the statement of
financial position at fair value be classified based on a hierarchy that reflects the
significance of the input used in determining the fair value. IFRS 7 makes a distinction
between the following levels:
▪ Level 1 – quotations found on an active market for assets or liabilities subject to
assessment;
▪ Level 2 - input other than prices listed in the previous point, which can be observed
directly (prices) or indirectly (derived from prices) on the market;
▪ Level 3 – input based on observable market data.
The following table shows the financial assets and liabilities valued at fair value at 31
December 2021, by hierarchical level of fair value assessment.
Level 1
Level 2
Level 3
Total
Other financial liabilities (interest rate derivatives)
-
190
-
190
Total liabilities
-
190
-
190
37. RELATED-PARTY TRANSACTIONS
Transactions between consolidated companies were derecognised from the consolidated
financial statements and are not reported in these notes. The table below illustrates the
impact of all transactions between the Group and other related parties on the balance sheet
and income statement.
Sabaf Group | Consolidated financial statements at 31 December 2021
68
Impact of related-party transactions on balance sheet items
Total
2021
Non-consolidated
subsidiaries
Other
related
parties
Total related
parties
Impact on
the total
Trade payables
54,837
-
4
4
0.01%
Total
2020
Non-consolidated
subsidiaries
Other
related
parties
Total related
parties
Impact on
the total
Trade payables
41,773
-
4
4
0.01%
Impact of related-party transactions on income statement items
Total
2021
Non-
consolidated
subsidiaries
Other related
parties
Total
related
parties
Impact on
the total
Services
(52,377)
-
(22)
(22)
0.04%
Total
2020
Non-
consolidated
subsidiaries
Other related
parties
Total
related
parties
Impact on
the total
Services
(34,264)
-
(22)
(22)
0.06%
Transactions are regulated by specific contracts regulated at arm’s length conditions.
Fees to directors, statutory auditors and executives with strategic
responsibilities
Please see the 2021 Report on Remuneration for this information.
38. SHARE-BASED PAYMENTS
Two stock grant plans are in place, namely the 2018 - 2020 Stock Grant Plan and the 2021
- 2023 Stock Grant Plan. The Plans aim to promote and pursue the involvement of the
beneficiaries whose activities are considered relevant for the implementation of the
contents and the achievement of the objectives set out in the Business Plan, foster loyalty
development and motivation of managers, by increasing their entrepreneurial approach as
well as align the interests of management with those of the Company's shareholders more
closely, with a view to encouraging the achievement of significant results in the economic
and asset growth and sustainability of the Company and of the Group.
2018 – 2020 Stock Grant Plan
The Plan was approved by the Shareholders' Meeting on 8 May 2018 and the related
Regulations by the Board of Directors on 15 May 2018, subsequently amended as on 14
May 2019.
Subject matter
The subject-matter of the Plan is the free allocation to the Beneficiaries of a maximum of
370,000 Options, each of which entitles them to receive free of charge, under the terms
and conditions provided for by the Regulations of the relevant Plan, 1 Sabaf S.p.A. Share.
The free allocation of Sabaf S.p.A. shares is conditional, among other things, on the
achievement, in whole or in part of the business objectives related to the ROI, EBITDA
and TSR indicators and, for a share not exceeding 30%, of individual objectives, on a
Sabaf Group | Consolidated financial statements at 31 December 2021
69
progressive basis;
Beneficiaries
The Plan is intended for persons who hold or will hold key positions in the Company
and/or its Subsidiaries, with reference to the implementation of the contents and the
achievement of the objectives of the 2018 - 2020 Business Plan. The Beneficiaries were
divided into two groups:
- Cluster 1: beneficiaries identified in the Plan or who will be identified by the Board
of Directors by 30 June 2018 and to whom 185,600 rights have been allocated;
- Cluster 2: beneficiaries identified by the Board of Directors from 1 July 2018 to 30
June 2019 and to whom 184,400 rights have been allocated;
Deadline
The 2018 - 2020 Plan expires on 31 December 2022.
Rights accrued and allocation of shares
With reference to Cluster 1, based on the level of achievement of the objectives and the
other conditions set out in the Plan, 34,946 rights accrued, therefore 34,946 shares have
been allocated to the Beneficiaries during 2021.
With regard to Cluster 2, based on the level of achievement of the objectives set out in the
Plan, 114,074 rights accrued. The allocation of the relevant shares will be made during 2022
and is conditional on the continuation of the employment relationship with the Beneficiaries
at the date of approval of the financial statements for the year 2021 of Sabaf S.p.A..
Accounting impacts and
Fair Value measurement methods
The Group's shareholders' equity includes the Stock Grant reserve (Note 13), which
includes €896 thousand for the fair value measurement of the Rights assigned to Cluster 2
beneficiaries. Please see the explanatory notes to the consolidated financial statements at
31 December 2020 for an explanation of how to determine the fair value of these rights.
2021 – 2023 Stock Grant Plan
The plan was approved by the Shareholders' Meeting on 6 May 2021 and the related
Regulations by the Board of Directors on 13 May 2021.
Subject matter
The subject-matter of the Plan is the free allocation to the Beneficiaries of a maximum of
260,000 Options, each of which entitles them to receive free of charge, under the terms
and conditions provided for by the Regulations of the relevant Plan, 1 Sabaf S.p.A. Share.
The free allocation of Sabaf S.p.A. shares is conditional on the achievement, in whole or
in part, with progressiveness, of the business targets related to the ROI and EBITDA and
social and environmental targets.
Beneficiaries
The Plan is intended for persons who hold or will hold key positions in the Company
and/or its Subsidiaries, with reference to the implementation of the contents and the
achievement of the objectives of the 2021 - 2023 Business Plan. A total of 226,000 Rights
were allocated to the Beneficiaries already identified.
Sabaf Group | Consolidated financial statements at 31 December 2021
70
Deadline
The 2021 - 2023 Plan expires on 31 December 2024.
Accounting impacts and
Fair Value measurement methods
In connection with this Plan, €805 (Note 27) were recognised in personnel costs during the
year (Note 27), an equity reserve of the same amount (Note 13) was recognised as a
balancing entry.
In line with the date on which the beneficiaries became aware of the assignment of the
rights and terms of the plan, the grant date was set at 13 May 2021.
The main assumptions made at the beginning of the vesting period and the methods for
determining the fair value at the end of the reporting period are illustrated below. The
following economic and financial parameters were taken into account in determining the
fair value per share at the start of the vesting period:
Share price on grant date adjusted for dividends
23.09
Dividend yield
2.60%
Expected volatility per year
28%
Interest rate per year
-0.40%
Based on the exercise right at the different dates established by the Plan Regulations and
on the estimate of the expected probability of achieving the objectives for each reference
period, the unitary fair value at 31 December 2021 was determined as follows:
15.82
35%
16.43
40%
20.41
5%
7.82
5%
20.41
15%
Fair Value
Fair Value
Fair Value
Fair Value
Fair Value
Rights relating to business
objectives measured on EBITDA
Total value on ROI
Rights on ROI
Rights on EBITDA
Total value on "Personell
training"
Rights relating to ESG objectives
measured on personell training
16.58
Rights relating to ESG objectives
measured on emissions reduction
Total value on "Safety
indicator"
Rights on "Safety
indicator"
5.54
Rights on "Personell
training"
Total value on "Emissions
reduction"
Rights on "Emissions
reduction"
6.57
1.02
Rights relating to ESG objectives
measured on safety indicator
0.39
3.06
Fair value per share
Total value on EBITDA
Rights relating to business
objectives measured on ROI
Sabaf Group | Consolidated financial statements at 31 December 2021
71
39. CAPITAL MANAGEMENT
For the purposes of managing the Group's capital, it has been defined that this includes
the issued share capital, the share premium reserve and all other capital reserves
attributable to the shareholders of the Parent Company. The main objective of capital
management is to maximise the value for shareholders. In order to maintain or correct its
financial structure, the Group may intervene in dividends paid to shareholders, purchase
its own shares, redeem capital to shareholders or issue new shares. The Group controls
equity using a gearing ratio consisting of the ratio of net financial debt (as defined in Note
22) to shareholders’ equity. The Group's policy is to keep this ratio below 1. In order to
achieve this objective, the management of the Group's capital aims, among other things,
to ensure that the covenants, linked to loans, which define the capital structure
requirements, are complied with. Violations of covenants would allow the lenders to
demand immediate repayment of loans (Note 14). During the current financial year, there
were no breaches of the covenants linked to loans.
In the years ended 31 December 2021 and 2020, no changes were made to the objectives,
policies and procedures for capital management
40. SIGNIFICANT NON-RECURRING EVENTS AND TRANSACTIONS
Pursuant to CONSOB memorandum of 28 July 2006, the following section describes and
comments on significant non-recurring events, the consequences of which are reflected in
the economic, equity and financial results for the year:
Group
shareholders'
equity
Group net
profit
Net financial
debt
Cash flows
Financial statement values (A)
121,525
23,903
67,607
30,331
Revaluation of tax values of properties (a)
(728)
(1,055)
0
0
Recognition of tax benefits on investments
made in Turkey (b)
(1,512)
(1,963)
(508)
(508)
Provision for tax risks (c)
500
500
0
0
Total non-recurring operations (B)
(1,740)
(2,518)
(508)
(508)
Financial statement notional value
(A+B)
119,785
21,385
67,099
29,823
In these consolidated financial statements, the Group recognised under income taxes:
a) a non-recurring income of €801 thousand following the revaluation for tax
purposes of the tangible assets of the Group's Turkish companies. The exercise of
Sabaf Group | Consolidated financial statements at 31 December 2021
72
the revaluation option results in a substitute tax of approximately €73 thousand,
which is accounted for in current taxes for the year (Note 31)
b) a non-recurring income of €1,963 thousand relating to the tax benefits arising from
investments made in Turkey (Note 31)
c) a provision for tax risks of €500 thousand against potential tax liabilities (Note 17
and Note 28)
41. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
The recent conflict between Ukraine and Russia led to a sudden change in the global
economic scenario. Although the Group has a non-significant direct exposure to the
markets of Russia, Belarus and Ukraine, it is exposed to indirect effects on the price trends
of raw materials, electricity and gas, the supply chain and final demand. To date, these
effects are not quantifiable as they are related to future developments in the conflict, the
outcome of which cannot be determined.
Sabaf Group | Consolidated financial statements at 31 December 2021
73
42. ATYPICAL AND/OR UNUSUAL TRANSACTIONS
Pursuant to CONSOB memorandum of 28 July 2006, the Group declares that no atypical
and/or unusual transactions as defined by the CONSOB memorandum were executed
during 2021.
43. COMMITMENTS
Guarantees issued
The Sabaf Group has issued sureties to guarantee consumer and mortgage loans granted
by banks to Group employees for a total of €3,443 thousand (€3,632 thousand at 31
December 2020).
Sabaf Group | Consolidated financial statements at 31 December 2021
74
44. SCOPE OF CONSOLIDATION AND SIGNIFICANT EQUITY INVESTMENTS
COMPANIES CONSOLIDATED USING THE FULL LINE-BY-LINE CONSOLIDATION
METHOD
Company name
Registered
offices
Share
capital
Shareholders
%
ownership
Faringosi Hinges s.r.l.
Ospitaletto (BS)
EUR
90,000
Sabaf S.p.A.
100%
Sabaf do Brasil Ltda
Jundiaí - São
Paulo (Brazil)
BRL
53,348,061
Sabaf S.p.A.
100%
Sabaf Beyaz Esya Parcalari
Sanayi Ve Ticaret Limited
Sirteki (Sabaf Turkey)
Manisa (Turkey)
TRY
80,000,000
Sabaf S.p.A.
100%
Okida Elektronik Sanayi ve
Tickaret A.S
Istanbul (Turkey)
TRY
5,000,000
Sabaf S.p.A.
Sabaf Turkey
30%
70%
Sabaf Appliance Components
Ltd.
Kunshan (China)
EUR
7,900,000
Sabaf S.p.A.
100%
Sabaf US Corp.
Plainfield (USA)
USD
200,000
Sabaf S.p.A.
100%
Sabaf India Private Limited
Bangalore (India)
INR
153,833,140
Sabaf S.p.A.
100%
A.R.C. s.r.l.
Campodarsego
(PD)
EUR
45,000
Sabaf S.p.A.
100%
Handan ARC Burners Co.,
Ltd.
Handan (China)
RMB
3,000,000
A.R.C. s.r.l.
51%
Sabaf Mexico Appliance
Components
San Louis Potosì
(Mexico)
USD
3,650,000
Sabaf S.p.A.
100%
C.M.I. Cerniere Meccaniche
Industriali s.r.l.
Valsamoggia (BO)
EUR
1,000,000
Sabaf S.p.A.
100%
C.G.D. s.r.l.
Valsamoggia (BO)
EUR
26,000
C.M.I. s.r.l.
100%
Sabaf Group | Consolidated financial statements at 31 December 2021
75
45. GENERAL INFORMATION ON THE PARENT COMPANY
Name of the parent company: N/A
Name of the parent company: Sabaf S.p.A.
Legal status: Joint-stock company (S.p.A.)
Domicile of entity: It aly
Registered and administrative office: Vi a d ei Ca rpi ni , 1 – 2 50 35 Osp it al ett o ( BS ) - It a ly
Main place of business: Vi a d ei C ar pi ni, 1 – 25 035 O sp ita let to (B S ) - I ta ly
Country of registration: Italy
Contacts: Tel: +39 030 - 6843001
Fax: +39 030 - 6848249
E-mail: info@sabaf.it
Web site: www.sabafgroup.com
Tax information: REA Brescia 347512
Tax Code 03244470179
VAT number 01786910982
Type of business:
Sabaf Group | Consolidated financial statements at 31 December 2021
76
Appendix
Information as required by Art. 149-
duodecies
of the CONSOB Issuers’
Regulation
The following table, prepared pursuant to Art. 149-
duodecies
of the CONSOB Issuers’
Regulation, shows fees relating to 2021 for auditing and for services other than auditing
provided by the Independent Auditors and their network.
(in thousands of Euro)
Party providing the
service
Recipient
Fees pertaining to the
2021 financial year
Audit
EY S.p.A.
Parent company
35
EY S.p.A.
Italian subsidiaries
41
EY network
Foreign subsidiaries
54
Other services
EY S.p.A.
Parent company
33
(1)
EY S.p.A.
Italian subsidiaries
4
(2)
Total
167
(1)
Auditing procedures agreement relating to interim management reports; limited review of Disclosure of non-
financial information.
(2)
Certification of IRES credit and tax credit for research and development.
Sabaf Group | Consolidated financial statements at 31 December 2021
77
Certification of the Consolidated Financial Statements, in accordance with
Art. 154 bis of Legislative Decree 58/98
Pietro Iotti, the Chief Executive Officer, and Gianluca Beschi, the Financial
Reporting Officer of Sabaf S.p.A., have taken into account the requirements of Art.
154-bis, paragraphs 3 and 4, of Legislative Decree 58 of 24 February 1998 and can
certify:
• the adequacy, in relation to the business characteristics and
• the actual application
of the administrative and accounting procedures for the formation of the
consolidated financial statements during the 2021 financial year.
They also certify that:
• the Consolidated financial statements:
- were prepared in accordance with the international accounting
policies recognised in the European Community in accordance
with EC regulation 1606/2002 of the European Parliament and
Council of 19 July 2002 and with the measures issued in
implementation of Art. 9 of Legislative Decree 38/2005;
- are consistent with accounting books and records;
- provide a true and fair view of the operating results, financial
position and cash flows of the issuer and of the companies included
in the consolidation;
• the report on operations contains a reliable analysis of the performance
and results of operations and the situation of the issuer and the companies
included in the scope of consolidation, along with a description of the key
risks and uncertainties to which they are exposed.
Ospitaletto, 22 March 2022
Chief Executive Officer
Pietro Iotti
The Financial Reporting
Officer
Gianluca Beschi
Sabaf S.p.A | Separate financial statements at 31 December 2021
78
SABAF S.p.A.
