2022 ANNUAL FINANCIAL
REPORT
TABLE OF CONTENTS
01 REPORT ON OPERATIONS
17 SABAF GROUP CONSOLIDATED FINANCIAL STATEMENTS at 31 December 2022
82 SABAF S.P.A. SEPARATE FINANCIAL STATEMENTS at 31 December 2022
Sabaf Group | 2022 Report on Operations
1
SABAF GROUP
REPORT ON OPERATIONS
Sabaf Group | 2022 Report on Operations
2
Business and Financial situation of the Group
(
€
/000)
2022
%
2021
%
2022-2021
change
% change
Sales revenue
253,053
100%
263,259
100%
(10,206)
-3.9%
EBITDA
40,092
15.8%
54,140
20.6%
(14,048)
-25.9%
EBIT
21,887
8.6%
37,508
14.2%
(15,621)
-41.6%
Pre-tax profit
12,209
4.8%
29,680
11.3%
(17,471)
-58.9%
Profit attributable to the Group
15,249
6.0%
23,903
9.1%
(9,434)
-38.2%
Basic earnings per share (€)
1.355
2.132
(0.778)
-36.47%
Diluted earnings per share (€)
1.355
2.132
(0.778)
-36.47%
The Sabaf Group ended the 2022 financial year with sales revenue of €253.1 million, down
3.9% (-4.9% on a like-for-like basis) compared to €263.3 million in 2021, the company's
historic record year. The household appliance market continued its positive trend in the
first half of 2022, but then experienced a sharp downturn in the second half of the year,
accentuated by a sharp decline in our customer inventories.
Sales prices in 2022 were 8.4% higher than in 2021, largely offsetting considerable
increases in the purchase prices of the main raw materials (aluminium alloys, steel and
brass), electricity and gas.
EBITDA was €40.1 million (15.8% of turnover), down 25.9% from €54.1 million in 2021
(20.6% of turnover), and EBIT was €21.9 million (8.6% of turnover) compared to €37.5
million in 2021. Net profit was €15.2 million (6% of sales) compared to €23.9 million in
2021.
Sabaf Group | 2022 Report on Operations
3
The subdivision of sales revenues by product line is shown in the table below:
2022
%
2021
%
% change
Gas parts
158,340
62.6%
182,468
69.3%
-13.2%
Hinges
68,627
27.1%
58,375
22.3%
+17.6%
Electronic components
26,086
10.3%
22,416
8.4%
+16.4%
Total
253,053
100%
263,259
100%
-3.9%
Hinges and Electronic Components also confirmed a growth trend in 2022, while sales of
gas components were adversely affected by the downturn in the main target markets
(Europe and South America).
The geographical breakdown of revenues is shown below:
2022
%
2021
%
% change
Europe (excluding Turkey)
87,282
34.5%
92,935
35.3%
-6.1%
Turkey
66,845
26.4%
65,526
24.9%
+2.0%
North America
39,800
15.7%
30,472
11.6%
+30.6%
South America
28,503
11.3%
39,589
15.0%
-28.0%
Africa and Middle East
19,098
7.5%
19,614
7.5%
-2.6%
Asia and Oceania
11,525
4.6%
15,123
5.7%
-23.8%
Total
253,053
100%
263,259
100%
-3.9%
The best performing area was North America, up 30.6% to €39.8 million and where the
Group aims to further increase its presence. The markets with the most significant declines
were South America, although this was compared to an exceptionally strong 2021 (when
sales were 43% higher than the 27.6 million euro in 2020), and Asia, which is still heavily
affected by pandemic-related restrictions.
The impact of labour cost on sales decreased from 20.5% in 2021 to 19.7% in 2022.
The ratio of net financial expenses to turnover remained extremely low, while the
application of IAS 29 to the financial statements of the Turkish subsidiaries resulted in a
hyperinflationary expense of €9 million in the current year (for further details, please refer
to the specific section "Hyperinflation – Turkey: application of IAS 29" in the Notes to the
Consolidated Financial Statements at 31 December 2022).
During the year, the Group recognised in the income statement negative forex differences
of €0.5 million (€7.4 million of negative forex differences were recognised in 2021).
In 2022, the Group recognised positive income taxes of €3 million with a positive tax rate
of 25%. The main impacts on the tax rate are shown in Note 34 to the consolidated
financial statements.
Sabaf Group | 2022 Report on Operations
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The Group’s statement of financial position, reclassified based on financial criteria, is
illustrated below
1
:
(
€
/000)
31/12/2022
31/12/2021
Non-current assets
171,276
130,093
Short-term assets
2
134,709
141,494
Short-term liabilities
3
(55,329)
(72,863)
Working capital
4
79,380
68,631
Provisions for risks and charges, Post-employment
benefits, deferred taxes
(10,128)
(8,681)
Net invested capital
240,528
190,043
Short-term net financial position
(6,030)
18,897
Medium/long-term net financial position
(78,336)
(86,504)
Net financial debt
(84,366)
(67,607)
Shareholders’ equity
156,162
122,436
Cash flows for the financial year are summarised in the table below:
(
€
/000)
2022
2021
Opening liquidity
43,649
13,318
Operating cash flow
24,293
23,216
Cash flow from investments
(20,856)
(23,752)
Free cash flow
3,437
(536)
Cash flow from financing activities
(16,886)
41,233
Acquisitions
(5,045)
(6,296)
Foreign exchange differences
(4,232)
(4,070)
Cash flow for the period
(22,726)
30,331
Closing liquidity
20,923
43,649
In 2022, the Group generated operating cash flow of €24.3 million (€23.2 million in 2021).
At 31 December 2022, the impact of the net working capital on revenue was 31.4%
compared to 26.1% at 31 December 2021.
In 2022, in line with the Business Plan, the Group invested €20.9 million (€23.8 million in
2021). This is mainly a non-recurring investment, aimed at expanding the international
production footprint:
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
Sabaf Group | 2022 Report on Operations
5
▪ in Turkey, where an integrated production line of hinges for dishwashers was
started;
▪ in India, where the production of gas components (valves and burners) was started);
▪ in Mexico, where work on the construction of the plant in San Luis de Potosi
continued.
The Group announced its entry into the induction cooking components market, a strategic
initiative supported by a major research and development investment plan, for which a
dedicated project team has been set up in Italy. The first prototypes were presented in the
second half of 2022, while production will start no later than the first half of 2023.
On 3 October 2022, Sabaf S.p.A. completed the acquisition of 100% of P.G.A. S.r.l., a
company based in Fabriano (AN) and operating for over 25 years in the field of design and
assembly of electronic control boards for the household appliances sector, for an
Enterprise Value of €9.76 million. The acquisition of P.G.A. reflects the objective of
diversifying and broadening the offer set out in the Business Plan of the Group, in which
the Electronics Division plays a fundamental role. P.G.A., which is excellent in terms of
development capacity and at the forefront of quality production processes, integrates with
Okida, which is increasingly contributing to the Group's results. Synergies to be developed
include those for the production of induction cooking components.
In 2022,
the positive free cash flow
5
generated by the Sabaf Group was €3.4 million
(negative €0.5 million in 2021).
During the financial year, the Group paid dividends for €6.7 million and purchased treasury
shares for €1.9 million. At 31 December 2022, net financial debt, including the acquisition
of P.G.A., was €84.4 million (€67.6 million at 31 December 2021). The change in net
financial debt is summarised in the table below:
Net financial debt at 31 December 2021
(67,607)
Free cash flow
3,437
Dividends paid out
(6,690)
Buy-back of shares
(1,862)
Financial liabilities IFRS 16 - new contracts entered into in 2022
(437)
Change in fair value of derivative financial instruments
1,111
Change in the scope of consolidation
(7,941)
Foreign exchange differences and other changes
(4,377)
Net financial debt at 31 December 2022
(84,366)
At 31 December 2022, shareholders' equity amounted to €156.2 thousand; the ratio
between the net financial debt and the shareholders’ equity was 0.54 versus 0.55 in 2021.
5
Free cash flow is the difference between Cash Flows from operations and Net investments.
Sabaf Group | 2022 Report on Operations
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Economic and financial indicators
2022
2021
pro-forma
6
pro-forma
6
Change in turnover
-3.9%
-4.9%
+42.4%
+42.3%
ROCE (return on capital employed)
9.10%
19.7%
Net debt/EBITDA
2.10
1.25
Net debt/equity ratio
54%
55%
Market capitalisation (31/12)/equity ratio
1.23
2.26
Please refer to the introductory part of the Annual Report for a detailed examination of
other key performance indicators.
Risk Factors
Risks related to the conflict between Russia and Ukraine
The Sabaf Group has no significant direct exposure to the markets affected by the conflict
or to sanctioned entities. These are markets supplied by our customers, who have
generally reduced their business in the countries concerned in 2022, with an indirect
impact on Sabaf Group sales that is difficult to quantify.
The conflict had a broad impact on the global economy, exacerbating price pressures and
leading to a tightening of monetary policies, with obvious repercussions on the demand
for consumer goods. For the Sabaf Group, the most significant impacts are related to price
increases for steel, aluminium, natural gas and electricity, as described in the paragraph
"Financial risks" below.
Climate change and energy transition
With regard to physical risks related to climate change, such as the increase in global
temperatures, sea level and the increase in extreme weather events, the Group has not
identified any significant risks to date.
On the other hand, transitional risks, such as the increase in energy costs, changes in
consumer choices or those related to the introduction of new technologies, which the
Group manages at a strategic level, are of significant impact and probability. In line with
its energy transition plans, the Group launched a major investment plan to enter the
market for electromagnetic induction cooking components, which will complement the
other cooking technologies already in the Sabaf range: gas and traditional electric.
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.
6
The change in pro-forma turnover is calculated on a like-for-like basis
Sabaf Group | 2022 Report on Operations
7
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.
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.
Sabaf Group | 2022 Report on Operations
8
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.
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, Sabaf opened a new plant in Turkey to
increase production capacity for electronic components. Production of hinges for
dishwashers for customers with production sites in Turkey was also started in 2022. In
2022, Turkey represented 20% of the Group's production and 26% 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.
In 2022, the Group also announced its entry into the induction cooking components
market. Sabaf will thus be present in all cooking technologies: gas, traditional electric and
induction. Leveraging a total team of more than 50 electronic engineers, Sabaf developed
Sabaf Group | 2022 Report on Operations
9
its own project know-how internally by filing proprietary patents, software and hardware,
and aspires to create innovative products that better meet customers' needs and new
consumer trends. The first prototypes were presented in the second half of 2022, while
production will start no later than the first half of 2023.
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 2022,
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. Rising energy costs, exacerbated by the Russia-Ukraine conflict, can
have a significant impact on 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 19.9% 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 38
of the consolidated financial statements as regards disclosure for the purposes of IFRS 7.
Sabaf Group | 2022 Report on Operations
10
Research and Development
The most important research and development projects carried out in 2022 were as
follows:
Gas parts
▪ the feasibility study of a new 4kw multi-ring burner, based on the existing platform,
was completed
▪ burners for the US market have been industrialized
▪ new versions of burners for the Indian market have been developed
▪ new prototypes of burners powered 100% by hydrogen were developed
▪ studies and tests for the qualification of a new alloy for special flame-spreaders
were started
▪ industrialization for the production of burners and valves in India has been
completed
Hinges
▪ a sliding hinge model for dishwashers was designed and developed
▪ a low-cost hinge model for oven doors was industrialised
▪ a system was integrated into the standard dishwasher product to increase the door
balancing range
▪ a new hinge model for dishwashers with an adjustment system was developed
▪ a hinge for built-in and free-standing refrigerators is being studied
Electronic components
▪ a new timer platform for oven is being developed for an important new customer
▪ a new electronic hood control platform with integrated power board was developed
▪ the range of controls for pyroceram hobs with Class B certification was expanded
Induction
▪ five platforms offering over 90 different combinations of inductor, coil size and user
interface are under development, with the aim of providing a modular and
customisable product range based on each customer's specific requirements.
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 €2,506,000 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,
Sabaf Group | 2022 Report on Operations
11
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 Annual
Financial Statement is 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 2022, 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 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 2022 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.
Sabaf Group | 2022 Report on Operations
12
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 38 of the consolidated financial
statements.
Atypical or unusual transactions
Sabaf Group companies did not execute any unusual or atypical transactions in 2022.
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., C.G.D. s.r.l., P.G.A. s.r.l. and PGA2.0 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 39 of the
consolidated financial statements and in Note 38 of the separate financial statements of
Sabaf S.p.A.
Business outlook
The first weeks of 2023 show a gradually improving trend in sales and orders. The
destocking that characterised the second half of 2022 is over now, although sales in the
first half of the year will remain lower than the record levels of early 2022. The Group
expects a recovery in profitability made possible by the recovery in production volumes,
lower energy and raw material prices, measures to reduce energy consumption.
Product diversification and internationalisation initiatives continue as planned. These will
help to improve the Group's economic performance and ensure sustainable growth in the
medium and long term. Specifically:
▪ efforts have been stepped up to develop induction cooking components (first
deliveries are imminent);
▪ the technical and commercial integration of P.G.A. continues with the aim of
strengthening its presence in the smart appliances and IoT sector for household
appliances;
▪ the ramp-up of the production of gas components in India continues;
▪ construction of the plant in Mexico is nearing completion, where production of
burners highly anticipated by the North American market will begin;
Sabaf Group | 2022 Report on Operations
13
▪ at the Ospitaletto plant, work is about to start on a photovoltaic system that, with
an installed capacity of 2 MW, will cover a significant portion of the plant's energy
requirements.