SEPARATE FINANCIAL STATEMENTS
AT 31 DECEMBER 2021
Sabaf S.p.A | Separate financial statements at 31 December 2021
79
CORPORATE BODIES
Honorary Chairman
Giuseppe Saleri
Board of Directors
Chairman
Claudio Bulgarelli
Vice Chairman (*)
Nicla Picchi
Chief Executive Officer
Pietro Iotti
Director
Gianluca Beschi
Director
Cinzia Saleri
Director
Alessandro Potestà
Director (*)
Carlo Scarpa
Director (*)
Daniela Toscani
Director (*)
Stefania Triva
(*) Independent directors
Board of Statutory Auditors
Chairman
Alessandra Tronconi
Statutory Auditor
Alessandra Zunino de Pignier
Statutory Auditor
Mauro Vivenzi
Independent Auditors
EY S.p.A.
Sabaf S.p.A | Separate financial statements at 31 December 2021
80
Statement of financial position
(in
€
)
NOTES
31/12/2021
31/12/2020
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
1
48,593,970
48,662,264
Investment property
2
2,311,476
3,252,696
Intangible assets
3
3,778,108
2,315,819
Equity investments
4
84,512,138
65,524,289
Non-current financial assets
5
10,707,311
5,537,324
- of which from related parties
35
10,707,311
5,537,324
Non-current receivables
31,853
31,421
Deferred tax assets
21
3,322,620
3,891,955
Total non-current assets
153,257,475
129,215,768
CURRENT ASSETS
Inventories
6
33,985,939
21,512,333
Trade receivables
7
45,194,276
45,024,596
- of which from related parties
35
15,210,599
16,048,130
Tax receivables
8
1,462,789
1,254,041
- of which from related parties
35
766,557
316,208
Other current receivables
9
1,929,121
1,947,372
Current financial assets
10
1,172,947
1,359,993
Cash and cash equivalents
11
29,733,148
1,594,861
Total current assets
113,478,220
72,693,196
ASSETS HELD FOR SALE
0
0
TOTAL ASSETS
266,735,695
201,908,964
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY
Share capital
12
11,533,450
11,533,450
Retained earnings, Other reserves
92,831,829
91,985,093
Profit for the year
10,043,877
6,409,674
Total shareholders’ equity
114,409,156
109,928,218
NON-CURRENT LIABILITIES
Loans
14
82,515,298
26,891,000
Other financial liabilities
15
0
0
Post-employment benefit and retirement provisions
16
1,779,634
1,929,190
Provisions for risks and charges
17
851,081
853,650
Deferred tax liabilities
21
323,942
230,450
Total non-current liabilities
85,469,955
29,904,290
CURRENT LIABILITIES
Loans
14
19,010,029
23,996,484
Other financial liabilities
15
1,393,611
1,560,111
Trade payables
18
33,677,766
26,204,071
- of which to related parties
35
1,533,149
1,074,716
Tax payables
19
3,374,435
2,458,942
- of which to related parties
35
54,720
350,721
Other payables
20
9,400,743
7,856,847
Total current liabilities
66,856,584
48,646,143
LIABILITIES HELD FOR SALE
0
0
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
266,735,695
201,908,964
Sabaf S.p.A | Separate financial statements at 31 December 2021
81
Income statement
NOTES
2021
2020
(in
€
)
INCOME STATEMENT COMPONENTS
OPERATING REVENUE AND INCOME
Revenue
23
144,033,787
102,583,189
- of which from related parties
35
20,212,450
15,221,230
Other income
24
6,195,079
5,647,168
Total operating revenue and income
150,228,866
108,230,357
OPERATING COSTS
Materials
25
(72,122,067)
(43,270,717)
- of which by related parties
3,315,935
1,935,572
Change in inventories
12,473,605
1,650,153
Services
26
(34,254,138)
(22,208,703)
- of which by related parties
35
(446,675)
(457,769)
Personnel costs
27
(34,780,110)
(28,567,152)
Other operating costs
28
(727,503)
(1,307,048)
Costs for capitalised in-house work
2,259,389
1,293,579
Total operating costs
(127,150,823)
(92,409,888)
OPERATING PROFIT BEFORE DEPRECIATION AND
AMORTISATION,
CAPITAL GAINS/LOSSES, WRITE-DOWNS/WRITE-BACKS
OF NON-CURRENT ASSETS
23,078,043
15,820,469
Depreciations and amortisation
1,2,3
(9,179,378)
(9,414,020)
Capital gains/(losses) on disposal of non-current assets
238,136
964,788
Write-downs/write-backs of non-current assets
4
(300,000)
(761,407)
- of which by related parties
(300,000)
(620,000)
EBIT
13,836,801
6,609,830
Financial income
318,425
201,591
- of which from related parties
255,441
176,889
Financial expenses
29
(530,464)
(717,703)
Exchange rate gains and losses
30
426,824
(398,970)
Profits and losses from equity investments
31
175,504
609,252
- of which from related parties
175,504
609,252
PROFIT BEFORE TAXES
14,227,088
6,304,001
Income taxes
32
(4,183,212)
105,674
PROFIT FOR THE YEAR
10,043,877
6,409,674
Sabaf S.p.A | Separate financial statements at 31 December 2021
82
Comprehensive income statement
2021
2020
(in
€
)
PROFIT FOR THE YEAR
10,043,877
6,409,674
Total profits/losses that will not be subsequently
reclassified under profit (loss) for the year
Actuarial evaluation of post-employment benefit
3,334
(31,418)
Tax effect
(800)
7,540
Total profits/losses that will not be subsequently
reclassified under profit (loss) for the year
Hedge accounting for derivative financial instruments
(198,499)
0
Total other profits/(losses) net of taxes for the year
(195,965)
(23,878)
TOTAL PROFIT
9,847,912
6,385,796
Sabaf S.p.A | Separate financial statements at 31 December 2021
83
Statement of changes in shareholders' equity
(
€
/000)
Share
Capital
Share
premium
reserve
Legal
reserve
Treasury
shares
Actuarial
evaluation of
post-
employment
benefit
provision
Other
reserves
Profit
for the year
Total
shareholders’
equity
Balance at 31 December 2019
11,533
10,002
2,307
(2,268)
(505)
83,864
3,822
108,755
Allocation of 2019 profit
3,822
(3,822)
0
2020 dividend payment
(3,924)
(3,924)
Purchase of treasury shares
(2,073)
(2,073)
Stock grant plan (IFRS 2)
658
658
Hedge accounting reserve
127
127
Total profit at
31 December 2020
(24)
6,409
6,385
Balance at 31 December 2020
11,533
10,002
2,307
(4,341)
(529)
84,547
6,409
109,928
Allocation of 2020 profit:
- Payment of dividends
(6,172)
(6,172)
- to the extraordinary
reserve
237
(237)
0
Stock grant plan (IFRS 2)
805
805
Treasury share transactions
437
(437)
0
Total profit at
31 December 2021
2
(198)
10,044
9,848
Balance at 31 December 2021
11,533
10,002
2,307
(3,904)
(526)
84,953
10,044
114,409
Sabaf S.p.A | Separate financial statements at 31 December 2021
84
Statement of Cash Flows
(
€
/000)
2021 FY
2020 FY
Cash and cash equivalents at beginning of year
1,595
8,343
Profit for the year
10,044
6,410
Adjustments for:
- Depreciations and amortisation
9,179
9,414
- Realised gains
(238)
(965)
- Write-downs of non-current assets
300
761
- Profits and losses from equity investments
(176)
(609)
- Valuation of the stock grant plan
805
657
- Net financial income and expenses
212
516
- Non-monetary foreign exchange differences
(340)
(199)
- Income tax
4,183
(106)
Change in post-employment benefit
(147)
(166)
Change in risk provisions
3
569
Change in trade receivables
(170)
(16,461)
Change in inventories
(12,474)
(1,650)
Change in trade payables
7,474
10,470
Change in net working capital
(5,170)
(7,642)
Change in other receivables and payables, deferred taxes
487
1,599
Payment of taxes
(1,738)
(141)
Payment of financial expenses
(530)
(710)
Collection of financial income
318
201
Cash flows from operations
17,187
9,590
Investments in non-current assets
- intangible
(1,934)
(383)
- tangible
(9,288)
(7,652)
- financial
(19,288)
(8,974)
Disposal of non-current assets
2,103
3,628
Cash flow absorbed by investments
(28,407)
(13,381)
Free cash flow
(11,220)
(3,791)
Repayment of loans
(23,032)
(11,982)
Raising of loans
73,229
12,811
Change in financial assets
(4,842)
1,602
Purchase/Sale of treasury shares
-
(2,073)
Payment of dividends
(6,172)
(3,924)
Collection of dividends
175
609
Cash flow absorbed by financing activities
39,358
(2,957)
Total cash flows
28,138
(6,748)
Cash and cash equivalents at end of year (Note 11)
29,733
1,595
Sabaf S.p.A | Separate financial statements at 31 December 2021
85
EXPLANATORY NOTES
ACCOUNTING STANDARDS
Statement of compliance and basis of presentation
The separate financial statements of Sabaf S.p.A. for the financial year 2021 have been prepared
in compliance with the International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB) and adopted by the European Union.
Reference to IFRS also includes all current International Accounting Standards (IAS).
The separate financial statements are drawn up in euro, which is the currency in the economy
in which the Company operates. The income statement, the comprehensive income statement
and the statement of financial position schedules are prepared in euro, while the statement of
cash flows, the statement of changes in shareholders’ equity and the values reported in the
explanatory notes are in thousands of euro.
The financial statements have been prepared on a historical cost basis except for some
revaluations of property, plant and equipment undertaken in previous years, and are considered
a going concern. With reference to this assumption, the Company assessed that it is a going
concern (as defined by paragraphs 25 and 26 of IAS 1), also due to the strong competitive
position, high profitability and solidity of the financial structure.
Sabaf S.p.A., as the Parent Company, also prepared the consolidated financial statements of the
Sabaf Group at 31 December 2021.
Financial statements
The Company adopted the following formats:
• current and non-current assets and current and non-current liabilities are stated
separately in the statement of the financial position;
• an income statement that expresses costs using a classification based on the nature of
each item;
• a comprehensive income statement that expresses revenue and expense items not
recognised in profit for the year as required or permitted by IFRS;
• a statement of cash flows that presents cash flows originating from operating activity,
using the indirect method.
Use of these formats permits the most meaningful representation of the Company’s capital,
business and financial status.
Accounting policies
The accounting standards and policies applied for the preparation of the separate financial
statements at 31 December 2021, unchanged versus the previous year, are shown below:
Property, plant and equipment
These are recognised at purchase or manufacturing cost. The cost includes directly chargeable
ancillary costs. These costs also include revaluations undertaken in the past based on monetary
revaluation rules or pursuant to company mergers.
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86
Depreciation is calculated according to rates deemed appropriate to spread the carrying value
of tangible assets over their useful working life. Estimated useful working life in years, unchanged
compared to previous financial years, is as follows:
Buildings
33
Light constructions
10
General plant
10
Specific plant and machinery
6 – 10
Equipment
4
Furniture
8
Electronic equipment
5
Vehicles and other transport means
5
Ordinary maintenance costs are expensed in the year in which they are incurred; costs that
increase the asset value or useful working life are capitalised and depreciated according to the
residual possibility of utilisation of the assets to which they refer.
Land is not depreciated.
Adoption of the accounting standard IFRS 16 “Leases”
The Company applied IFRS 16 from 1 January 2019 by using the amended retrospective
approach.
In adopting IFRS 16, the Company made use of the exemption granted in paragraph 5 a) in
relation to leases with a duration of less than 12 months (known as short-term leases) and the
exemption granted in paragraph 5 b) in relation to lease agreements whose underlying asset is
a low-value asset. For these agreements, lease payments are recognised in the income statement
on a straight-line basis for the duration of the respective agreements.
When evaluating the lease liabilities, Sabaf S.p.A. discounted the payments due for the lease
using the incremental borrowing rate at 1 January 2019. The weighted average of the applied
rate was 1.5% on 1 January 2021 and on 31 December 2021.
The lease term is calculated based on the non-cancellable period of the lease, including the
periods covered by the option to extend or to terminate the lease if it is reasonably certain that
those options will be exercised or not exercised, taking account of all relevant factors that create
an economic incentive relating to those decisions.
Investment property
Investment property is valued at cost, including revaluations undertaken in the past based on
monetary revaluation rules or pursuant to company mergers.
The depreciation is calculated based on the estimated useful life, considered to be 33 years.
If the recoverable amount of the investment property – determined based on the market value
of the properties – is estimated to be lower than its carrying value, the asset’s carrying value is
reduced to the lower recoverable amount, recognising impairment in the income statement.
When there is no longer any reason for a write-down to be maintained, the carrying value of the
asset (or cash generating unit) is increased to the new value stemming from the estimate of its
recoverable amount – but not beyond the net carrying value that the asset would have had if it
had not been written down for impairment. Reversal of impairment loss is recognised in the
Sabaf S.p.A | Separate financial statements at 31 December 2021
87
income statement.
Intangible assets
As established by IAS 38, intangible assets acquired or internally produced are recognised as
assets when it is probable that use of the asset will generate future economic benefits and when
asset cost can be measured reliably. If it is considered that these future economic benefits will
not be generated, the development costs are written down in the year in which this is
ascertained.
Such assets are measured at purchase or production cost and - if the assets concerned have a
finite useful life - are amortised on a straight-line basis over their estimated useful life.
The useful life of projects for which development costs are capitalised is estimated to be 10
years.
The SAP management system is amortised over five years.
Equity investments
Equity investments in subsidiaries, associates and joint-ventures are stated in the accounts at
cost. In accordance with IAS 36, the value recognised in the financial statements is subject to
an impairment test if there are indications of possible impairment.
Equity investments in companies other than subsidiaries, associates and joint ventures are
classified as financial assets measured at fair value, which normally corresponds to the
transaction price including directly attributable transaction costs. Subsequent changes in fair
value are recognised in the Income statement (FVPL) or, if the option is exercised in accordance
with the standard, in the Statement of comprehensive income (FVOCI) under the heading
"Instrument reserve at FVOCI".
Impairment
At each end of the reporting period, Sabaf S.p.A. reviews the carrying value of its property, plant
and equipment, intangible assets and equity investments to determine whether there are signs
of impairment of these assets. If there is any such indication, the recoverable amount of said
assets is estimated so as to determine the total of the write-down. If it is not possible to estimate
the recoverable amount individually, the Company estimates the recoverable amount of the
cash generating unit (CGU) to which the asset belongs. In particular, the recoverable amount of
the cash generating units (which generally coincide with the legal entity to which the capitalised
assets refer) is verified by determining the value of use. The recoverable amount is the higher of
the net selling price and value of use. In measuring the value of use, future cash flows net of
taxes, estimated based on past experience, are discounted to their present value using a pre-tax
rate that reflects current market valuations of the present cost of money and specific asset risk.
The main assumptions used for calculating the value of use concern the discount rate, growth
rate, expected changes in selling prices and cost trends during the period used for the
calculation. The growth rates adopted are based on future market expectations in the relevant
sector. Changes in the sales prices are based on past experience and on the expected future
changes in the market. The Company prepares operating cash flow forecasts based on the most
recent budgets approved by the Boards of Directors of the investees, draws up four-year
forecasts and determines the terminal value (current value of perpetual income), which
expresses the medium- and long-term operating flows in the specific sector.
Furthermore, the Company checks the recoverable amount of its investees at least once a year
when the separate financial statements are prepared.
If the recoverable amount of an asset (or CGU) is estimated to be lower than its carrying value,
the asset’s carrying value is reduced to the lower recoverable amount, recognising impairment
Sabaf S.p.A | Separate financial statements at 31 December 2021
88
of value in the income statement.
When there is no longer any reason for a write-down to be maintained, the carrying value of the
asset (or cash generating unit) is increased to the new value stemming from the estimate of its
recoverable amount – but not beyond the net carrying value that the asset would have had if it
had not been written down for impairment. Reversal of impairment loss is recognised in the
income statement.
Inventories
Inventories are measured at the lower of purchase or production cost – determined using the
weighted average cost method – and the corresponding fair value represented by the
replacement cost for purchased materials and by the presumed realisable value for finished and
semi-processed products – calculated taking into account any manufacturing costs and direct
selling costs yet to be incurred. Inventory cost includes accessory costs and the portion of direct
and indirect manufacturing costs that can reasonably be assigned to inventory items. Inventories
subject to obsolescence and low turnover are written down in relation to their possibility of use
or realisation. Inventory write-downs are derecognised in subsequent years if the reasons for
such write-downs cease to exist.
Trade receivables and other financial assets
Initial recognition
Upon initial recognition, financial assets are classified, as the case may be, on the basis of
subsequent measurement methods, i.e. at amortised cost, at fair value recognised in other
comprehensive income (OCI) and at fair value recognised in the income statement.
The classification of financial assets at initial recognition depends on the characteristics of the
contractual cash flows of the financial assets and on the business model that the Company uses
to manage them.
Trade receivables that do not contain a significant financing component are valued at the
transaction price determined in accordance with IFRS 15. See the “Revenue from Contracts with
Customers” paragraph.
Other financial assets are recognised at fair value plus, in the case of a financial asset not at fair
value recognised in the income statement, transaction costs.
For a financial asset to be classified and measured at amortised cost or at fair value recognised
in OCI, it must generate cash flows that depend solely on the principal and interest on the
amount of principal to be repaid (known as ‘solely payments of principal and interest (SPPI)’).
This measurement is referred to as the SPPI test and is carried out at the instrument level.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below.
Financial assets at amortised cost (debt instruments)
This category is the most important for the Company. The Company measures the financial
assets at amortised cost if both of the following requirements are met:
• the financial asset is held as part of a business model whose objective is to hold financial
assets for the purpose of collecting contractual cash flows
and
• the contractual terms of the financial asset envisage, at certain dates, cash flows represented
solely by payments of principal and interest on the amount of principal to be repaid.
Financial assets at amortised cost are subsequently measured using the effective interest method
and are subject to impairment
.
Gains and losses are recognised in the income statement when
the asset is derecognised, modified or revalued.
Financial assets at amortised cost of the Company include trade receivables.
Sabaf S.p.A | Separate financial statements at 31 December 2021
89
Financial assets at fair value through profit or loss
This category includes all assets held for trading, assets designated at initial recognition as
financial assets measured at fair value with changes recognised in the income statement, or
financial assets that must be measured at fair value. Assets held for trading are all those assets
acquired for sale or repurchase in the short term. Derivatives, separated or otherwise, are
classified as financial instruments held for trading, unless they are designated as effective
hedging instruments. Financial assets with cash flows that are not represented solely by principal
and interest payments are classified and measured at fair value through profit or loss, regardless
of the business model. Financial instruments at fair value with changes recognised in the income
statement are recognised in the statement of financial position at fair value and net changes in
fair value through profit or loss. This category includes derivative instruments.
The Company does not hold financial assets at fair value through profit or loss with
reclassification of cumulative gains and losses or financial assets at fair value through profit or
loss without reversal of cumulative gains and losses upon derecognition.
Derecognition
A financial asset (or, if applicable, part of a financial asset or part of a group of similar financial
assets) is firstly written off (e.g. removed from the statement of financial position of the
Company) when:
the rights to receive cash flows from the asset are extinguished, or
the Company transferred to a third party the right to receive financial flows from the asset or
has taken on the contractual obligation to pay them fully and without delay and (a) transferred
substantially all the risks and benefits of the ownership of the financial asset or (b) did not
substantially transfer or retain all the risks and benefits of the asset, but transferred their
control.
If the Company has transferred the rights to receive financial flows from an asset or has signed
an agreement on the basis of which it retains the contractual rights to receive the cash flows of
the financial asset, but assumes a contractual obligation to pay the financial flows to one or more
beneficiaries (pass-through), it considers whether or to what extent it has retained the risks and
benefits concerning the ownership. If it has not substantially transferred or retained all the risks
and benefits or has not lost control over it, the asset continued to be recognised in the financial
statements of the Company to the extent of its residual involvement in the asset itself. In this
case, the company also recognises an associated liability. The transferred asset and the
associated liability are measured in such a way as to reflect the rights and obligations that pertain
to the Company. When the residual involvement of the entity is a guarantee in the transferred
asset, the involvement is measured based on the amount of the asset or the maximum amount
of the consideration received that the entity could be obliged to pay, whichever lower.
Provisions for risks and charges
Provisions for risks and charges are provisioned to cover losses and debts, the existence of which
is certain or probable, but whose amount or date of occurrence cannot be determined at the end
of the year. Provisions are stated in the statement of financial position only when a legal or
implicit obligation exists that determines the use of resources with an impact on profit and loss
to meet that obligation and the amount can be reliably estimated. If the effect is significant, the
provisions are calculated by updating future cash flows estimated at a rate including taxes such
as to reflect current market valuations of the current value of the cash and specific risks
associated with the liability.
Sabaf S.p.A | Separate financial statements at 31 December 2021
90
Post-employment benefit
The post-employment benefit is provisioned to cover the entire liability accruing vis-à-vis
employees in compliance with current legislation and with national and supplementary
company collective labour contracts. This liability is subject to revaluation via application of
indices fixed by current regulations. Up to 31 December 2006, post-employment benefits were
considered defined-benefit plans and accounted for in compliance with IAS 19, using the
projected unit-credit method. The regulations of this fund were amended by Law no. 296 of 27
December 2006 and subsequent Decrees and Regulations issued during the first months of 2007.
In the light of these changes, and, in particular, for companies with at least 50 employees, post-
employment benefits must now be considered a defined-benefit plan only for the portions
accruing before 1 January 2007 (and not yet paid as at the end of the reporting period).
Conversely, portions accruing after that date are treated as defined-contribution plans.
Actuarial gains or losses are recognised immediately under "Other total profits/(losses)".
Trade payables and other financial liabilities
Initial recognition
All financial liabilities are initially recognised at fair value, in addition to directly attributable
transaction costs in case of mortgages, loans and payables.
The Company's financial liabilities include trade payables and other payables, mortgages and
loans, including current account overdrafts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value with changes recognised in the income statement include
liabilities held for trading and financial liabilities initially recognised at fair value, with changes
recognised in the income statement. Liabilities held for trading are those liabilities acquired in
order to discharge or transfer them in the short term. This category also includes derivative
financial instruments subscribed by the Company and not designated as hedging instruments in
a hedging relationship pursuant to IFRS 9. Embedded derivatives, separated from the main
contract, are classified as financial instruments held for trading, unless they are designated as
effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the
income statement. Financial liabilities are designated at fair value with changes recognised in
the income statement from the date of initial recognition, only if the criteria of IFRS 9 are met.
Loans and payables
This is the most important category for the Company and includes interest-bearing payables
and loans. After initial statement, loans are valued using the amortised cost approach, applying
the effective interest rate method. Gains and losses are recognised in the income statement
when the liability is discharged, as well as through the amortisation process. Amortised cost is
calculated by recognising the discount or premium on the acquisition and the fees or costs that
are an integral part of the effective interest rate. Amortisation at the effective interest rate is
included in financial expenses in the income statement.
Derecognition
A financial liability is derecognised when the obligation underlying the liability is discharged,
cancelled or fulfilled. If an existing financial liability is replaced by another from the same lender,
Sabaf S.p.A | Separate financial statements at 31 December 2021
91
at substantially different conditions, or if the conditions of an existing liability are substantially
changed, this replacement or change is treated as a derecognition of the original liability
accompanied by the recognition of a new liability, with any differences between the carrying
values recognised in the income statement.
Policy for conversion of foreign currency items
Receivables and payables originally expressed in foreign currencies are converted into euro at
the exchange rates in force on the date of the transactions originating them. Forex differences
realised upon collection of receivables and payment of payables in foreign currency are posted
in the income statement. Income and costs relating to foreign-currency transactions are
converted at the rate in force on the transaction date.
At year-end, assets and liabilities expressed in foreign currencies are posted at the spot exchange
rate in force at the end of the reporting period and related foreign exchange gains and losses are
posted in the income statement. If conversion generates a net gain, this value constitutes a non-
distributable reserve until it is effectively realised.
Derivative instruments and hedge accounting
The Company’s business is exposed to financial risks relating to changes in exchange rates,
commodity prices and interest rates. The Company may decide to use derivative financial
instruments to hedge these risks.
Derivatives are initially recognised at cost and are then adjusted to fair value on subsequent
closing dates.
Changes in the fair value of derivatives designated and recognised as effective for hedging future
cash flows relating to the Company’s contractual commitments and planned transactions are
recognised directly in shareholders' equity, while the ineffective portion is immediately posted
in the income statement. If the contractual commitments or planned transactions materialise in
the recognition of assets or liabilities, when such assets or liabilities are recognised, the gains or
losses on the derivative that were directly recognised in equity are factored back into the initial
valuation of the cost of acquisition or carrying value of the asset or liability. For cash flow hedges
that do not lead to recognition of assets or liabilities, the amounts that were directly recognised
in equity are included in the income statement in the same period when the contractual
commitment or planned transaction hedged impacts profit and loss – for example, when a
planned sale actually takes place.
For effective hedges of exposure to changes in fair value, the item hedged is adjusted for the
changes in fair value attributable to the risk hedged and recognised in the income statement.
Gains and losses stemming from the derivative’s valuation are also posted in the income
statement.
Changes in the fair value of derivatives not designated as hedging instruments are recognised in
the income statement in the period when they occur.
Hedge accounting is discontinued when the hedging instrument expires, is sold or is exercised,
or when it no longer qualifies as a hedge. At this time, the cumulative gains or losses of the
hedging instrument recognised in equity are kept in the latter until the planned transaction
actually takes place. If the transaction hedged is not expected to take place, cumulative gains or
losses recognised directly in equity are transferred to the year’s income statement.
Embedded derivatives included in other financial instruments or contracts are treated as
separate derivatives when their risks and characteristics are not strictly related to those of their
host contracts and the latter are not measured at fair value with posting of related gains and
losses in the income statement.
Sabaf S.p.A | Separate financial statements at 31 December 2021
92
Revenue recognition
Revenue is recognised net of return sales, discounts, allowances and bonuses, as well as of the
taxes directly associated with sale of goods and rendering of services.
Sales revenue is recognised when the company has transferred the significant risks and benefits
associated with ownership of the goods and the amount of revenue can be reliably measured.
Revenues of a financial nature are recognised on an accrual basis.
Financial income
Finance income includes interest receivable on funds invested and income from financial
instruments, when not offset as part of hedging transactions. Interest income is recognised in
the income statement at the time of vesting, taking effective output into consideration.
Financial expenses
Financial expenses include interest payable on financial debt calculated using the effective
interest method and bank expenses. All the other financial expenses are recognised as costs for
the year in which they are incurred.
Income taxes for the year
Income taxes include all taxes calculated on the Company’s taxable income. Income taxes are
directly recognised in the income statement, with the exception of those concerning items
directly debited or credited to shareholders’ equity, in which case the tax effect is recognised
directly in shareholders’ equity. Other taxes not relating to income, such as property taxes, are
included among operating expenses. Deferred taxes are provisioned in accordance with the
global liability provisioning method. They are calculated on all temporary differences that
emerge from the taxable base of an asset or liability and its book value. Current and deferred
tax assets and liabilities are offset when income taxes are levied by the same tax authority and
when there is a legal right to settle on a net basis. Deferred tax assets and liabilities are measured
using the tax rates that are expected to be applicable in the years when temporary differences
will be realised or settled.
Dividends
Dividends are posted on an accrual basis when the right to receive them materialises, i.e. when
shareholders approve dividend distribution.
Treasury shares
Treasury shares are booked as a reduction of shareholders’ equity. The carrying value of
treasury shares and revenues from any subsequent sales are recognised in the form of changes
in shareholders’ equity.
Equity-settled transactions
Some of the Company employees receive part of the remuneration in the form of share-based
payments, therefore employees provide services in exchange for shares ("equity-settled
transactions"). The cost of equity-settled transactions is determined by the fair value at the date
on which the assignment is made using an appropriate measurement method, as explained in
more detail in Note 43.
This cost, together with the corresponding increase in shareholders' equity, is recognised under
personnel costs (Note 27) over the period in which the conditions relating to the achievement
of objectives and/or the provision of the service are met. The cumulative costs recognised for
such transactions at the end of each reporting period up to the vesting date are commensurate
Sabaf S.p.A | Separate financial statements at 31 December 2021
93
with the expiry of the vesting period and the best estimate of the number of equity instruments
that will actually vest.
Service or performance conditions are not taken into account when defining the fair value of the
plan at the assignment date. However, the probability of these conditions being met is taken
into account when defining the best estimate of the number of equity instruments that will vest.
Market conditions are reflected in the fair value at the assignment date. Any other condition
related to the plan that does not involve a service obligation is not considered to be a vesting
condition. Non-vesting conditions are reflected in the fair value of the plan and result in the
immediate recognition of the cost of the plan, unless there are also service or performance
conditions.
No cost is recognised for rights that do not vest in that the performance and/or service
conditions are not met. When the rights include a market condition or a non-vesting condition,
these are treated as if they had vested regardless of whether the market conditions or other non-
vesting conditions to which they are subject are met or not, it being understood that all other
performance and/or service conditions must be met.
If the conditions of the plan are changed, the minimum cost to be recognised is the fair value at
the assignment date in the absence of the change in the plan itself, on the assumption that the
original conditions of the plan are met. Moreover, a cost is recognised for each change that
results in an increase in total fair value of the payment plan, or that is in any case favourable for
employees; this cost is measured with reference to the date of change. When a plan is cancelled,
any remaining element of the plan's fair value is immediately expensed to the income statement.
Use of estimates
Preparation of the separate financial statements in accordance with IFRS requires management
to make estimates and assumptions that affect the carrying values of assets and liabilities and
the disclosures on contingent assets and liabilities at the end of the reporting period. Actual
results might differ from these estimates. Estimates are used to measure tangible and intangible
assets and investments subject to impairment testing, as described earlier, as well as to measure
the ability to recover prepaid tax assets, provisions for bad debts, for inventory obsolescence,
depreciation and amortisation, asset write-downs, employee benefits, taxes, other provisions.
Specifically:
Recoverability of value of tangible and intangible assets and investments
The procedure for determining impairment losses of tangible and intangible assets described in
“Impairment” implies – in estimating the value of use – the use of the Business Plans of investees,
which are based on a series of assumptions relating to future events and actions of the investees’
management bodies, which may not necessarily come about. In estimating market value,
however, assumptions are made on the expected trend in trading between third parties based
on historical trends, which may not actually be repeated.
Provisions for bad debts
Receivables are adjusted by the related bad debt provision to take into account their recoverable
amount. To determine the size of the write-downs, management must make subjective
assessments based on the documentation and information available regarding, among other
things, the customer’s solvency, as well as experience and historical payment trends.
Provisions for inventory obsolescence
Inventories subject to obsolescence and slow turnover are systematically measured and written
down if their recoverable value is less than their carrying value. Write-downs are calculated
Sabaf S.p.A | Separate financial statements at 31 December 2021
94
based on management assumptions and estimates, resulting from experience and historical
results.
Employee benefits
The current value of liabilities for employee benefits depends on a series of factors determined
using actuarial techniques based on certain assumptions. Assumptions concern the discount
rate, estimates of future salary increases, and mortality and resignation rates. Any change in the
above-mentioned assumptions might have an effect on liabilities for pension benefits.
Share-based payments
Estimating the fair value of share-based payments requires the determination of the most
appropriate valuation model, which depends on the terms and conditions under which these
instruments are granted. This also requires the identification of data to feed into the valuation
model, including assumptions about the exercise period of the options, volatility and dividend
yield. The Company uses a binomial model for the initial measurement of the fair value of share-
based payments with employees.
Income taxes
Determining liabilities for Company taxes requires the use of management valuations in relation
to transactions whose tax implications are not certain at the end of the reporting period.