Sabaf Group | 2022 Report on Operations
14
Business and financial situation of Sabaf S.p.A.
(
€
/000)
2022
2021
Change
% change
Sales revenue
119,090
144,034
(24,944)
-17.3%
EBITDA
8,518
23,078
(14,560)
-63.1%
EBIT
790
13,837
(13,047)
-94.3%
Pre-tax profit (EBT)
1,722
14,227
(12,505)
-87.9%
Net Profit
2,247
10,044
(7,797)
-77.6%
The reclassification based on financial criteria is illustrated below:
(
€
/000)
31/12/2022
31/12/2021
Non-current assets
7
170,151
142,549
Non-current financial assets
10,972
10,708
Short-term assets
8
61,496
82,572
Short-term liabilities
9
(30,296)
(46,453)
Working capital
10
31,200
36,119
Provisions for risks and charges, Post-employment benefits,
deferred taxes
(2,664)
(2,954)
Net invested capital
209,659
186,422
Short-term net financial position
(22,298)
10,502
Medium/long-term net financial position
(76,336)
(82,515)
Total financial debt
11
(98,634)
(72,013)
Shareholders’ equity
111,025
114,409
7
Excluding Financial assets
8
Sum of Inventories, Trade receivables, Tax receivables and Other current receivables
9
Sum of Trade payables, Tax payables and Other liabilities
10
Difference between short-term assets and short-term liabilities
11
Determined in accordance with Consob Communication of 28 July 2006 (Note 23 of the separate
financial statements)
Sabaf Group | 2022 Report on Operations
15
Cash flows for the financial year are summarised in the table below:
(
€
/000)
2022
2021
Opening liquidity
29,733
1,595
Operating cash flow
14,096
17,187
Cash flow from investments (net of divestments)
(33,836)
(28,407)
Free cash flow
(19,740)
(11,220)
Cash flow from financing activities
(7,389)
39,358
Cash flow for the period
(27,129)
28,138
Closing liquidity
2,604
29,733
The financial year 2022 ended with a turnover 17.3% lower than in 2021, an extremely
positive year for the Company, due to the progressive deterioration in demand in the main
markets served by the Company.
The investments of the financial year were used:
- for €8.4 million for tangible assets (plant, machinery, equipment);
- for €2.7 million for intangible assets (mainly development costs)
- for €21 million to subscribe to capital increases in subsidiaries, in order to
financially support their development plans;
- for €6.3 million for the acquisition of 100% of the capital of P.G.A. s.r.l.
At 31 December 2022, working capital stood at €31.2 million compared with €36.1 million
at the end of the previous year: its percentage impact on turnover stood at 26.2% from
25.1% at the end of 2021.
The net financial debt was €98.6 million, compared with €72 million at 31 December 2021.
At the end of the year, shareholders' equity amounted to €111 million, compared with
€114.4 million in 2021. The ratio between the net financial debt and the shareholders’
equity was 89%; it was 63% at the end of 2021.
Sabaf Group | 2022 Report on Operations
16
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 2022 financial year and Group shareholders' equity at 31 December 2022 with
the same values of the parent company Sabaf S.p.A. is given below:
31/12/2022
31/12/2021
Description
Profit for
the year
Shareholde
rs’ equity
Profit for
the year
Shareholde
rs’ equity
Profit and shareholders’ equity of parent
company Sabaf S.p.A.
2,247
111,025
10,044
114,409
Equity and consolidated company results
19,541
132,974
15,008
96,538
Derecognition of the carrying value of
consolidated equity investments
722
(110,465)
300
(86,089)
Monetary revaluation - hyperinflation (IAS 29)
(6,077)
25,729
-
-
Put options on minorities
-
-
438
-
Intercompany eliminations
(1,176)
(3,013)
(1,250)
(2,414)
Other adjustments
(8)
(88)
143
(8)
Minority interests
-
-
(780)
(911)
Profit and shareholders’ equity
attributable to the Group
15,249
156,162
23,903
121,525
Proposal for allocation of 2022 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 2022, with the proposal
to allocate the profit for the year of €2,246,997 entirely to the Extraordinary Reserve.
17
CONSOLIDATED FINANCIAL
STATEMENTS
AT 31 DECEMBER 2022
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 2022
18
GROUP STRUCTURE AND CORPORATE BODIES
Group structure
Parent company
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%
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%
P.G.A. s.r.l.
100%
PGA2.0 s.r.l.
100%
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 2022
19
Consolidated statement of financial position
Notes
31/12/2022
31/12/2021
(
€
/000)
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
1
Investment property
2
Intangible assets
4
Equity investments
5
Non-current receivables
6
Deferred tax assets
22
Total non-current assets
CURRENT ASSETS
Inventories
7
Trade receivables
8
Tax receivables
9
Other current receivables
10
Current financial assets
11
Cash and cash equivalents
12
Total current assets
ASSETS HELD FOR SALE
3
TOTAL ASSETS
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY
Share capital
13
Retained earnings, Other reserves
14
Profit for the year
Total equity interest of the Group
Minority interests
Total shareholders’ equity
NON-CURRENT LIABILITIES
Loans
15
Post-employment benefit and retirement provisions
17
Provisions for risks and charges
18
Deferred tax liabilities
22
Total non-current liabilities
CURRENT LIABILITIES
Loans
15
Other financial liabilities
16
Trade payables
19
Tax payables
20
Other payables
21
Total current liabilities
LIABILITIES HELD FOR SALE
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
Sabaf Group | Consolidated financial statements at 31 December 2022
20
Consolidated income statement
Notes
2022
2021
(
€
/000)
INCOME STATEMENT COMPONENTS
OPERATING REVENUE AND INCOME
Revenue
24
Other income
25
Total operating revenue and income
OPERATING COSTS
Materials
26
(124,331 )
(142,355 )
Change in inventories
(513 )
Services
27
(50,180 )
(52,377 )
Personnel costs
28
(49,926 )
(53,964 )
Other operating costs
29
(1,631 )
(1,531 )
Costs for capitalised in-house work
Total operating costs
(223,149 )
(217,780 )
OPERATING PROFIT BEFORE DEPRECIATION AND
AMORTISATION, CAPITAL GAINS/LOSSES, AND
WRITE-DOWNS/WRITE-BACKS OF NON-CURRENT
ASSETS
Depreciations and amortisation
1, 2, 4
(18,267 )
(16,869 )
Capital gains on disposals of non-current assets
Value adjustments of non-current assets
(189 )
EBIT
Financial income
30
Financial expenses
31
(2,009 )
(1,179 )
Net income/(expenses) from hyperinflation
31
(9,023 )
Exchange rate gains and losses
32
(515 )
(7,399 )
Profits and losses from equity investments
33
(48 )
PROFIT BEFORE TAXES
Income taxes
34
(4,997 )
PROFIT FOR THE YEAR
of which:
Minority interests
PROFIT ATTRIBUTABLE TO THE GROUP
EARNINGS PER SHARE (EPS)
35
Base (€)
Diluted (€)
Sabaf Group | Consolidated financial statements at 31 December 2022
21
Consolidated statement of comprehensive income
2022
2021
(
€
/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
(61 )
(6 )
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
(8,660 )
(14,552 )
Hedge accounting for derivative financial instruments
(398 )
Total other profits/(losses) net of taxes for the year
(8,316 )
(14,930 )
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 2022
22
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 2020
(4,341 )
(31,503 )
(541 )
Allocation of 2020 profit
- carried forward
(7,789 )
- dividends
(6,172 )
(6,172 )
(6,172 )
IFRS 2 measurement stock grant plan
Treasury share transactions
(438 )
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 )
Monetary revaluation - hyperinflation (IAS 29)
Balance at 1 January 2022 restated
(3,903 )
(46,055 )
(521 )
Allocation of 2021 profit
- carried forward
(17,145 )
- dividends
(6,758 )
(6,758 )
(6,758 )
IFRS 2 measurement stock grant plan
Treasury share transactions
(875 )
(193 )
(193 )
Change in the scope of consolidation
(911 )
(127 )
Monetary revaluation - hyperinflation (IAS 29)
Other changes
(11 )
(11 )
(11 )
Total profit at 31 December 2022
(8,660 )
Balance at 31 December 2022
(3,221 )
(54,715 )
(328 )
Sabaf Group | Consolidated financial statements at 31 December 2022
23
Consolidated statement of cash flows
2022
2021
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
(251 )
(237 )
- Valuation of the stock grant plan
- Profits and losses from equity investments
Monetary revaluation IAS 29
- Net financial income and expenses
(1,783 )
- Income tax
(2,472 )
Change in post-employment benefit
(197 )
(85 )
Change in risk provisions
(860 )
(99 )
Change in trade receivables
(4,604 )
Change in inventories
(24,929 )
Change in trade payables
(17,156 )
Change in net working capital
(2,954 )
(16,469 )
Change in other receivables and payables, deferred taxes
(1,515 )
Payment of taxes
(7,733 )
(5,296 )
Payment of financial expenses
(2,097 )
(1,167 )
Collection of financial income
Cash flows from operations
Investments in non-current assets
- intangible
(3,153 )
(2,106 )
- tangible
(19,152 )
(22,803 )
- financial
Disposal of non-current assets
Cash flow absorbed by investments
(20,856 )
(23,752 )
Free cash flow
(536 )
Repayment of loans
(37,955 )
(47,381 )
Raising of loans
Short-term financial assets
Purchase/sale of treasury shares
(1,862 )
Payment of dividends
(6,690 )
(6,172 )
Cash flow absorbed by financing activities
(16,886 )
A.R.C. acquisition
(1,650 )
C.M.I. acquisition
(4,743 )
P.G.A. acquisition
(4,948 )
ARC Handan consolidation/deconsolidation
(97 )
Foreign exchange differences
(4,232 )
(4,070 )
Net cash flows for the year
(22,726 )
Cash and cash equivalents at end of year (Note 12)
Sabaf Group | Consolidated financial statements at 31 December 2022
24
Sabaf Group | Consolidated financial statements at 31 December 2022
25
Sabaf Group | Consolidated financial statements at 31 December 2022
26
12
Financial data at 31 December 2022 and economic results for the period for which the Group held
control (3 October - 31 December 2022) were consolidated.
Sabaf Group | Consolidated financial statements at 31 December 2022
27
Sabaf Group | Consolidated financial statements at 31 December 2022
28
Sabaf Group | Consolidated financial statements at 31 December 2022
29
Sabaf Group | Consolidated financial statements at 31 December 2022
30
Sabaf Group | Consolidated financial statements at 31 December 2022
31
Sabaf Group | Consolidated financial statements at 31 December 2022
32
Sabaf Group | Consolidated financial statements at 31 December 2022
33
Sabaf Group | Consolidated financial statements at 31 December 2022
34
Sabaf Group | Consolidated financial statements at 31 December 2022
35
Sabaf Group | Consolidated financial statements at 31 December 2022
36
Sabaf Group | Consolidated financial statements at 31 December 2022
37
Sabaf Group | Consolidated financial statements at 31 December 2022
38
Sabaf Group | Consolidated financial statements at 31 December 2022
39
Sabaf Group | Consolidated financial statements at 31 December 2022
40
Sabaf Group | Consolidated financial statements at 31 December 2022
41
Sabaf Group | Consolidated financial statements at 31 December 2022
42
Sabaf Group | Consolidated financial statements at 31 December 2022
43
Sabaf Group | Consolidated financial statements at 31 December 2022
44
Sabaf Group | Consolidated financial statements at 31 December 2022
45
Sabaf Group | Consolidated financial statements at 31 December 2022
46
Comments on significant balance sheet items
Sabaf Group | Consolidated financial statements at 31 December 2022
47
Sabaf Group | Consolidated financial statements at 31 December 2022
48
Sabaf Group | Consolidated financial statements at 31 December 2022
49
Sabaf Group | Consolidated financial statements at 31 December 2022
50
Sabaf Group | Consolidated financial statements at 31 December 2022
51
Sabaf Group | Consolidated financial statements at 31 December 2022
52
Sabaf Group | Consolidated financial statements at 31 December 2022
53
Sabaf Group | Consolidated financial statements at 31 December 2022
54
Sabaf Group | Consolidated financial statements at 31 December 2022
55
Sabaf Group | Consolidated financial statements at 31 December 2022
56
Sabaf Group | Consolidated financial statements at 31 December 2022
57
Sabaf Group | Consolidated financial statements at 31 December 2022
58
Sabaf Group | Consolidated financial statements at 31 December 2022
59
Sabaf Group | Consolidated financial statements at 31 December 2022
60
Sabaf Group | Consolidated financial statements at 31 December 2022
61
Sabaf Group | Consolidated financial statements at 31 December 2022
62
Sabaf Group | Consolidated financial statements at 31 December 2022
63
Sabaf Group | Consolidated financial statements at 31 December 2022
64
Sabaf Group | Consolidated financial statements at 31 December 2022
65
Sabaf Group | Consolidated financial statements at 31 December 2022
66
Sabaf Group | Consolidated financial statements at 31 December 2022
67
Sabaf Group | Consolidated financial statements at 31 December 2022
68
Sabaf Group | Consolidated financial statements at 31 December 2022
69
Sabaf Group | Consolidated financial statements at 31 December 2022
70
Sabaf Group | Consolidated financial statements at 31 December 2022
71
Sabaf Group | Consolidated financial statements at 31 December 2022
72
Sabaf Group | Consolidated financial statements at 31 December 2022
73
Sabaf Group | Consolidated financial statements at 31 December 2022
74
Sabaf Group | Consolidated financial statements at 31 December 2022
75
Sabaf Group | Consolidated financial statements at 31 December 2022
76
Sabaf Group | Consolidated financial statements at 31 December 2022
77
Sabaf Group | Consolidated financial statements at 31 December 2022
78
Sabaf Group | Consolidated financial statements at 31 December 2022
79
Name of the parent company: Sabaf S.p.A.