Furthermore, the valuation of deferred taxes is based on income expectations for future years;
the valuation of expected income depends on factors that might change over time and have a
significant effect on the valuation of deferred tax assets.
Other provisions
When estimating the risk of potential liabilities from disputes, the Directors rely on
communications regarding the status of recovery procedures and disputes from the lawyers who
represent the Company in litigation. These estimates are determined taking into account the
gradual development of the disputes, considering existing exemptions.
Climate change
With reference to the potential impact of climate change and energy transition on the
Company's activities, the Management carries out targeted analyses to identify and manage the
main risks and uncertainties to which the Company is exposed, adapting the corporate strategy
accordingly. To date, these factors have not had a significant impact on the opinions and
estimates used in preparing these Separate Financial Statements.
COVID-19 pandemic
Management has reviewed the Company's exposure to the effects of the COVID-19 pandemic
and its impact on the Company's financial position, results and cash flows, especially with regard
to the recoverability of the value of intangible assets, the measurement of receivables, the
measurement of inventories and the management of financial risks, with a special reference to
credit and liquidity risks. The analysis carried out did not reveal any critical situations and the
factors related to the COVID-19 pandemic did not have a significant impact on the opinions and
estimates used in preparing these Separate Financial Statements.
Estimates and assumptions are regularly reviewed and the effects of each change immediately
reflected in the income statement.
Sabaf S.p.A | Separate financial statements at 31 December 2021
95
New accounting standards
Amendments to IFRS 4, IFRS 7, IFRS 9, IFRS 16 and IAS 39:
Interest rate benchmark
reform
The Financial Stability Board released the report "Reforming Major Interest Rate Benchmarks"
with recommendations to strengthen existing benchmark indexes, other potential interbank
market-based benchmark rates and develop alternative near-risk-free benchmark rates. The
European Parliament introduced a common framework to ensure the accuracy and integrity of
these indexes.
Following this Regulation, the IASB published the Reform of benchmark indexes for determining
interest rates in order to take into account the consequences of the reform on financial reporting
and so that companies can continue to comply with the provisions assuming that the existing
benchmark indexes are not changed as a result of the reform of interbank rates.
The amendments to the principles outlined provide a number of expedients, applicable to all
hedging relationships directly affected by the interest rate benchmark reform, i.e., if the reform
generates uncertainties about the timing and/or amount of cash flows based on benchmarks of
the hedged item or hedging instrument. These amendments had no impact on the Company's
separate financial statements.
Amendment to IFRS16:
Covid-19-Related Rent Concessions beyond 30 June 2021
On 31 March 2021, the IASB issued the document
"Covid-19-Related Rent Concessions beyond
30 June 2021 (Amendments to IFRS 16)"
by which it extends by one year the period of
application of the amendment to IFRS 16, issued in 2020, relating to the accounting for facilities
granted to lessees due to Covid-19. These changes that apply as from 1 April 2021 had no impact
on the Company’s separate financial statements.
IFRS and IFRIC accounting standards, amendments and interpretations approved by
the European Union, not yet universally applicable and not adopted early by the
Company at 31 December 2021
IFRS 17 “
Insurance Contracts”
In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS 17), a comprehensive new
standard on insurance contracts covering recognition and measurement, presentation and
disclosure. The overall objective of IFRS 17 is to present an accounting model for insurance
contracts that is more useful and consistent for insurers. This principle does not apply to the
Group.
Amendments to IAS 1
“Classification of Liabilities as Current or Non-current”
In January 2020, the IAS issued amendments to paragraphs 69-76 of IAS 1 to specify the
requirements for classifying liabilities as current or non-current. The amendments clarify what
is meant by the right to postpone an expiry, that the right to postpone must exist at the end of
the reporting period, that the classification is not affected by the likelihood that the entity will
exercise its right to postpone, that only if a derivative embedded in a convertible liability is itself
an equity instrument does the maturity of the liability have no impact on classification. The
amendments will be effective for financial years beginning on or after 1 January 2023 and must
be applied retrospectively. The Group is assessing the impact the changes will have on the
current situation.
Sabaf S.p.A | Separate financial statements at 31 December 2021
96
Amendments to IFRS 3
“Business Combinations”
The amendments are intended to update a reference in IFRS 3 to the previous version of the
IASB's Conceptual Framework (1989 Framework) without affecting the requirements of the
standard.
Amendments to IAS 16
“Property, Plant and Equipment”
The purpose of the amendments is not to allow the deduction from the cost of property, plant
and equipment of the amount received from the sale of goods produced in the test phase of the
asset. These sales revenues and related production costs will therefore be recognised in the
income statement.
Amendments to IAS 37
“Provisions, Contingent Liabilities and Contingent Assets”
The amendment clarifies that all costs directly attributable to the contract must be taken into
account when estimating the possible onerousness of a contract. Accordingly, the assessment
of whether a contract is onerous includes not only incremental costs (such as the cost of direct
material used in processing), but also all costs that the enterprise cannot avoid because it has
entered into the contract (such as, for example, the share of depreciation of machinery used for
the performance of the contract).
Amendments to
“Annual Improvements 2018-2020”
The amendments include amendments to the following principles:
▪ IFRS 1
“First-time Adoption of International Financial Reporting Standards – Subsidiary
as a first-time adopter”:
the amendment allows a subsidiary that chooses to apply
paragraph D16(a) of IFRS 1 to account for cumulative translation differences on the basis
of the amounts recognised by the parent company, taking into account the parent's date
of transition to IFRSs;
▪ IFRS 9 “
Financial Instruments”
: the amendments clarify what fees can be included in
measuring whether the terms of a new financial liability (or changes to an existing
financial liability) are materially different from the terms of the original financial liability;
▪ IAS 41
“Agriculture”
: the amendment removes the requirement to exclude cash flows
arising from taxation when measuring the fair value of assets within the scope of IAS 41;
▪ IFRS 16
“Leases”
: amendments to illustrative example no. 13.
All amendments will enter into force on 1 January 2022. Following the adoption of these
amendments, the directors do not expect a significant effect on the Company's separate financial
statements.
Sabaf S.p.A | Separate financial statements at 31 December 2021
97
Comments on the main items of the statement of financial position
1. PROPERTY, PLANT AND EQUIPMENT
Property
Plant and
equipment
Other assets
Assets under
construction
Total
Cost
At 31 December 2019
43,324
175,386
36,447
2,217
257,374
Increases
344
3,566
2,481
2,717
9,108
Disposals
-
(4,908)
(1,129)
-
(6,037)
Reclassification
-
1,449
260
(2,412)
(703)
At 31 December 2020
43,668
175,493
38,059
2,522
259,742
Increases
571
3,877
2,016
3,005
9,469
Disposals
(1,694)
(404)
-
(2,098)
Reclassification
223
1,108
38
(1,676)
(307)
At 31 December 2021
44,462
178,784
39,709
3,851
266,806
Accumulated
depreciation
18,531
154,288
33,084
-
205,903
At 31 December 2019
1,212
5,758
1,526
-
8,496
Depreciations for the
year
-
(3,391)
(69)
-
(3,460)
Derecognition due to
disposal
-
141
-
-
141
At 31 December 2020
19,743
156,796
34,541
-
211,080
Depreciations for the
year
1,258
5,558
1,562
-
8,378
Derecognition due to
disposal
-
(1,151)
(95)
-
(1,246)
Write-downs
-
-
-
-
-
At 31 December 2021
21,001
161,203
36,008
-
218,212
Net carrying value
At 31 December 2021
23,461
17,581
3,701
3,851
48,594
At 31 December 2020
23,925
18,697
3,518
2,522
48,662
The breakdown of the net carrying value of Property was as follows:
31/12/2021
31/12/2020
Change
Land
5,404
5,404
-
Industrial buildings
18,057
18,521
(464)
Total
23,461
23,925
(464)
Changes in property, plant and equipment resulting from the application of IFRS 16 are shown
below:
Property
Plant and
equipment
Other assets
Total
1 January 2021
256
-
665
921
Increases
-
-
275
275
Depreciations
(44)
-
(266)
(310)
At 31 December 2021
212
-
674
887
Sabaf S.p.A | Separate financial statements at 31 December 2021
98
The main investments in the financial year were aimed at adapting production capacity and
industrialising new products to significantly increase shares with certain strategic customers.
Investments in maintenance and replacement, so that production equipment is kept constantly
up to date and efficient, are systematic.
Decreases mainly relate to the disposal of machinery to other companies of the Sabaf Group.
Assets under construction include machinery under construction and advance payments to
suppliers of capital equipment.
At 31 December 2021, the Company found no endogenous or exogenous indicators of
impairment of its property, plant and equipment. As a result, the value of property, plant and
equipment was not submitted to impairment testing.
2. INVESTMENT PROPERTY
Cost
At 31 December 2019
11,835
Increases
-
Disposals
(552)
At 31 December 2020
11,283
Increases
-
Disposals
(1,107)
At 31 December 2021
10,176
Accumulated depreciations
At 31 December 2019
7,859
Depreciations for the year
420
Derecognition due to disposal
(249)
At 31 December 2020
8,030
Depreciations for the year
369
Derecognition due to disposal
(534)
At 31 December 2021
7,865
Net carrying value
At 31 December 2021
2,311
At 31 December 2020
3,253
This item includes non-operating buildings owned by the Company. Disposals during the period
resulted in a capital gain of approximately €109 thousand.
Changes in investment property resulting from the application of IFRS 16 are shown below:
Investment
property
1 January 2021
38
Depreciations
(35)
At 31 December 2021
3
Sabaf S.p.A | Separate financial statements at 31 December 2021
99
At 31 December 2021, the Company found no endogenous or exogenous indicators of
impairment of its investment property. As a result, the value of investment property was not
submitted to impairment testing.
3. INTANGIBLE ASSETS
Patents,
know-how and
software
Development
costs
Other
intangible
assets
Total
Cost
At 31 December 2019
6,790
5,848
635
13,273
Increases
269
413
6
688
Decreases
(85)
-
-
(85)
Reclassifications
-
(241)
-
(241)
At 31 December 2020
6,974
6,020
641
13,635
Increases
250
1,679
4
1,933
Decreases
(2)
-
(3)
(5)
Reclassifications
22
(58)
-
(36)
At 31 December 2021
7,244
7,641
642
15,527
Amortisation and
write-downs
At 31 December 2019
6,508
3,767
545
10,820
Amortisation
156
342
1
499
Decreases
-
-
-
-
At 31 December 2020
6,664
4,109
546
11,319
Amortisation
142
288
-
430
Decreases
-
-
-
-
At 31 December 2021
6,806
4,397
546
11,749
Net carrying value
At 31 December 2021
438
3,244
96
3,778
At 31 December 2020
310
1,911
95
2,316
Intangible assets have a finite useful life and, as a result, are amortised throughout their life.
In 2021, the Company set up a dedicated team to develop new solutions for home cooking, with
the aim of creating innovative products that meet the needs of manufacturers of household
appliances and new consumer trends. Investments in the development of gas parts continued,
mainly in relation to the expansion of the range of burners.
Increases in development costs include projects in progress and therefore not subject to
amortisation.
At 31 December 2021, the Company found no endogenous or exogenous indicators of
impairment of its intangible assets. As a result, the value of property, plant and equipment was
not submitted to impairment testing.
Sabaf S.p.A | Separate financial statements at 31 December 2021
100
4. EQUITY INVESTMENTS
31/12/2021
31/12/2020
Change
In subsidiaries
84,429
65,441
18,988
Other equity
investments
83
83
0
Total
84,512
65,524
18,988
The change in equity investments in subsidiaries is broken down in the table below:
Historical
cost
Faringosi
Hinges
Sabaf
do
Brasil
Sabaf
U.S.
Sabaf
Appliance
Components
(China)
Sabaf
Mexico
Sabaf
Turkey
A.R.C.
Okida
C.M.I.
Sabaf
India
Total
31/12/2019
10,329
8,469
139
4,900
0
12,005
4,800
8,782
13,392
-
62,816
Purchase
-
-
-
-
-
-
-
-
3,063
20
3,083
Share capital
increase
-
1,092
-
3,000
-
-
-
-
-
1,750
5,842
31/12/2020
10,329
9,561
139
7,900
0
12,005
4,800
8,782
16,455
1,770
71,741
Purchase
-
-
-
-
1
-
1,650
-
4,743
-
6,394
Share capital
increase
-
3,600
-
-
3,127
5,167
-
-
-
1,000
12,894
31/12/2021
10,329
13,161
139
7,900
3,128
17,172
6,450
8,782
21,198
2,770
91,029
Provision for write-downs
31/12/2019
0
0
0
4,900
0
0
0
0
0
0
4,900
Write-downs
-
-
-
1,400
-
-
-
-
-
-
1,400
31/12/2020
0
0
0
6,300
0
0
0
0
0
0
6,300
Write-downs
-
-
-
300
-
-
-
-
-
-
300
31/12/2021
0
0
0
6,600
0
0
0
0
0
0
6,600
Net carrying value
31/12/2021
10,329
13,161
139
1,300
3,128
17,172
6,450
8,782
21,198
2,770
84,429
31/12/2020
10,329
9,561
139
1,600
0
12,005
4,800
8,782
16,455
1,770
65,441
Portion of shareholders’ equity (calculated in compliance with IFRS)
31/12/2021
8,462
15,716
158
1,317
3,092
15,396
7,371
2,961
15,503
2,755
72,731
31/12/2020
7,462
10,561
108
1,597
0
19,534
4,349
3,294
7,763
1,671
56,339
Difference between shareholders’ equity and carrying value
31/12/2021
(1,867)
2,555
19
17
(36)
(1,776)
921
(5,821)
(5,695)
(15)
(11,698)
31/12/2020
(2,867)
1,000
(31)
(3)
0
7,529
(451)
(5,488)
(8,692)
(99)
(9,102)
Sabaf S.p.A | Separate financial statements at 31 December 2021
101
Faringosi Hinges s.r.l.
In 2021, the Faringosi Hinges achieved positive results - in terms of sales and profitability - both
compared to the previous year and compared to the budget. The 2022-2026 forward plan
prepared at the beginning of 2022 envisages a further increase in sales at moderate growth rates.
At 31 December 2021, Sabaf S.p.A. tested - with the support of independent experts - the
carrying value of the equity investment for impairment, determining its recoverable amount,
considered to be equivalent to its value of use plus available liquidity, by discounting expected
future cash flows in the forward plan drafted by the management. Cash flows for the period from
2022 to 2026 were augmented by the terminal value, which expresses the operating flows that
the investee is expected to generate from the sixth year to infinity and determined based on the
perpetual income. The management prepared a single plan for each CGU that represents the
normal expected scenario, with reference to the period from 2022 to 2026.
The development of forward plans and the calculation of the value in use were carried out
following an in-depth analysis that also considered the impact on profitability of the increase in
purchase costs and the possibility of transferring this increase to sales prices.
The value of use was calculated based on a discount rate (WACC) of 10.11% (8.62% in the
impairment test carried out while preparing the separate financial statements at 31 December
2020) and a growth rate (g) of 2%, unchanged from the 2020 impairment test.
The recoverable amount calculated on the basis of the above-mentioned assumptions and
valuation techniques is €14.431 million, compared with a carrying value of the equity investment
of €10.329 million; consequently, the amount recognised for equity investment at 31 December
2021 was deemed recoverable.
Sensitivity analysis
The recoverable amount of the equity investment was subjected to stress tests and sensitivity
analyses that also took into account economic parameters and as a result of which positive
results emerged. The table below shows the changes in recoverable amount depending on
changes in the WACC discount rate and growth factor g:
(
€
/000)
growth rate
discount rate
1.50%
1.75%
2.00%
2.25%
2.50%
9.11%
15,684
16,097
16,539
17,013
17,524
9.61%
14,680
15,036
15,416
15,822
16,256
10.11%
13,792
14,102
14,431
14,781
15,154
10.61%
13,002
13,273
13,560
13,865
14,188
11.11%
12,293
12,532
12,785
13,051
13,334
The table below shows the change in recoverable amount as EBITDA changes according to the
plan.