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 2022
80
Sabaf Group | Consolidated financial statements at 31 December 2022
81
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
82
SABAF S.p.A.
SEPARATE FINANCIAL STATEMENTS
AT 31 DECEMBER 2022
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
83
CORPORATE BODIES
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 Group | Sabaf S.p.A. Financial Statements at 31 December 2022
84
Statement of financial position
(in
€
)
NOTES
31/12/2022
31/12/2021
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
1
47,621,810
48,593,970
Investment property
2
983,333
2,311,476
Intangible assets
4
5,429,576
3,778,108
Equity investments
5
112,505,434
84,512,138
Non-current financial assets
6
10,375,117
10,707,311
- of which from related parties
39
10,375,117
10,707,311
Non-current receivables
7
634,348
31,852
Deferred tax assets
23
3,047,631
3,322,620
Total non-current assets
180,597,248
153,257,475
CURRENT ASSETS
Inventories
8
26,911,220
33,985,939
Trade receivables
9
28,315,040
45,194,276
- of which from related parties
39
8,108,979
15,210,599
Tax receivables
10
5,060,805
1,462,789
- of which from related parties
39
1,208,542
766,557
Other current receivables
11
1,208,792
1,929,121
Current financial assets
12
2,901,373
1,172,947
- of which from related parties
39
1,300,000
0
Cash and cash equivalents
13
2,604,007
29,733,148
Total current assets
67,001,238
113,478,220
ASSETS HELD FOR SALE
3
525,660
0
TOTAL ASSETS
248,124,145
266,735,695
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY
Share capital
14
11,533,450
11,533,450
Retained earnings, Other reserves
97,244,927
92,831,829
Profit for the year
2,246,997
10,043,877
Total shareholders’ equity
111,025,374
114,409,156
NON-CURRENT LIABILITIES
Loans
16
76,336,237
82,515,298
Post-employment benefit and retirement provisions
18
1,587,836
1,779,634
Provisions for risks and charges
19
354,595
851,081
Deferred tax liabilities
23
721,195
323,942
Total non-current liabilities
78,999,863
85,469,955
CURRENT LIABILITIES
Loans
16
27,241,978
19,010,029
- of which from related parties
39
2,500,000
0
Other financial liabilities
17
561,117
1,393,611
Trade payables
20
21,167,682
33,677,766
- of which from related parties
39
1,056,744
1,533,149
Tax payables
21
621,929
3,374,435
- of which from related parties
39
24,397
54,720
Other payables
22
8,506,203
9,400,743
Total current liabilities
58,098,908
66,856,584
LIABILITIES HELD FOR SALE
0
0
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
248,124,145
266,735,695
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
85
Income statement
NOTES
2022
2021
(in
€
)
INCOME STATEMENT COMPONENTS
OPERATING REVENUE AND INCOME
Revenue
25
119,089,523
144,033,787
- of which from related parties
39
17,099,638
20,212,450
Other income
26
6,511,215
6,195,079
- of which from related parties
39
2,921,090
2,029,702
Total operating revenue and income
125,600,738
150,228,866
OPERATING COSTS
Materials
27
(52,970,888)
(72,122,067)
- of which from related parties
39
(3,249,022)
(3,315,935)
Change in inventories
(7,074,719)
12,473,605
Services
28
(28,629,203)
(34,254,138)
- of which to related parties
39
(420,521)
(446,675)
Personnel costs
29
(30,575,199)
(34,780,110)
Other operating costs
30
(900,987)
(727,503)
Costs for capitalised in-house work
3,068,203
2,259,389
Total operating costs
(117,082,793)
(127,150,823)
OPERATING PROFIT BEFORE DEPRECIATION AND AMORTISATION,
CAPITAL GAINS/LOSSES, WRITE-DOWNS/WRITE-BACKS
OF NON-CURRENT ASSETS
8,517,946
23,078,043
Depreciations and amortisation
1,2,3,4
(8,485,132)
(9,179,378)
Capital gains/(losses) on disposal of non-current assets
1,565,126
238,136
- of which to related parties
39
1,362,808
110,367
Write-downs/write-backs of non-current assets
5
(808,000)
(300,000)
- of which to related parties
39
(808,000)
(300,000)
EBIT
789,939
13,836,801
Financial income
31
1,973,664
318,425
- of which to related parties
39
309,025
255,441
Financial expenses
32
(1,573,474)
(530,464)
Exchange rate gains and losses
33
353,659
426,824
Profits and losses from equity investments
34
177,833
175,504
- of which to related parties
177,833
175,504
PROFIT BEFORE TAXES
1,721,620
14,227,088
Income taxes
35
525,377
(4,183,212)
PROFIT FOR THE YEAR
2,246,997
10,043,877
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
86
Comprehensive income statement
2022
2021
(in
€
)
PROFIT FOR THE YEAR
2,246,997
10,043,877
Total profits/losses that will not be subsequently
reclassified under profit (loss) for the year
Actuarial evaluation of post-employment benefit
169,215
3,334
Tax effect
(40,612)
(800)
128,603
2,534
Total profits/losses that will not be subsequently
reclassified under profit (loss) for the year
Hedge accounting for derivative financial instruments
57,857
(198,499)
Total other profits/(losses) net of taxes for the year
186,460
(195,965)
TOTAL PROFIT
2,433,457
9,847,912
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
87
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 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
Allocation of 2021 profit:
- Payment of dividends
(6,758)
(6,758)
- to the extraordinary
reserve
3,286
(3,286)
0
Stock grant plan (IFRS 2)
1,134
1,134
Treasury share transactions
682
(875)
(193)
Total profit at
31 December 2022
128
58
2,247
2,433
Balance at 31 December 2022
11,533
10,002
2,307
(3,222)
(399)
88,557
2,247
111,025
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
88
Statement of Cash Flows
(
€
/000)
2022 FY
2021 FY
Cash and cash equivalents at beginning of year
29,733
1,595
Profit for the year
2,247
10,044
Adjustments for:
- Depreciations and amortisation
8,485
9,179
- Realised gains
(1,565)
(238)
- Write-downs of non-current assets
808
300
- Profits and losses from equity investments
(178)
(176)
- Valuation of the stock grant plan
1,134
805
- Net financial income and expenses
(400)
212
- Non-monetary foreign exchange differences
(361)
(340)
- Income tax
(525)
4,183
Change in post-employment benefit
(63)
(147)
Change in risk provisions
(496)
3
Change in trade receivables
16,879
(170)
Change in inventories
7,075
(12,474)
Change in trade payables
(12,510)
7,474
Change in net working capital
11,444
(5,170)
Change in other receivables and payables, deferred taxes
(973)
487
Payment of taxes
(4,360)
(1,738)
Payment of financial expenses
(1,472)
(530)
Collection of financial income
372
318
Cash flows from operations
14,097
17,187
Investments in non-current assets
- intangible
(2,749)
(1,934)
- tangible
(8,435)
(9,288)
- financial
(27,284)
(19,288)
Disposal of non-current assets
4,632
2,103
Cash flow absorbed by investments
(33,836)
(28,407)
Free cash flow
(19,739)
(11,220)
Repayment of loans
(19,368)
(23,032)
Raising of loans
19,728
73,229
Change in financial assets
624
(4,842)
Purchase/Sale of treasury shares
(1,862)
-
Payment of dividends
(6,690)
(6,172)
Collection of dividends
178
175
Cash flow absorbed by financing activities
(7,390)
39,358
Total cash flows
(27,129)
28,138
Cash and cash equivalents at end of year (Note 13)
2,604
29,733
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EXPLANATORY NOTES
ACCOUNTING STANDARDS
Statement of compliance and basis of presentation
The separate financial statements of Sabaf S.p.A. for the financial year 2022 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 2022.
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 2022, 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:
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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.
Leased assets
The Company 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 Company 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 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, the weighted average of which was 1.5% on 31 December
2022.
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
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those options will be exercised or not exercised, taking account of all relevant factors that create
an economic incentive relating to those decisions.
Assets held for sale
The Company classifies non-current assets as held for sale if their carrying value will be
recovered mainly through a sale transaction, rather than through their continued use. These
non-current assets classified as held for sale are measured at the lower of their carrying value
and their fair value less costs to sell. Selling costs are the additional costs directly attributable to
the sale, excluding financial expenses and taxes.
The condition for classification as held for sale is only met when the sale is highly probable and
the asset is available for immediate sale in its present condition. The actions required to
complete the sale should indicate that significant changes to the sale are unlikely or that the sale
will be cancelled. Management must be committed to the sale, which should be completed
within one year from the date of classification.
Depreciation of property, plant and equipment and amortisation of intangible assets stops when
they are classified as available for sale.
Assets and liabilities classified as held for sale are presented separately in the financial
statements.
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
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.
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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
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.
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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.
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 as financial assets at fair value through profit or
loss with reclassification of cumulative gains and losses or financial assets as financial assets at
fair value through profit or loss without reversal of cumulative gains and losses upon
derecognition.
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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.
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 Italian 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)".
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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,
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.
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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.
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.
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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 carrying 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 46.
This cost, together with the corresponding increase in shareholders' equity, is recognised under
personnel costs (Note 29) 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-
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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 and inventory write-downs at their expected sale value
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
based on management assumptions and estimates, resulting from experience and historical
results.
If the expected sale value is less than the purchase or production cost, inventories of finished
goods are written down to market value, estimated on the basis of current selling prices.
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.
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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.
Estimates and assumptions are regularly reviewed and the effects of each change immediately
reflected in the income statement.
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100
New accounting standards
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
materials used in the process) but also all costs directly attributable to the contractual activities
(such as depreciation of equipment used to perform the contract and costs of contract
management and control). General and administrative expenses are not directly related to a
contract and are excluded unless they are explicitly chargeable to the other party on the basis
of the contract.
These amendments had no impact on the separate financial statements.
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. These amendments had no impact on the separate financial statements.
Amendments to 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. This amendment
had no impact on the Company's separate consolidated financial statements as the Group is not
a first-time adopter.
Amendments to IFRS 3 “Reference to the Conceptual Framework”
The amendments are intended to replace references to the Framework for the Preparation and
Presentation of Financial Statements with the references to the Conceptual Framework for
Financial Reporting published in March 2018 without a significant change to the requirements
of the standard. The Board also added an exception to the measurement principles of IFRS 3 to
avoid the risk of potential "day-after" losses or gains arising from liabilities and contingent
liabilities that would fall within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately.
The exemption requires entities to apply the requirements of IAS 37 or IFRIC 21, rather than
the Conceptual Framework, to determine whether an obligation exists at the date of acquisition.
The amendment also added a new paragraph to IFRS 3 to clarify that contingent assets do not
qualify as recognisable assets at the date of acquisition. These amendments had no impact on
the Company's separate financial statements in that no contingent assets, liabilities or
contingent liabilities were recognised in the year for the purpose of these amendments.
Amendments to 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. This amendment had no impact on the Company's
separate financial statements in that there were no changes in the Company's financial liabilities
during the year.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
101
Amendments to 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. This amendment had no impact
on the Company's separate financial statements in that the Company does not have any assets
to which IAS 41 applies.
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 2022
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. IFRS 17 applies to all types of insurance contracts regardless of the type of entity
that issues them, as well as to certain guarantees and financial instruments with discretionary
participation features. IFRS 17 will be effective for financial years beginning on or after 1 January
2023, and will require the presentation of comparative balances. EARLY application is
permitted, in which case the entity must also have adopted IFRS 9 and IFRS 15 on or before the
date of first-time application of IFRS 17. This principle does not apply to the Company.
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 company is assessing the impact of the changes on the current
situation.
Amendments to IAS 8 “
Definition of accounting estimates
”
In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of
"accounting estimates". The amendments clarify the distinction between changes in accounting
standards and changes in accounting policies and corrections of errors. They also clarify how
entities use measurement techniques and inputs to develop accounting estimates. The
amendments are effective for financial years beginning on or after 1 January 2023 and apply to
changes in accounting standards and changes in accounting estimates that occur on or after the
beginning of that period. Early application is permitted provided that this fact is disclosed.
The changes are not expected to have a significant impact on the Company.