EBITDA
Accordin
g to the
plan
-10%
-20%
(
€
/000)
14,431
12,501
10,572
Sabaf S.p.A | Separate financial statements at 31 December 2021
102
Sabaf do Brasil
In 2021, Sabaf do Brasil continued to obtain positive results. Shareholders’ equity (converted
into euros at the end-of-year exchange rate) is higher than the carrying amount of the
investment.
Sabaf U.S.
The subsidiary Sabaf U.S. operates as a commercial support for North America.
The difference between the carrying value and the shareholders' equity of the investee is
attributable to the non-durable losses taking into consideration expected development on the
North American market.
Sabaf Appliance Components
Sabaf Appliance Components (Kunshan) Co., Ltd. has been producing burners for the Chinese
market since 2015. Furthermore, the company has performed the function as distributor on the
Chinese market of Sabaf products manufactured in Italy and Turkey. Low production volumes
have not allowed the company to reach the break-even point. During the financial year, the
shareholding was written down by €300 thousand against the loss of 2021.
Sabaf Beyaz Esya Parcalari Sanayi Ve Ticaret Limited Sirteki (Sabaf Turkey)
In 2021, Sabaf Turkey, a company active in the production of gas parts, recorded a strong sales
growth rate and a largely positive operating result. As a result of the strong devaluation of the
Turkish lira, the company recorded exchange rate losses from the conversion of euro-
denominated liabilities, which led to a negative net result.
A.R.C. s.r.l.
In June 2016, the Company acquired the controlling share (70%) of A.R.C. s.r.l., leading
company in the production of burners for professional cooking. The transaction allowed Sabaf
to enter into a new sector, contiguous with the traditional sector of components for household
gas cooking appliances, and to enhance the consolidated international presence of the Sabaf
Group. In October 2021, Sabaf S.p.A. completed the acquisition of the remaining 30% of the
share capital of A.R.C. s.r.l., following the exercise of the put option by the minority shareholder.
The fee was €1,650 thousand. As a result of the transaction, Sabaf S.p.A. now holds 100% of the
share capital of C.M.I. s.r.l.
A.R.C. s.r.l. performed well during the 2021 financial year in terms of both turnover and
profitability. The 2022-2026 forward plan envisages a further increase in sales at moderate
growth rates and almost stable margins.
At 31 December 2021, Sabaf S.p.A. tested - with the support of independent experts - the
carrying value of the equity investment for impairment, determining its recoverable amount,
considered to be equivalent to its value of use plus available liquidity, by discounting expected
future cash flows in the forward plan drafted by the management. Cash flows for the period from
2022 to 2026 were augmented by the terminal value, which expresses the operating flows that
the investee is expected to generate from the sixth year to infinity and determined based on the
perpetual income. The management prepared a single plan for each CGU that represents the
normal expected scenario, with reference to the period from 2022 to 2026.
The development of forward plans and the calculation of the value in use were carried out
following an in-depth analysis that also considered the impact on profitability of the increase in
purchase costs and the possibility of transferring this increase to sales prices.
The value of use was calculated based on a discount rate (WACC) of 6.93% (6.76% in the
impairment test carried out while preparing the Separate financial statements at 31 December
Sabaf S.p.A | Separate financial statements at 31 December 2021
103
2020) and a growth rate (g) of 2% (unchanged from the impairment test carried out while
preparing the separate financial statements at 31 December 2020).
The recoverable amount calculated on the basis of the above-mentioned assumptions and
valuation techniques is €23.079 million, compared with a carrying value of the equity investment
of €6.450 million; consequently, the amount recognised for equity investment at 31 December
2021 was deemed recoverable.
Sensitivity analysis
The recoverable amount of the equity investment was subjected to stress tests and sensitivity
analyses that also took into account economic parameters and as a result of which positive
results emerged. The table below shows the changes in recoverable amount depending on
changes in the WACC discount rate and growth factor g:
(
€
/000)
growth rate
discount rate
1.50%
1.75%
2.00%
2.25%
2.50%
5.93%
25,734
26,887
28,187
29,663
31,355
6.43%
23,425
24,333
25,344
26,475
27,751
6.93%
21,543
22,274
23,079
23,970
24,962
7.43%
19,980
20,579
21,234
21,951
22,742
7.93%
18,662
19,160
19,701
20,289
20,931
The table below shows the change in recoverable amount as EBITDA changes according to the
plan.
EBITDA
According
to the plan
-10%
-20%
(
€
/000)
23,079
14,449
12,743
Okida Elektronik Sanayi Limited Sirket
In 2018, the Company directly acquired 30% of Okida Elektronik (the remaining 70% was
acquired through the subsidiary Sabaf Turkey). Okida is a leader in Turkey in the design and
manufacture of electronic components for household appliances (mainly ovens and hoods); the
transaction allowed Sabaf to enter into a new sector, contiguous with the traditional sector of
components for household gas cooking appliances. Okida Elektronik performed extremely well
in 2021.
At 31 December 2021, the Company tested - with the support of independent experts - the
carrying value of the equity investment for impairment, determining its recoverable amount
considered to be equivalent to its value of use plus available liquidity, by discounting expected
future cash flows in the forward plan drafted by the management. Cash flows for the period from
2022 to 2026 were augmented by the terminal value, which expresses the operating flows that
the investee is expected to generate from the sixth year to infinity and determined based on the
perpetual income. The management prepared a single plan for each CGU that represents the
normal expected scenario, with reference to the period from 2022 to 2026.
The development of forward plans and the calculation of the value in use were carried out
following an in-depth analysis that also considered the impact on profitability of the increase in
purchase costs and the possibility of transferring this increase to sales prices. The value of use
was calculated based on a discount rate (WACC) of 15.21% (14.18% in the impairment test
Sabaf S.p.A | Separate financial statements at 31 December 2021
104
carried out while preparing the separate financial statements at 31 December 2020) and a
growth rate (g) of 2.50%, unchanged from the 2020 impairment test. The portion pertaining to
Sabaf S.p.A. of the recoverable amount calculated on the basis of the above-mentioned
assumptions and valuation techniques is €15.832 million (30% of total equity value), compared
with a carrying value of the equity investment of €8.782 million; consequently, the carrying value
recognised for equity investment at 31 December 2021 was deemed recoverable.
Sensitivity analysis
The recoverable amount of the equity investment was subjected to stress tests and sensitivity
analyses that also took into account economic parameters and as a result of which positive
results emerged. The table below shows the changes in recoverable amount depending on
changes in the WACC discount rate and growth factor g:
(
€
/000)
growth rate
discount rate
1.00%
1.25%
2.50%
1.75%
2.00%
14.21%
16,748
16,981
17,224
17,477
17,742
14.71%
16,068
16,279
16,499
16,728
16,967
15.21%
15,440
15,632
15,832
16,039
16,255
15.71%
14,859
15,034
15,215
15,444
15,600
16.21%
14,319
14,479
14,645
14,817
14,995
The table below shows the change in recoverable amount as EBITDA changes according to the
plan.
EBITDA
According
to the plan
-10%
-20%
(
€
/000)
15,832
14,068
12,303
C.M.I. s.r.l.
In July 2019, the Company acquired 68.5% of C.M.I. s.r.l., one of the main players in the design,
production and sale of hinges for household appliances. The acquisition of C.M.I. s.r.l. allowed
Sabaf to achieve a leadership position on a global scale in the hinge sector, proposing itself also
in this area as a reference partner for all manufacturers of household appliances. Sabaf S.p.A.
had acquired a further 15.75% stake in September 2020. In November 2021, Sabaf S.p.A. also
completed the acquisition of 15.75% of the share capital of C.M.I. s.r.l., following the exercise of
the second put option by the minority shareholder. The fee was €4,743 thousand. As a result of
the transaction, Sabaf S.p.A. now holds 100% of the share capital of C.M.I. s.r.l..
C.M.I. s.r.l. recognised a strong increase in turnover in 2021 compared to the previous year. The
positive trend is expected to continue for the period from 2022 to 2026, which forecasts further
sales at moderate growth rates. At 31 December 2021, the Company tested - with the support
of independent experts - the carrying value of the equity investment for impairment, determining
its recoverable amount considered to be equivalent to its value of use plus available liquidity, by
discounting expected future cash flows in the forward plan drafted by the management. Cash
flows for the period from 2022 to 2026 were augmented by the terminal value, which expresses
the operating flows that the investee is expected to generate from the sixth year to infinity and
determined based on the perpetual income. The management prepared a single plan for each
CGU that represents the normal expected scenario, with reference to the period from 2022 to
2026.
Sabaf S.p.A | Separate financial statements at 31 December 2021
105
The development of forward plans and the calculation of the value in use were carried out
following an in-depth analysis that also considered the impact on profitability of the increase in
purchase costs and the possibility of transferring this increase to sales prices. The value of use
was calculated based on a discount rate (WACC) of 11.31% (9.87% in the impairment test carried
out while preparing the Separate financial statements at 31 December 2020) and a growth rate
(g) of 2% (unchanged from that used for the impairment test carried out while preparing the
separate financial statements at 31 December 2020).
The recoverable amount calculated on the basis of the above-mentioned assumptions and
valuation techniques is €55.656 million, compared with a carrying value of the equity investment
of €21.198 million; consequently, the amount recognised for equity investment at 31 December
2021 was deemed recoverable.
Sensitivity analysis
The recoverable amount of the equity investment was subjected to stress tests and sensitivity
analyses that also took into account economic parameters and as a result of which positive
results emerged.
The table below shows the changes in recoverable amount depending on changes in the WACC
discount rate and growth factor g:
(
€
/000)
growth rate
discount rate
1.00%
1.25%
2.00%
1.75%
2.00%
10.31%
60,380
61,856
63,421
65,083
66,852
10.81%
56,649
57,946
59,316
60,766
62,303
11.31%
53,305
54,450
55,656
56,929
58,275
11.81%
50,289
51,306
52,375
53,499
54,685
12.31%
47,556
48,464
49,416
50,415
51,465
The table below shows the change in recoverable amount as EBITDA changes according to the
plan.
EBITDA
According
to the plan
-10%
-20%
(
€
/000)
55,656
50,334
41,649
Sabaf India Private Limited
During the 2020 financial year, a new company was set up in India with the aim of producing
gas parts for the local market, where strong growth is expected in the coming years. The impacts
of the pandemic caused a postponement in preparatory activities for the start of operations,
which is expected during 2022.
Sabaf Mexico S.A. de C.V.
During the 2021 financial year, a new company was established in Mexico. A plot of land was
acquired on which a new plant for the production of components for the North American market
will be built in 2022.
Sabaf S.p.A | Separate financial statements at 31 December 2021
106
5. NON-CURRENT FINANCIAL ASSETS
31/12/2021
31/12/2020
Change
Financial receivables from
subsidiaries
10,708
5,537
5,171
Total
10,708
5,537
5,171
At 31 December 2021, financial receivables from subsidiaries consist of:
- an interest-bearing loan of USD 2.5 million (€2.208 million at the end-of-year exchange rate),
granted to the subsidiary Sabaf do Brasil with the aim of optimising the Group's exposure to
foreign exchange rate risk with maturity March 2023;
- an interest-bearing loan of €8.5 million to the subsidiary Sabaf Turkey, of which €3.5 million
disbursed during 2018 and €5 million disbursed during 2021 as part of the coordination of the
Group's financial management, with maturity in August 2024 and April 2024, respectively.
6. INVENTORIES
31/12/2021
31/12/2020
Change
Raw Materials
13,381
9,062
4,319
Semi-processed goods
9,400
6,812
2,588
Finished products
12,990
7,374
5,616
Provision for inventory write-downs
(1,785)
(1,736)
(49)
Total
33,986
21,512
12,474
The value of final inventories at 31 December 2021 increased compared to the end of the
previous year to meet the higher volumes of activity. Moreover, in addition to the inflationary
effect of the significant increases in metal prices, the Company raised the level of safety stocks
to ensure continuity of production in a particularly turbulent scenario.
The provision for write-downs is mainly allocated for hedging the obsolescence risk, quantified
on the basis of specific analyses carried out at the end of the year on slow-moving and non-
moving products, and refers to raw materials for €487 thousand, semi-finished products for €328
thousand and finished products for €970 thousand. The following table shows the changes in
the Provision for inventory write-downs during the current financial year:
31/12/2020
1,736
Provisions
297
Utilisation
(248)
31/12/2021
1,785
7. TRADE RECEIVABLES
31/12/2021
31/12/2020
Change
Trade receivables from third parties
30,584
29,477
1,107
Trade receivables from subsidiaries
15,210
16,048
(838)
Bad debt provision
(600)
(500)
(100)
Net total
45,194
45,025
169
Sabaf S.p.A | Separate financial statements at 31 December 2021
107
At 31 December 2021, trade receivables included balances totalling USD 6,985 thousand,
booked at the EUR/USD exchange rate in effect on 31 December 2021, equal to 1.13260. The
amount of trade receivables recognised in the financial statements includes approximately €13
million in insured receivables (€17 million at 31 December 2020).
There were no significant changes in average payment terms agreed with customers.
Receivables assigned to factors without recourse are derecognised from the Statement of
Financial Position in that the reference contract provides for the assignment of ownership of the
receivables, together with ownership of the cash flows generated by the receivable, as well as of
all risks and benefits, to the assignee.
The following table shows the breakdown of receivables from third parties by maturity date:
31/12/2021
31/12/2020
Change
Current receivables (not past due)
27,304
27,784
(480)
Outstanding up to 30 days
1,844
1,026
818
Outstanding from 30 to 60 days
348
315
33
Outstanding from 60 to 90 days
211
100
111
Outstanding for more than 90 days
877
252
625
Total
30,584
29,477
1,107
The bad debt provision was adjusted to the better estimate of the credit risk and expected losses
at the end of the reporting period, also carried out by analysing each expired item. Changes
during the year were as follows:
31/12/2020
Provisions
Utilisation
31/12/2021
Bad debt provision
500
100
-
600
8. TAX RECEIVABLES
31/12/2021
31/12/2020
Change
For income tax
1,104
1,119
(15)
for VAT
359
135
224
Total
1,463
1,254
209
In the 2020 financial year, the Company has been part of the national tax consolidation scheme
pursuant to Articles 117/129 of the Unified Income Tax Law.
At 31 December 2021, income tax receivables include:
- the receivable from the subsidiary C.M.I. s.r.l. amounting to €457 thousand
- the receivable from the subsidiary Faringosi Hinges s.r.l amounting to €155 thousand
- the receivable from the subsidiary A.R.C. s.r.l. amounting to €155 thousand,
relating to the balance of the 2021 income taxes transferred by the subsidiaries to the
consolidating company Sabaf S.p.A., in accordance with the provisions of the tax regulations
relating to the national tax consolidation and the tax consolidation contracts entered into
between the parties.
Income tax receivables also include €352 thousand of receivables for investments in capital
equipment referred to Decree Law 160/2019 and Budget Law 178/2020.
Sabaf S.p.A | Separate financial statements at 31 December 2021
108
9. OTHER CURRENT RECEIVABLES
31/12/2021
31/12/2020
Change
Credits to be received from suppliers
1,240
658
582
Advances to suppliers
426
431
(5)
Due from INAIL
5
42
(37)
Other
258
816
(558)
Total
1,929
1,947
(18)
Credits to be received from suppliers mainly refer to bonuses paid to the Company for the
attainment for the year purchasing objectives, which were achieved in 2021 to a greater extent
than in the previous year.
10. CURRENT FINANCIAL ASSETS
31/12/2021
31/12/2020
Change
Restricted bank accounts
1,173
1,233
(60)
Currency derivatives
-
127
(127)
Total
1,173
1,360
(187)
At 31 December 2021, a term deposit of €1.173 million, due by 2022, for the portion of the price
not yet paid to the sellers of the C.M.I. equity investment and deposited as collateral in
accordance with the terms of the C.M.I. acquisition agreement.
11. CASH AND CASH EQUIVALENTS
The item Cash and cash equivalents, equal to €29,733 thousand at 31 December 2021 (€1,595
thousand at 31 December 2020), refers almost exclusively to bank current account balances.
12. SHARE CAPITAL
The Company’s share capital consists of 11,533,450 shares with a par value of €1.00 each. The
share capital paid in and subscribed did not change during the year.
At 31 December 2021, the structure of the share capital is shown in the table below.
No. of shares
% of share
capital
Rights and
obligations
Ordinary shares
8,376,760
72.63%
--
Ordinary shares with
increased vote
3,156,690
27.37%
Two voting
rights per share
TOTAL
11,533,450
100%
Sabaf S.p.A | Separate financial statements at 31 December 2021
109
With the exception of the right to increased vote, there are no rights, privileges or restrictions
on the Company. The availability of reserves is indicated in a table at the end of these
Explanatory Notes.
13. TREASURY SHARES AND OTHER RESERVES
With regard to the 2018 - 2020 Stock Grant Plan, following the expiry of the three-year vesting
period, during the first half of 2021, 34,946 ordinary shares of the Company were allocated and
transferred to the beneficiaries of Cluster 1, through the use of shares already available to the
issuer.
No other transactions on treasury shares were carried out during the year.
At 31 December 2021, the Company is the lawful owner of 311,802 treasury shares (2.703% of
the share capital), reported in the financial statements as an adjustment to shareholders’ equity
at a weighted average unit value of €12.52 (the closing stock market price of the Share at 31
December 2021 was €24.00). Further to what was reported in the Interim Management
Statement at 31 December 2021 published on 10 February 2022, it is confirmed that the
Company recovered the full availability of 311,802 treasury shares on 1 March 2022.
There were 11,221,648 outstanding shares at 31 December 2021 (11,186,702 at 31 December
2020).
The item "Retained earnings, other reserves" of €92,832 thousand included, at 31 December
2021:
▪ the stock grant reserve of €1,701 thousand, which included the measurement at 31
December 2021 of the fair value of rights assigned to receive Sabaf shares relating to the
following medium- and long-term incentive plans:
- 2018 - 2020 Stock Grant Plan, for rights related to Cluster 2 beneficiaries only;
- 2021 – 2023 Stock Grant Plan.
For details of the Stock Grant Plan, refer to Note 43;
▪ the hedge accounting reserve, negative for €71 thousand. The following table shows the
change in the Cash Flow Hedge reserve related to the application of IFRS 9 on derivative
contracts and referring to the recognition in net equity of the effective part of the
derivative contracts signed to hedge the foreign exchange rate risk for which the
Company applies hedge accounting.
Opening value at 31 December 2020
127
Change during the period
(198)
Value at 31 December 2021
(71)
The characteristics of the derivative financial instruments that gave rise to the cash flow
hedge reserve and the accounting effects on other items in the financial statements are
broken down in Note 35, in the paragraph Foreign exchange risk management
Sabaf S.p.A | Separate financial statements at 31 December 2021
110
14. LOANS
31/12/2021
31/12/2020
Current
Non-
current
Total
Current
Non-
current
Total
Leases
437
1,456
1,893
474
1,633
2,107
Unsecured loans
16,732
81,059
97,791
12,956
25,258
38,214
Short-term bank
loans
1,841
-
1,841
10,567
-
10,567
Total
19,010
82,515
101,525
23,997
26,891
50,888
In December 2021, Sabaf S.p.A. issued a €30 million bond fully subscribed by PRICOA with a
maturity of 10 years, an average life of 8 years and a fixed coupon of 1.85% per year. This issue
enabled the Company to diversify its sources of financing, improve financial flexibility and
significantly lengthen the average duration of its debt. The loan described has the following
covenants, defined with reference to the Group consolidated figures widely complied with at 31
December 2021 and for which, according to the Group's business plan, compliance is also
expected in subsequent years:
▪ commitment to maintain a ratio of net financial debt to shareholders’ equity of less than
1.5;
▪ commitment to maintain a ratio of net financial debt to EBITDA of less than 3;
▪ commitment to maintain a ratio of EBITDA to net financial position of more than 4.
During the year, the Company took out new unsecured loans for a total of €45 million. All loans
are signed with an original maturity of ranging from 5 to 6 years and are repayable in
instalments.
Some of the outstanding unsecured loans have covenants, defined with reference to the
consolidated financial statements at the end of the reporting period, as specified below:
- commitment to maintain a ratio of net financial position to shareholders’ equity of less
than 1 (residual amount of the loans at 31 December 2021 equal to €47.8 million)
- commitment to maintain a ratio of net financial position to EBITDA of less than 2.5
(residual amount of the loans at 31 December 2021 equal to €56.8 million)
widely complied with at 31 December 2021 and for which, according to the Group's business
plan, compliance is also expected in subsequent years.
All bank loans are denominated in euro, with the exception of a short-term loan of USD 2 million.
To manage interest rate risk, unsecured loans are either fixed-rate or hedged by IRS. In these
separate financial statements, "Other financial liabilities" (Note 15) includes the negative fair
value of the IRSs hedging rate risks of unsecured loans pending, for residual notional amounts
of approximately €33.4 million and expiry until 30 June 2027. Financial expenses were
recognised in the income statement with a balancing entry.
Sabaf S.p.A | Separate financial statements at 31 December 2021
111
The following table shows the changes in lease liabilities during the year:
Lease liabilities at 1 January 2020
2,047
New agreements signed during 2020
515
Repayments during 2020
(455)
Lease liabilities at 31 December 2020
2,107
New agreements signed during 2021
275
Repayments during 2021
(489)
Lease liabilities at 31 December 2021
1,893
Note 36 provides information on financial risks, pursuant to IFRS 7.
15. OTHER FINANCIAL LIABILITIES
31/12/2021
31/12/2020
Current
Non-current
Current
Non-current
Payables to A.R.C. shareholders
-
-
60
-
Payables to C.M.I. shareholders
1,173
-
1,173
-
Derivative instruments on interest
rates
72
-
327
-
Currency derivatives
149
-
-
Total
1,394
-
1,560
-
The payable to C.M.I. shareholders of €1,173 thousand at 31 December 2021, maturing during
2022, is related to the part of the price still to be paid to the Chinese group Guandong Xingye
Investment, seller of C.M.I., which was deposited on a non-interest-bearing restricted account
in accordance with contractual agreements and guarantees issued by the seller.
Currency derivatives refer to forward sales contracts recognised using hedge accounting. These
financial instruments are broken down in Note 35 - Forex risk management.
16. Post-employment benefit
At 31 December 2020
1,929
Financial expenses
4
Payments made
(150)
Tax effect
(3)
At 31 December 2021
1,780
Actuarial gains or losses are recognised immediately in the comprehensive income statement
("Other comprehensive income") under the item "Actuarial income and losses".
Sabaf S.p.A | Separate financial statements at 31 December 2021
112
Post-employment benefits are calculated as follows:
Financial assumptions
31/12/2021
31/12/2020
Discount rate
0.40%
0.23%
Inflation
1.30%
1.00%
Demographic theory
31/12/2021
31/12/2020
Mortality rate
IPS55 ANIA
IPS55 ANIA
Disability rate
INPS 2000
INPS 2000
Staff turnover
7%
6%
Advance payouts
2% per year
5% per year
Retirement age
Pursuant to legislation in
force at 31 December 2021
pursuant to legislation in
force on 31 December 2020
17. PROVISIONS FOR RISKS AND CHARGES
31/12/2020
Provisions
Utilisation
31/12/2021
Provision for agents’
indemnities
218
28
(1)
245
Product guarantee
fund
60
-
-
60
Provision for tax risks
-
500
-
500
Provision for legal
risks
576
-
(530)
46
Total
854
528
(531)
851
The provision for agents’ indemnities covers amounts payable to agents if the Company
terminates the agency relationship.
The product guarantee fund covers the risk of returns or charges by customers for products
already sold and, if necessary, is adjusted at the end of the financial year on the basis of analyses
carried out and past experience.
The fund was adjusted at the end of the year, on the basis of analyses conducted and past
experience.
At 31 December 2021, a provision of €500 thousand was recognised in the provisions for tax,
expressing the best estimate of the probable liability following the results of a tax audit on the
Company for the years from 2016 to 2018.
With regard to the provision for legal risks, note that, at the end of the 2020 financial year, a
provision of €500 thousand had been recognised in relation to a patent dispute, for which a
settlement was reached with the counterparty at the beginning of 2021. During 2021, the
corresponding use of the provision was therefore recognised, against payment.
The provisions for risks, which represent the estimate of future payments made based on
historical experience, have not been discounted because the effect is considered negligible.
Sabaf S.p.A | Separate financial statements at 31 December 2021
113
18. TRADE PAYABLES
31/12/2021
31/12/2020
Change
Total
33,678
26,204
7,474
The increase in trade payables is related to higher production volumes of the year.
Average payment terms did not change versus the previous year. At 31 December 2021, there
were no overdue payables of a significant amount and the Company did not receive any
injunctions for overdue payables.
19. TAX PAYABLES
31/12/2021
31/12/2020
Change
To inland revenue for income tax
2,703
1,433
1,270
To subsidiaries for income tax
55
276
(221)
To inland revenue for IRPEF tax deductions
616
676
(60)
Other tax payables
-
74
(74)
Total
3,374
2,459
915
Payables to inland revenue for income tax are related to IRES for €2,383 thousand and IRAP for
€320 thousand.
In the 2020 financial year, the Company has been part of the national tax consolidation scheme
pursuant to Articles 117/129 of the Unified Income Tax Law. At 31 December 2021, payables
to subsidiaries for income taxes refer to tax advances received from the subsidiary CGD s.r.l..
Payables for IRPEF tax deductions, relating to employment and self-employment, were duly
paid at maturity.
20. OTHER CURRENT PAYABLES
31/12/2021
31/12/2020
Change
To employees
5,095
4,259
836
To social security institutions
2,238
2,094
144
Advances from customers
1,200
858
342
To agents
216
231
(15)
Other current payables
652
415
237
Total
9,401
7,857
1,544
At the beginning of 2022, payables due to employees and social security institutions were paid
in accordance with the scheduled expiry dates.
Other current payables include accrued liabilities and deferred income.
21. DEFERRED TAX ASSETS AND LIABILITIES
31/12/2021
31/12/2020
Deferred tax assets
3,323
3,892
Deferred tax liabilities
(324)
(230)
Net position
2,999
3,662
Sabaf S.p.A | Separate financial statements at 31 December 2021
114
The table below analyses the nature of the temporary differences that determine the recognition
of deferred tax liabilities and assets and their changes during the year and the previous year.
Amortisation
and leasing
Provisions
and value
adjustments
Fair
value of
derivative
instruments
Goodwill
Tax
loss
Actuarial
evaluation of
post-
employment
benefit
Other
temporary
differences
Total
At 31/12/2019
(476)
896
65
1,417
419
168
53
2,542
Through profit
or loss
1,403
(18)
(20)
(177)
(419)
-
343
1,112
To shareholders’
equity
-
-
-
-
-
8
-
8
At 31/12/2020
927
878
45
1,240
0
176
396
3,662
Through profit
or loss
(184)
(131)
(10)
(177)
-
-
(160)
(662)
To shareholders’
equity
-
-
-
-
-
(1)
-
(1)
At 31/12/2021
743
747
35
1,063
0
175
236
2,999
Deferred tax assets relating to goodwill refer to the exemption of the value of the investment in
Faringosi Hinges s.r.l. made in 2011 pursuant to Law Decree 98/2011, deductible in ten
instalments starting in 2018.
22. TOTAL FINANCIAL DEBT
As required by the CONSOB memorandum of 28 July 2006, we disclose that the Company’s net
financial debt is as follows:
31/12/2021
31/12/2020
Change
A.
Cash (Note 11)
8
9
(1)
B.
Positive balances of unrestricted bank accounts (Note
11)
29,725
1,586
28,139
C.
Other cash equivalents
-
-
-
D.
Liquidity (A+B+C)
29,733
1,595
28,138
E.
Current financial receivables
1,173
1,360
(187)
F.
Current bank payables (Note 14)
1,841
10,567
(8,726)
G.
Current portion of non-current debt (Note 14)
17,169
13,430
3,739
H.
Other current financial payables (Note 15)
1,394
1,560
(166)
I.
Current financial debt (F+G+H)
20,404
25,557
(5,153)
J.
Net current financial debt (I-D-E)
(10,502)
22,602
(33,104)
K.
Non-current bank payables (Note 14)
82,515
26,891
55,624
L.
Other non-current financial payables
-
-
-
M.
Non-current financial debt (K+L)
82,515
26,891
55,624
N.
Net financial debt (J+M)
72,013
49,493
22,520
Sabaf S.p.A | Separate financial statements at 31 December 2021
115
The statement of cash flows, which shows the changes in cash and cash equivalents (letter D. of
this statement), describes in detail the cash flows that led to the change in the net financial
position.
Sabaf S.p.A | Separate financial statements at 31 December 2021
116
Comments on key income statement items
23. REVENUE
In 2021, sales revenue totalled €144,033,787, up 40.4% from €102,583,189 in 2020.
Revenue by geographical area
2021
%
2020
%
% change
Europe (excluding Turkey)
48,788
33.9%
38,724
37.7%
+26.0%
Turkey
35,496
24.6%
25,607
25.0%
+38.6%
North America
10,088
7.0%
7,792
7.6%
+29.5%
South America
20,688
14.4%
13,711
13.4%
+50.9%
Africa and Middle East
16,930
11.8%
10,415
10.2%
+62.6%
Asia and Oceania
12,044
8.4%
6,334
6.2%
+90.1%
Total
144,034
100%
102,583
100%
+40.4%
Revenue by product family
2021
%
2020
%
% change
Valves and thermostats
60,006
41.7%
45,784
44.6%
+31.1%
Burners
63,959
44.4%
42,798
41.7%
+49.4%
Accessories and other revenues
20,069
13.9%
14,001
13.6%
+43.3%
Total
144,034
100%
102,583
100%
+40.4%
In 2021, demand was solid in all markets, with particularly high peaks in the first half of the year.
The increase in sales was very strong in all geographical areas, with peaks in Asia, Africa and
the Middle East, indicating an increasingly global presence.
Average sales prices in 2021 were 1.5% higher compared with 2020.
24. OTHER INCOME
2021
2020
Change
Sale of trimmings
2,696
1,147
1,549
Services to subsidiaries
1,295
1,150
145
Royalties to subsidiaries
213
126
87
Contingent income
307
891
(584)
Rental income
123
121
2
Use of provisions for risks and charges
1
15
(14)
Other income
1,560
2,197
(637)
Total
6,195
5,647
548
Services to subsidiaries refer to administrative, commercial and technical services provided
within the scope of the Group.
Other income includes €638 in revenue from the sale of moulds and equipment and €106
thousand in benefits granted as a tax credit for investments made in 2021 (Law 160/2019
paragraphs 184 to 196).
Sabaf S.p.A | Separate financial statements at 31 December 2021
117
25. MATERIALS
2021
2020
Change
Commodities and outsourced
components
66,870
39,462
27,408
Consumables
5,252
3,809
1,443
Total
72,122
43,271
28,851
In 2021, the effective purchase prices of the main raw materials (aluminium alloys, steel and
brass) were on average higher than in 2020, with a negative impact of 5.8% of sales.
26. COSTS FOR SERVICES
2021
2020
Change
Outsourced processing
12,701
7,831
4,870
Electricity and natural gas
6,092
2,616
3,476
Maintenance
4,975
3,827
1,148
Advisory services
2,421
1,832
589
Transport and export expenses
2,475
1,420
1,055
Directors’ fees
477
419
58
Insurance
541
536
5
Commissions
770
573
197
Travel expenses and allowances
136
122
14
Waste disposal
539
469
70
Canteen
325
251
74
Temporary agency workers
487
211
276
Other costs
2,315
2,102
213
Total
34,254
22,209
12,045
The main outsourced processing carried out by the Company include aluminium die-casting,
hot moulding of brass and some mechanical processing and assembly. The increase in costs for
outsourced processing reflects the higher levels of activity compared to the previous year.