Amendments to IAS 1 and IFRS Practice Statement 2 "
Disclosure of Accounting
Standards
"
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making
Materiality Judgements, in which it provides guidance and examples to help entities apply
materiality judgements to the disclosure of accounting standards. The amendments to IAS 1 are
effective for annual periods beginning on or after 1 January 2023. Earlier application is
permitted. Since the amendments to PS 2 provide non-mandatory guidance on the application
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
102
of the definition of materiality to the disclosure of accounting standards, there is no need for an
effective date for these amendments.
The Company is currently assessing the impact of the amendments to determine the effect they
will have on the Company's disclosure of accounting standards.
Amendments to IAS 12
"Deferred Taxes on Assets and Liabilities Arising from a Single
Transaction"
In May 2021, the IASB issued amendments to IAS 12 that narrow the scope of the
initial
recognition exception in IAS 12, which no longer applies to transactions that give rise to both
taxable and deductible temporary differences.
Amendments are to be applied to transactions occurring after or at the beginning of the
comparative period presented. In addition, deferred tax assets (if sufficient taxable income is
available) and deferred tax liabilities are recognised at the beginning of the comparative period
for all deductible and taxable temporary differences relating to leases and provisions for
restoration.
The Company is currently assessing the impact of these changes.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
103
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 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
Increases
51
1,501
1,593
5,906
9,051
Disposals
-
(6,345)
(755)
-
(7,100)
Reclassification
240
6,099
185
(6,664)
(140)
At 31 December 2022
44,753
180,039
40,732
3,093
268,617
Accumulated
depreciation
18,531
154,288
33,084
-
205,903
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)
At 31 December 2021
21,001
161,203
36,008
-
218,212
Depreciations for the year
1,183
4,928
1,538
-
7,649
Derecognition due to
disposal
-
(4,558)
(308)
-
(4,866)
At 31 December 2022
22,184
161,573
37,238
-
220,995
Net carrying value
At 31 December 2022
22,569
18,466
3,494
3,093
47,622
At 31 December 2021
23,461
17,581
3,701
3,851
48,594
The breakdown of the net carrying value of Property was as follows:
31/12/2022
31/12/2021
Change
Land
5,404
5,404
-
Industrial buildings
17,165
18,057
(892)
Total
22,569
23,461
(892)
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 2022
212
-
674
887
Increases
-
-
169
169
Depreciations and amortisation
(43)
-
(282)
(325)
At 31 December 2022
169
-
561
730
The main investments during the year were aimed at keeping the production equipment up to
date and fully operational.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
104
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 2022, 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 2020
11,283
Increases
-
Disposals
(1,107)
At 31 December 2021
10,176
Increases
144
Disposals
(1,380)
Reclassification
(6,675)
At 31 December 2022
2,265
Accumulated amortisation
At 31 December 2020
8,030
Depreciations for the year
369
Derecognition due to disposal
(534)
At 31 December 2021
7,865
Depreciations for the year
299
Derecognition due to disposal
(733)
Reclassifications
(6,149)
At 31 December 2022
1,282
Net carrying value
At 31 December 2022
983
At 31 December 2021
2,311
This item includes non-operating buildings owned by the Company. Disposals during the period
resulted in a capital gain of approximately €243 thousand.
During the year, property with a net carrying value of €526 thousand was reclassified under
Available-for-sale non-current assets (Note 3).
Changes in investment property resulting from the application of IFRS 16 are shown below:
Investment
property
1 January 2022
3
Increase
144
Decrease
-
Depreciations and amortisation
(39)
At 31 December 2022
108
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
105
At 31 December 2022, 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.
4. INTANGIBLE ASSETS
Patents,
know-how and
software
Development
costs
Other
intangible
assets
Total
Cost
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
Increases
400
2,332
17
2,749
Decreases
79
(474)
-
(395)
Reclassifications
(142)
(22)
(1)
(165)
At 31 December 2022
7,581
9,477
658
17,716
Amortisation and
write-downs
At 31 December 2020
6,664
4,109
546
11,319
Depreciations and
amortisation
142
288
-
430
Decreases
-
-
-
-
At 31 December 2021
6,806
4,397
546
11,749
Depreciations and
amortisation
221
315
1
537
Decreases
-
-
-
-
At 31 December 2022
7,027
4,712
547
12,286
Net carrying value
At 31 December 2022
554
4,765
111
5,430
At 31 December 2021
438
3,244
96
3,778
Intangible assets have a finite useful life and, as a result, are amortised throughout their life.
Development costs are mainly related to the decision to extend the product range to include
induction cooking. To this end, a dedicated project team was set up to develop the project know-
how in-house, with patents, proprietary software and hardware. The first prototypes were
presented in 2022, with production starting in 2023. Investments in the development of gas parts
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
106
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 2022, 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.
5. EQUITY INVESTMENTS
31/12/2022
31/12/2021
Change
In subsidiaries
112,422
84,429
27,933
Other equity
investments
83
83
-
Total
112,505
84,512
27,933
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
107
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
P.G.A.
Total
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
Purchase
-
-
-
-
-
-
-
-
-
-
7,843
7,843
Value adjustment
(154)
(154)
Share capital
increase
-
-
-
1,000
3,177
14,935
-
-
-
2,000
-
21,112
31/12/22
10,329
13,161
139
8,900
6,305
32,107
6,450
8,782
21,044
4,770
7,843
119,830
Provision for write-downs
31/12/2020
0
0
0
6,300
0
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
0
6,600
Write-downs
-
-
-
808
-
-
-
-
-
-
-
808
31/12/22
0
0
0
7,408
0
0
0
0
0
0
0
7,408
Net carrying value
31/12/22
10,329
13,161
139
1,492
6,305
32,107
6,450
8,782
21,044
4,770
7,843
112,422
31/12/2021
10,329
13,161
139
1,300
3,128
17,172
6,450
8,782
21,198
2,770
84,429
Portion of shareholders’ equity (calculated in compliance with IFRS)
31/12/22
9,850
17,803
142
1,493
6,409
52,559*
8,548
11,840*
19,344
4,127
3,595
135,710
31/12/2021
8,462
15,716
158
1,317
3,092
15,396
7,371
2,961
15,503
2,755
0
72,731
Difference between shareholders’ equity and carrying value
31/12/22
(479)
4,642
3
1
104
20,452
2,098
3,058
(1,700)
(643)
(4,248)
23,288
31/12/2021
(1,867)
2,555
19
17
(36)
(1,776)
921
(5,821)
(5,695)
(15)
0
(11,698)
* values determined in accordance with IAS 29 - Financial Reporting in Hyperinflationary Economies, applied to companies in Turkey, hyperinflated country as from 1 April 2022
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
108
Faringosi Hinges s.r.l.
In 2022, the Faringosi Hinges achieved positive results - in terms of sales and profitability - both
compared to the previous year and compared to the budget. The 2023-2027 forward plan,
prepared at the beginning of 2023, envisages a decrease in sales in 2023, a gradual recovery in
the following years and the maintenance of good levels of profitability.