The increase in energy costs resulted, in addition to the increase in production volumes, from
the extraordinary and sudden increase in electricity and gas prices in the second half of the year.
27. PERSONNEL COSTS
2021
2020
Change
Salaries and wages
20,670
18,744
1,926
Social Security costs
6,433
5,718
715
Temporary agency workers
5,229
2,002
3,227
Post-employment benefit and
other costs
1,643
1,446
197
Stock grant plan
805
657
148
Total
34,780
28,567
6,213
Average of the Company headcount at 31 December 2021 totalled 473 employees (335 blue-
collars, 125 white-collars and supervisors, 13 managers), compared with 480 in 2020 (345 blue-
collars, 124 white-collars and supervisors, 11 managers). The number of temporary staff with
temporary work contract was 115 at 31 December 2021 (82 at the end of 2020).
Sabaf S.p.A | Separate financial statements at 31 December 2021
118
The item "Stock Grant Plan" included the measurement at 31 December 2021 of the fair value
of the options to the allocation of Sabaf shares to employees. For details of the Stock Grant Plan,
refer to Note 43.
28. OTHER OPERATING COSTS
2021
2020
Change
Provisions for risks
-
558
(558)
Non-income related taxes and
duties
375
413
(38)
Losses and write-downs of trade
receivables
100
89
11
Contingent liabilities
53
36
17
Other provisions
28
26
2
Other operating expenses
172
185
(13)
Total
728
1,307
(579)
Non-income taxes mainly include IMU, TASI and the tax for the disposal of urban solid waste.
Other provisions refer to the allocations to provisions for risks described in Note 17.
29. FINANCIAL EXPENSES
2021
2020
Change
Interest paid to banks
322
543
(221)
Banking expenses
177
141
36
Other financial expense
31
34
(3)
Total
530
718
(188)
Interest paid to banks includes IRS spreads payable that hedge interest rate risks.
30. EXCHANGE RATE GAINS AND LOSSES
In 2021, the Company reported net foreign exchange profit of €427 thousand (net loss of €399
thousand in 2020) due to the gradual strengthening of the dollar against the euro during the year.
31. PROFITS AND LOSSES FROM EQUITY INVESTMENTS
2021
2020
Change
Dividends received from Faringosi Hinges Srl
-
500
(500)
Dividends received from Okida Elektronik
176
109
67
Total
176
609
(433)
This item includes dividends received from investee companies.
Sabaf S.p.A | Separate financial statements at 31 December 2021
119
32. INCOME TAXES
2021
2020
Change
Current taxes
2,961
934
2,027
Deferred tax assets and liabilities
662
(1,112)
1,774
Taxes related to previous financial years
36
(89)
125
Substitute tax
-
146
(146)
Taxes on foreign dividends
24
15
9
Provision for tax risks
500
-
500
Total
4,183
(106)
4,289
Current taxes for 2021 are related to IRAP (€759 thousand) and IRES (€2,202 thousand).
With regard to the provision for tax risks, please refer to Note 17.
Reconciliation between the tax burden booked in the financial statements and the theoretical
tax burden calculated according to the statutory tax rates currently in force in Italy is shown in
the following table:
2021
2020
Theoretical income tax
3,414
1,513
Taxes related to previous financial years
28
(127)
Tax effect of dividends from investee companies
(16)
(124)
“Iper and Superammortamento” tax benefit
(641)
(694)
Realignment between carrying values and tax values of properties
-
(1,360)
Substitute tax on realignment of property values
-
146
Permanent tax differences
74
172
Other differences
-
2
Tax credit on sanitisation costs
(14)
(28)
Provision for tax risks
500
-
IRES (current and deferred)
3,345
(500)
IRAP (current and deferred)
838
394
Total
4,183
(106)
Theoretical taxes were calculated applying the current corporate income tax (IRES) rate, i.e.
24%, to the pre-tax result. IRAP is not taken into account for the purpose of reconciliation
because, as it is a tax with a different assessment basis from pre-tax profit, it would generate
distorting effects.
33. DIVIDENDS
On 2 June 2021, shareholders were paid an ordinary dividend of €0.55 per share (total dividends
of €6,172 thousand).
The Directors have recommended payment of an unchanged dividend of €0.60 per share this
year. This dividend is subject to approval of shareholders in the annual Shareholders’ Meeting
and was not included under liabilities in these financial statements.
The dividend proposed is scheduled for payment on 1 June 2022 (ex-date 30 May and record
date 31 May).
Sabaf S.p.A | Separate financial statements at 31 December 2021
120
34. SEGMENT REPORTING
Within the Sabaf Group, the Company operates exclusively in the gas parts segment for
household cooking. The information in the consolidated financial statements is divided between
the various segments in which the Group operates.
Sabaf S.p.A | Separate financial statements at 31 December 2021
121
35. INFORMATION ON FINANCIAL RISK
Categories of financial instruments
In accordance with IFRS 7, a breakdown of the financial instruments is shown below, among
the categories set forth in IFRS 9.
31/12/2021
31/12/2020
Financial assets
Amortised cost
Cash and cash equivalents
29,733
1,595
Trade receivables and other receivables
46,991
46,972
Non-current loans
10,708
5,537
Other financial assets
1,173
1,360
Hedge accounting
Derivatives cash flow hedges (on currency)
-
127
Financial liabilities
Fair Value through profit or loss
Derivatives cash flow hedges (on interest rates)
149
327
Amortised cost
Loans
101,525
50,887
Other financial liabilities
1,173
1,233
Trade payables
33,545
26,204
Hedge accounting
Derivatives cash flow hedges (on currency)
71
-
The Company is exposed to financial risks related to its operations, mainly:
- credit risk, with special reference to normal trade relations with customers;
- market risk, relating to the volatility of prices of commodities, foreign exchange and interest
rates;
- liquidity risk, which can be expressed by the inability to find financial resources necessary
to ensure Company operations.
It is part of Sabaf's policies to hedge exposure to changes in prices, exchange rates and interest
rates via derivative financial instruments. Hedging is done using forward contracts, options or
combinations of these instruments. Generally speaking, the maximum duration covered by such
hedging does not exceed 18 months. The Company does not enter into speculative transactions.
When the derivatives used for hedging purposes meet the necessary requisites, hedge
accounting rules are followed.
Credit risk management
Trade receivables involve producers of domestic appliances, multinational groups and smaller
manufacturers in a few or single markets. The Company assesses the creditworthiness of all its
customers at the start of supply and systemically at least on an annual basis. After this
assessment, each customer is assigned a credit limit.
The Company factors receivables with factoring companies based on without recourse
agreements, thereby transferring the related risk.
A credit insurance policy is in place, which guarantees cover for approximately 38% of trade
receivables.
Credit risk relating to customers operating in emerging economies is generally attenuated by
the expectation of revenue through letters of credit.
Sabaf S.p.A | Separate financial statements at 31 December 2021
122
Forex risk management
The main exchange rate to which the Company is exposed is the euro/USD in relation to sales
made in dollars (mainly in North America) and, to a lesser extent, to some purchases (mainly
from Asian manufacturers). Sales in US dollars represented 13.1% of total turnover in 2021,
while purchases in dollars represented 4.3% of total turnover. During the year, operations in
dollars were partially hedged through forward sales contracts. At 31 December 2021, the Group
had in place forward sales contracts of USD 3 million, maturing in December 2022 at an average
exchange rate of 1.1658. With reference to these contracts, the Company applies hedge
accounting, checking compliance with IFRS 9.
The table below shows the balance sheet and income statement effects of forward sales
contracts recognised under hedge accounting
.
Company
Counterparty
Instrument
Maturity
Value
date
Notional
(in thousands)
Fair value
hierarchy
Sabaf S.p.A.
Unicredit
Forward
28/03/2022
USD
1,000,000
2
27/06/2022
500,000
28/06/2022
500,000
27/09/2022
500,000
27/12/2022
500,000
Sensitivity analysis
With reference to financial assets and liabilities in US dollars at 31 December 2021, a
hypothetical and immediate revaluation of 10% of euro against the dollar would have led to a
loss of €466 thousand.
Interest rate risk management
Owing to the current trend in interest rates, the Company favours fixed-rate indebtedness:
medium to long-term loans originated at a variable rate are converted to a fixed rate by entering
into interest rate swaps (IRS) at the same time as the loan is opened. At 31 December 2021, IRS
totalling €33.4 million were in place, mirrored in mortgages with the same residual debt, through
which the Company transformed the floating rate of the mortgages into fixed rate. The derivative
contracts were not designated as a cash flow hedge and were therefore recognised using the
"fair value through profit or loss" method.
The following table shows the characteristics of the derivative financial instruments described
in the previous paragraph
.
Company
Counterparty
Instrument
Maturity
Value
date
Notional
Fair value
hierarchy
Sabaf S.p.A.
MPS
IRS
30/06/2023
EUR
1,500,000
2
Intesa Sanpaolo
15/06/2024
6,000,000
Intesa Sanpaolo
15/06/2024
1,850,000
Crédit Agricole
30/06/2025
9,000,000
Mediobanca
28/04/2027
15,000,000
Sensitivity analysis
Considering the IRS in place, at the end of 2021 almost all of the Company's financial debt was
at a fixed rate. Therefore, at 31 December 2021 no sensitivity analysis was carried out in that
the exposure to interest rate risk, linked to a hypothetical increase (decrease) in interest rates,
is not significant.
Sabaf S.p.A | Separate financial statements at 31 December 2021
123
Commodity price risk management
A significant portion of the Company’s purchase costs is represented by aluminium, steel and
brass. Metal prices rose sharply during 2021, forcing the Company to renegotiate sales prices
several times to compensate for the increase in costs. Based on market conditions and
contractual agreements, the Company may not be able to pass on changes in raw material prices
to customers in a timely and/or complete manner, with consequent effects on margins. The
Company also protects itself from the risk of changes in the price of aluminium, steel and brass
with supply contracts signed with suppliers for delivery up to twelve months in advance or,
alternatively, with derivative financial instruments. In 2021 and 2020, the Company did not use
financial derivatives on commodities.
Liquidity risk management
The management of liquidity and financial debt is coordinated at Group level. The Group
operates with a debt ratio considered physiological (net financial debt / shareholders' equity at
31 December 2021 of 55.2%, net financial debt / EBITDA of 1.25) and has unused short-term
lines of credit. To minimise the risk of liquidity, the Administration and Finance Department:
- maintains a correct balance of net financial debt, financing investments with capital and with
medium to long-term debt;
- verifies systematically that the short-term accrued cash flows (amounts received from
customers and other income) are expected to accommodate the deferred cash flows (short-
term financial debt, payments to suppliers and other outgoings);
- regularly assesses expected financial needs in order to promptly take any corrective
measures.
An analysis by expiry date of financial payables at 31 December 2021 and 31 December 2020 is
shown below.
At 31 December 2021
Carrying
value
Contractual
cash flows
Within 3
months
From 3
months to 1
year
From 1 to 5
years
More than 5
years
Unsecured loans and leases
70,035
71,469
1,819
15,830
47,984
5,836
Bond issue
29,649
34,440
-
555
2,220
31,665
Short-term bank loans
2,062
2,062
2,062
-
-
-
Payables to C.M.I.
shareholders
1,173
1,173
-
1,173
-
-
Total financial payables
102,919
109,144
3,881
17,558
50,204
37,501
Trade payables
33,678
33,678
30,896
2,782
-
-
Total
136,597
142,822
34,777
20,340
50,204
37,501
At 31 December 2020
Carrying
value
Contractual
cash flows
Within 3
months
From 3
months to 1
year
From 1 to 5
years
More than 5
years
Unsecured loans and leases
40,320
40,832
1,874
11,777
27,174
7
Short-term bank loans
10,567
10,567
10,567
-
-
-
Payables to A.R.C.
shareholders
60
60
-
60
-
-
Payables to C.M.I.
shareholders
1,173
1,173
-
1,173
-
-
Total financial payables
52,120
52,632
12,441
11,837
27,174
7
Trade payables
26,204
26,204
23,548
2,656
-
-
Total
78,324
78,836
35,989
14,493
27,174
7
Sabaf S.p.A | Separate financial statements at 31 December 2021
124
The various due dates are based on the period between the end of the reporting period and the
contractual expiry date of the commitments, the values indicated in the table correspond to non-
discounted cash flows. Cash flows include the shares of principal and interest; for floating rate
liabilities, the shares of interest are determined based on the value of the reference parameter
at the end of the reporting period and increased by the spread set forth in each contract.
Hierarchical levels of fair value assessment
The revised IFRS 7 requires that financial instruments reported in the statement of financial
position at fair value be classified based on a hierarchy that reflects the significance of the input
used in determining the fair value. IFRS 7 makes a distinction between the following levels:
• Level 1 – quotations found on an active market for assets or liabilities subject to
assessment;
• Level 2 - input other than prices listed in the previous point, which can be observed
directly (prices) or indirectly (derived from prices) on the market;
• Level 3 – input based on observable market data.
The following table shows the assets and liabilities valued at fair value at 31 December 2021,
by hierarchical level of fair value assessment.
Level 1
Level 2
Level 3
Total
Other financial liabilities (interest rate derivatives)
-
149
-
149
Total assets and liabilities at fair value
-
149
-
149
Sabaf S.p.A | Separate financial statements at 31 December 2021
125
36. RELATIONS BETWEEN GROUP COMPANIES AND WITH RELATED PARTIES
The table below illustrates the impact of all transactions between Sabaf S.p.A. and other related
parties on the balance sheet and income statement items and related parties, with the exception
of the directors' fees, auditors and key management personnel which is stated in the Report on
Remuneration.
Impact of related party transactions or positions on statement of financial position items
Total
2021
Subsidiaries
Other
related
parties
Total
related
parties
Impact
on the total
Non-current financial assets
10,708
10,708
-
10,708
100%
Trade receivables
45,194
15,211
-
15,211
33.66%
Tax receivables
1,463
767
-
767
52.43%
Trade payables
33,678
1,533
4
1,537
4.56%
Tax payables
3,374
55
-
55
1.63%
Total
2020
Subsidiaries
Other
related
parties
Total
related
parties
Impact
on the total
Non-current financial assets
5,537
5,537
-
5,537
100%
Trade receivables
45,025
16,048
-
16,048
35.64%
Tax receivables
1,254
316
-
316
25.20%
Trade payables
26,204
1,075
4
1,079
4.12%
Tax payables
2,459
351
-
351
14,27%
Impact of related party transactions on income statement items
Total
2021
Subsidiaries
Other
related
parties
Total related
parties
Impact
on the total
Revenue
144,034
20,212
-
20,212
14.03%
Other income
6,195
2,030
-
2,030
32.77%
Materials
72,122
3,316
-
3,316
4.60%
Services
34,254
447
21
468
1.37%
Capital gains on non-current assets
238
155
-
155
65.13%
Financial income
318
255
-
255
80.19%
Total
2020
Subsidiaries
Other
related
parties
Total related
parties
Impact
on the total
Revenue
102,583
15,221
-
15,221
14.84%
Other income
5,647
1,647
-
1,647
29.17%
Materials
43,271
1,935
-
1,935
4.47%
Services
22,209
458
21
479
2.16%
Capital gains on non-current assets
965
723
-
723
74.92%
Write-downs of non-current assets
761
620
-
620
81.47%
Financial income
202
176
-
176
87.13%
Sabaf S.p.A | Separate financial statements at 31 December 2021
126
Relations with subsidiaries mainly consist of:
• trade relations, relating to the purchase and sale of semi-processed goods or finished
products;
• sales of machinery, which generated the capital gains highlighted;
• charging for the provision of intra-group technical, commercial and administrative
services;
• charging for intra-group royalties;
• intra-group loans;
• tax consolidation scheme.
Related party transactions are regulated by specific contracts regulated at arm’s length
conditions.
37. SIGNIFICANT NON-RECURRING EVENTS AND TRANSACTIONS
Pursuant to CONSOB memorandum of 28 July 2006, the following section describes and
comments on significant non-recurring events, the consequences of which are reflected in the
economic, equity and financial results for the year:
Shareholders’
equity
Net Profit
Net financial
debt
Cash flows
Financial statement values (A)
114,409
10,044
72,013
28,138
Provision for tax risks
500
500
-
-
Total non-recurring operations (B)
500
500
-
-
Financial statement notional
value (A + B)
114,909
10,544
72,013
28,138
In these separate financial statements, the Company recognised a provision for tax risks of €500
thousand against potential tax liabilities (Note 17 and Note 28).
38. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
The recent conflict between Ukraine and Russia led to a sudden change in the global economic
scenario. Although the Company has a non-significant direct exposure to the markets of Russia,
Belarus and Ukraine, it is exposed to indirect effects on the price trends of raw materials,
electricity and gas, the supply chain and final demand. To date, these effects are not quantifiable
as they are related to future developments in the conflict, the outcome of which cannot be
determined.
39. ATYPICAL AND/OR UNUSUAL TRANSACTIONS
Pursuant to CONSOB memorandum of 28 July 2006, the Company declares that no atypical
and/or unusual transactions as defined by the CONSOB memorandum were executed during
2021.
Sabaf S.p.A | Separate financial statements at 31 December 2021
127
40. SECONDARY OFFICES AND LOCAL UNITS
The Company has two other active local units in addition to the registered office in Ospitaletto
(Brescia):
- Lumezzane (Brescia);
- Busto Arsizio (Varese).
41. COMMITMENTS
Guarantees issued
Sabaf S.p.A. also issued sureties to guarantee mortgage loans granted by banks to employees
for a total of €3,443 thousand (€3,632 thousand at 31 December 2020).
42. FEES TO DIRECTORS, STATUTORY AUDITORS AND EXECUTIVES WITH
STRATEGIC RESPONSIBILITIES
Fees to directors, statutory auditors and executives with strategic responsibilities are described
in the Report on Remuneration that will be presented to the shareholders' meeting called to
approve these separate financial statements.
43. SHARE-BASED PAYMENTS
Two stock grant plans are in place, namely the 2018 - 2020 Stock Grant Plan and the 2021 -
2023 Stock Grant Plan. The Plans aim to promote and pursue the involvement of the
beneficiaries whose activities are considered relevant for the implementation of the contents
and the achievement of the objectives set out in the Business Plan, foster loyalty development
and motivation of managers, by increasing their entrepreneurial approach as well as align the
interests of management with those of the Company's shareholders more closely, with a view
to encouraging the achievement of significant results in the economic and asset growth and
sustainability of the Company and of the Group.
2018 – 2020 Stock Grant Plan
The Plan was approved by the Shareholders' Meeting on 8 May 2018 and the related Regulations
by the Board of Directors on 15 May 2018, subsequently amended as on 14 May 2019.
Subject matter
The subject-matter of the Plan is the free allocation to the Beneficiaries of a maximum of 370,000
Options, each of which entitles them to receive free of charge, under the terms and conditions
provided for by the Regulations of the relevant Plan, 1 Sabaf S.p.A. Share. The free allocation of
Sabaf S.p.A. shares is conditional, among other things, on the achievement, in whole or in part
of the business objectives related to the ROI, EBITDA and TSR indicators and, for a share not
exceeding 30%, of individual objectives, on a progressive basis;
Beneficiaries
The Plan is intended for persons who hold or will hold key positions in the Company and/or its
Subsidiaries, with reference to the implementation of the contents and the achievement of the
objectives of the 2018 - 2020 Business Plan. The Beneficiaries were divided into two groups:
- Cluster 1: beneficiaries identified in the Plan or who will be identified by the Board of
Directors by 30 June 2018 and to whom 185,600 rights have been allocated;
- Cluster 2: beneficiaries identified by the Board of Directors from 1 July 2018 to 30 June
Sabaf S.p.A | Separate financial statements at 31 December 2021
128
2019 and to whom 184,400 rights have been allocated;
Deadline
The 2018 - 2020 Plan expires on 31 December 2022.
Rights accrued and allocation of shares
With reference to Cluster 1, based on the level of achievement of the objectives and the other
conditions set out in the Plan, 34,946 rights accrued, therefore 34,946 shares have been allocated
to the Beneficiaries during 2021.
With regard to Cluster 2, based on the level of achievement of the objectives set out in the Plan,
114,074 rights accrued. The allocation of the relevant shares will be made during 2022 and is
conditional on the continuation of the employment relationship with the Beneficiaries at the
date of approval of the financial statements for the year 2021 of Sabaf S.p.A.
Accounting impacts and Fair Value measurement methods
The Company's shareholders' equity includes the Stock Grant reserve (Note 13), which includes
€896 thousand for the fair value measurement of the Rights assigned to Cluster 2 beneficiaries.
Please see the explanatory notes to the consolidated financial statements at 31 December 2020
for an explanation of how to determine the fair value of these rights.
2021 – 2023 Stock Grant Plan
The plan was approved by the Shareholders' Meeting on 6 May 2021 and the related Regulations
by the Board of Directors on 13 May 2021.
Subject matter
The subject-matter of the Plan is the free allocation to the Beneficiaries of a maximum of 260,000
Options, each of which entitles them to receive free of charge, under the terms and conditions
provided for by the Regulations of the relevant Plan, 1 Sabaf S.p.A. Share.
The free allocation of Sabaf S.p.A. shares is conditional on the achievement, in whole or in part,
with progressiveness, of the business targets related to the ROI and EBITDA and social and
environmental targets.
Beneficiaries
The Plan is intended for persons who hold or will hold key positions in the Company and/or its
Subsidiaries, with reference to the implementation of the contents and the achievement of the
objectives of the 2021 - 2023 Business Plan. A total of 226,000 Rights were allocated to the
Beneficiaries already identified.
Deadline
The 2021 - 2023 Plan expires on 31 December 2024.
Accounting impacts and Fair Value measurement methods
In connection with this Plan, €805 thousand (Note 27) were recognised in personnel costs during
the year, an equity reserve of the same amount (Note 13) was recognised as a balancing entry.
In line with the date on which the beneficiaries became aware of the assignment of the rights
and terms of the plan, the grant date was set at 13 May 2021.
The main assumptions made at the beginning of the vesting period and the methods for
determining the fair value at the end of the reporting period are illustrated below. The following
economic and financial parameters were taken into account in determining the fair value per
share at the start of the vesting period:
Sabaf S.p.A | Separate financial statements at 31 December 2021
129
Share price on grant date adjusted for dividends
23.09
Dividend yield
2.60%
Expected volatility per year
28%
Interest rate per year
-0.40%
Based on the exercise right at the different dates established by the Plan Regulations and on the
estimate of the expected probability of achieving the objectives for each reference period, the
unitary fair value at 31 December 2021 was determined as follows:
15.82
35%
16.43
40%
20.41
5%
7.82
5%
20.41
15%
16.58
Rights relating to ESG objectives
measured on emissions reduction
Total value on "Safety
indicator"
Rights on "Safety
indicator"
5.54
Rights on "Personell
training"
Total value on "Emissions
reduction"
Rights on "Emissions
reduction"
6.57
1.02
Rights relating to ESG objectives
measured on safety indicator
0.39
3.06
Fair value per share
Total value on EBITDA
Rights relating to business
objectives measured on ROI
Rights relating to business
objectives measured on EBITDA
Total value on ROI
Rights on ROI
Rights on EBITDA
Total value on "Personell
training"
Rights relating to ESG objectives
measured on personell training
Fair Value
Fair Value
Fair Value
Fair Value
Fair Value
Sabaf S.p.A | Separate financial statements at 31 December 2021
130
Summary of public grants pursuant to Art. 1, paragraphs 125-129, Law no.
124/2017
In compliance with the requirements of transparency and publicity envisaged pursuant to Law
no. 124 of 4 August 2017, article 1, paragraphs 125-129, which imposed on companies the
obligation to indicate in the explanatory notes
"grants, contributions, and in any case economic
advantages of any kind",
the following are the details of the relative amounts, accounted for "on
a cash basis", in addition to what has already been published in the National State Aid Register
- transparency of individual aid.
Statutory References
Contribution value
Disbursing Subject
Super/Iper ammortamento (Super/Hyper
amortisation)
641
Italian State
Energy-intensive contributions
485
Italian State
Sanitisation credit
14
Italian State
Total
1,196
Iperammortamento (Hyper amortisation): it allows an over-estimation for tax purposes of
capital equipment to which "Industry 4.0" benefits are applicable, which differs according to the
year of acquisition. The reference regulations are included in the Budget Laws from the year
2017 to the year 2020 and Budget Law 2021, Law 178/2020.
Super ammortamento (Super amortisation): it allows an over-estimation for tax purposes of
130% or 140% of investments in new capital equipment; the reference regulations are contained
in Law no. 205 of 27 December 2017.
Energy-intensive contributions: Accessible grants for companies that consume a lot of
electricity, whose regulatory reference is the MISE Decree of 21 December 2017.
Tax credit for sanitisation and the purchase of personal protective equipment: tax credit equal
to 60% of the expenses incurred in June, July and August 2021 with reference to Art. 32 of Law
Decree no. 73 of 25 May 2021.
Sabaf S.p.A | Separate financial statements at 31 December 2021
131
LIST OF EQUITY INVESTMENTS IN SUBSIDIARIES
1
Company name
Registered offices
Share capital at 31
December 2021
Shareholders
% of
ownership
Shareholders’ equity
at 31 December 2021
2021 profit (loss)
Faringosi Hinges s.r.l.
Ospitaletto (BS)
EUR 90,000
Sabaf S.p.A.
100%
EUR 8,461,977
EUR 1,102,439
Sabaf do Brasil Ltda
Jundiaì (Brazil)
BRL 53,348,061
Sabaf S.p.A.
100%
BRL 99,168,885
BRL 8,840,503
Sabaf US Corp.
Plainfield (USA)
USD 200,000
Sabaf S.p.A.
100%
USD 179,369
46,748
Sabaf Appliance Components
(Kunshan) Co., Ltd.
Kunshan (China)
EUR 7,900,000
Sabaf S.p.A.
100%
CNY 10,461,803
CNY -3,349,677
Sabaf Beyaz Esya Parcalari
Sanayi Ve Ticaret Limited
Sirteki
Manisa (Turkey)
TRY 80,000,000
Sabaf S.p.A.
100%
TRY 212,728,107
TRY 35,165,181
A.R.C. s.r.l.
Campodarsego (PD)
EUR 45,000
Sabaf S.p.A.
100%
EUR 7,665,156
EUR 883,555
Okida Elektronik Sanayi ve
Tickaret A.S
Istanbul (Turkey)
TRY 5,000,000
Sabaf S.p.A.
Sabaf Beyaz Esya
Parcalari Sanayi Ve
Ticaret Limited Sirteki
30%
70%
TRY 156,217,914
TRY 77,149,853
Sabaf Mexico Appliance
Components
San Louis Potosì
(Mexico)
USD 3,650,000
Sabaf S.p.A.
100%
PESOS 71,264,460
PESOS - 3,511,040
C.M.I s.r.l.
Valsamoggia (BO)
EUR 1,000,000
Sabaf S.p.A.
100%
EUR 15,503,588
EUR 3,962,079
C.G.D. s.r.l.
Valsamoggia (BO)
EUR 26,000
C.M.I. s.r.l.
100%
EUR 1,050,145
EUR 234,316
Sabaf India Private Limited
Bangalore (India)
INR 153,833,140
Sabaf S.p.A.
100%
INR 148,278,330*
INR -5,554,810*
Handan A.R.C. Burners Co.,
Ltd.
Handan (China)
RMB 3,000,000
A.R.C. s.r.l.
51%
RMB 1,860,639
RMB -68,027
‘* The values shown for Sabaf India Private Limited refer to 31 March 2021, the local reporting date
OTHER SIGNIFICANT EQUITY INVESTMENTS
None
1
Values taken from the separate financial statements of subsidiaries, prepared in accordance with locally applicable accounting standards
132
ORIGIN, POSSIBILITY OF UTILISATION AND AVAILABILITY OF RESERVES
Description
Amount
Possibility
of
utilisation
Available
share
Amount subject
to taxation for the
company in the
case of
distribution
Capital reserves:
Share premium reserve
10,002
A, B, C
10,002
0
Revaluation reserve, Law 413/91
42
A, B, C
42
42
Revaluation reserve, Law 342/00
1,592
A, B, C
1,592
1,592
Retained earnings:
Legal reserve
2,307
B
0
0
Other retained earnings
72,912
A, B, C
72,912
0
Revaluation reserve, Law Decree 104/20
4,873
A, B
4,873
4,727
Valuation reserve:
Post-employment benefit actuarial
provision
(526)
0
0
Reserve for stock grant plan
1,701
0
0
Hedge accounting reserve
(71)
0
0
Total
92,832
89,421
6,361
Key:
A. for share capital increase
B. to hedge losses
C. for distribution to shareholders
133
STATEMENT OF REVALUATIONS
OF EQUITY ASSETS AT 31 DECEMBER 2020
Gross value
Cumulative
depreciation
Net value
Investment
property
Law 72/1983
137
(137)
0
1989 merger
516
(501)
15
Law 413/1991
17
(17)
0
1994 merger
1,320
(1,063)
257
Law 342/2000
2,870
(2,712)
158
4,860
(4,430)
430
Plant and
equipment
Law 576/75
180
(180)
0
Law 72/1983
2,180
(2,180)
0
1989 merger
6,140
(6,140)
0
1994 merger
6,820
(6,820)
0
15,320
(15,320)
0
Industrial and
commercial
equipment
Law 72/1983
161
(161)
0
Other assets
Law 72/1983
50
(50)
0
TOTAL
20,391
(19,961)
430
GENERAL INFORMATION
Sabaf S.p.A. is a company organised under the legal system of the Republic of Italy.
Registered and administrative office: Via dei Carpini, 1
25035 Ospitaletto (Brescia)
Contacts: Tel: +39 030 - 6843001
Fax: +39 030 - 6848249
E-mail: info@sabaf.it
Web site: http://www.sabaf.it
Tax information: REA Brescia 347512
Tax Code 03244470179
VAT Number 01786910982
134
Appendix
Information as required by Art. 149-
duodecies
of the CONSOB Issuers’
Regulation
The following table, prepared pursuant to Art. 149-
duodecies
of the CONSOB Issuers’
Regulation, shows fees relating to 2021 for auditing services and for services other than
auditing provided by the Independent Auditors. No services were provided by entities
belonging to the network.
(€/000)
Party providing
the service
Fees pertaining to the 2021
financial year
Audit
EY S.p.A.
35
Certification services
EY S.p.A
---
Other audit services
EY S.p.A
33 (1)
Total
68
(1) auditing procedures agreement relating to interim management reports.
135
Certification of Separate financial statements pursuant to Art. 154-bis of Legislative
Decree 58/98
Pietro Iotti, the Chief Executive Officer, and Gianluca Beschi, the Financial Reporting Officer of
Sabaf S.p.A., have taken into account the requirements of Art. 154-bis, paragraphs 3 and 4, of
Legislative Decree 58 of 24 February 1998 and can certify:
• the adequacy, in relation to the business characteristics and
• the actual application
of the administrative and accounting procedures for the formation of the separate financial
statements during the 2021 financial year.
They also certify that:
• the separate financial statements:
- were prepared in accordance with the international accounting policies
recognised in the European Community in accordance with EC regulation
1606/2002 of the European Parliament and Council of 19 July 2002 and with
the measures issued in implementation of Art. 9 of Legislative Decree 38/2005;
- are consistent with accounting books and records;
- provide a true and fair view of the financial position and performance of the
issuer;
• the report on operations contains a reliable analysis of the performance and results of
operations and the situation at the issuer, along with a description of the key risks and
uncertainties to which it is exposed.
Ospitaletto, 22 March 2022
Chief Executive Officer
Pietro Iotti
The Financial Reporting Officer
Gianluca Beschi