At 31 December 2022, 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
2023 to 2027 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 2023 to 2027.
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 11.65% (10.11% in the
impairment test carried out while preparing the separate financial statements at 31 December
2021) and a growth rate (g) of 2%, unchanged from the 2021 impairment test.
The recoverable amount calculated on the basis of the above-mentioned assumptions and
valuation techniques is €20.211 million, compared with a carrying value of the equity investment
of €10.329 million; consequently, the amount recognised for equity investment at 31 December
2022 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%
10.65%
21,294
21,611
21,947
22,303
22,681
11.15%
20,457
20,737
21,032
21,344
21,674
11.65%
19,701
19,950
20,211
20,486
20,776
12.15%
19,016
19,238
19,470
19,714
19,970
12.65%
18,392
18,590
18,797
19,015
19,243
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)
20,211
12,501
10,572
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
109
Sabaf do Brasil
In 2022, Sabaf do Brasil's results deteriorated as a result of the significant downturn in the
reference market. A significant recovery is expected as early as 2023. At 31 December 2022,
Shareholders’ equity (converted into euros at the end-of-year exchange rate) is higher than the
carrying amount of the equity investment.
Sabaf U.S.
The subsidiary Sabaf U.S. operates as a commercial support for North America.
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
equity investment was written down by €808 thousand against the loss of 2022 to bring it in line
with shareholders' equity.
Sabaf Beyaz Esya Parcalari Sanayi Ve Ticaret Limited Sirteki (Sabaf Turkey)
In 2022, Sabaf Turkey, a company active in the production of gas components and hinges,
reported sales in line with the previous year and a decrease in profitability compared to the
excellent results of 2021.
In view of the continuing hyperinflation in Turkey, at 31 December 2022, Sabaf S.p.A. tested for
the first time - 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 2023 to 2027 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 2023 to 2027.
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 16.27% and a growth rate
(g) of 2.5%.
The recoverable amount calculated on the basis of the above-mentioned assumptions and
valuation techniques is €64,671 million, compared with a carrying value of the equity investment
of €32.107 million; consequently, the amount recognised for equity investment at 31 December
2022 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
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
110
discount rate
2.00%
2.25%
2.50%
2.75%
3.00%
15.27%
66,888
67,138
67,948
68,510
69,095
15.77%
65,281
65,756
66,248
66,759
67,290
16.27%
63,787
64,221
64,671
65,137
65,621
16.77%
62,394
62,792
63,204
63,630
64,072
17.27%
61,092
61,458
61,836
62,227
62,632
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)
64,671
58,113
52,968
A.R.C. s.r.l.
A.R.C. s.r.l. performed very well during the 2022 financial year in terms of both turnover and
profitability. The 2023-2027 forward plan envisages a decline in sales in 2023, a gradual recovery
in the following years and the maintenance of a good level of profitability.
At 31 December 2022, 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
2023 to 2027 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 2023 to 2027.
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 11.19% (6.93% in the
impairment test carried out while preparing the Separate financial statements at 31 December
2021) and a growth rate (g) of 2% (unchanged from the impairment test carried out while
preparing the separate financial statements at 31 December 2021).
The recoverable amount calculated on the basis of the above-mentioned assumptions and
valuation techniques is €11.688 million, compared with a carrying value of the equity investment
of €6.450 million; consequently, the amount recognised for equity investment at 31 December
2022 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:
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
111
(
€
/000)
growth rate
discount rate
1.50%
1.75%
2.00%
2.25%
2.50%
10.19%
12,215
12,380
12,555
12,741
12,940
10.69%
11,889
11,944
12,096
12,259
12,430
11.19%
11,426
11,553
11,688
11,830
11,980
11.69%
11,090
11,203
11,322
11,447
11,579
12.19%
10,785
10,886
10,992
11,103
11,220
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)
11,688
10,768
9,848
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.
Okida Elektronik performed extremely well also in 2022.
At 31 December 2022, 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
2023 to 2027 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 2023 to 2027.
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 16.81% (15.21% in the impairment test
carried out while preparing the separate financial statements at 31 December 2021) and a
growth rate (g) of 2.50%, unchanged from the 2021 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 €13.867 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 2022 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:
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
112
(
€
/000)
growth rate
discount rate
2.00%
2.25
2.50%
2.75%
3.00%
15.81%
14,541
14,695
14,855
15,022
15,194
16.31%
14,056
14,197
14,343
14,495
14,652
16.81%
13,603
13,733
13,867
14,006
14,150
17.31%
13,181
13,300
13,423
13,550
13,682
17.81%
12,785
12,895
13,008
13,125
13,246
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)
13,867
12,487
11,019
C.M.I. s.r.l.
C.M.I. s.r.l. recognised a strong increase in turnover in 2022 compared to the previous year.
The 2023-2027 forward plan envisages a decline in sales in 2023, a gradual recovery in the
following years and the maintenance of a good level of profitability.
At 31 December 2022, 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
2023 to 2027 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 2023 to 2027.
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 11.66% (11.31% in the impairment test
carried out while preparing the Separate financial statements at 31 December 2021) 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 2021).
The recoverable amount calculated on the basis of the above-mentioned assumptions and
valuation techniques is €52.133 million, compared with a carrying value of the equity investment
of €21.044 million; consequently, the amount recognised for equity investment at 31 December
2022 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:
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
113
(
€
/000)
growth rate
discount rate
1.50%
1.75%
2.00%
2.25%
2.50%
10.66%
55,785
56,833
58,044
59,274
60,580
11.16%
52,938
53,906
54,927
56,005
57,145
11.66%
50,372
51,230
52,133
53,084
54,086
12.16%
48,048
48,813
49,615
50,458
51,345
12.66%
45,933
46,618
47,335
48,086
48,875
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)
52,133
50,334
41,649
Sabaf India Private Limited
Sabaf India started production of gas components in 2022 for the local market, which is expected
to grow strongly in the coming years. The Group believes that the difference between the
carrying value of the equity investment and shareholders’ equity converted at the year-end
exchange rate, mainly due to the depreciation of the rupee, can be recovered in the coming
years with the achievement of positive income results.
Sabaf Mexico S.A. de C.V.
During the financial year 2021, a new company was established in San Luis Potos (Mexico),
where a plot of land was acquired and construction work is in progress on a new plant to produce
components for the North American market. Production is scheduled to start in the first half of
2023.
P.G.A. s.r.l.
In October 2022, the Company acquired 100% of P.G.A. S.r.l. (P.G.A.), a company based in
Fabriano (AN) that has been active for over 25 years in the field of design and assembly of
electronic control boards for the household appliances sector.
The carrying value of the equity investment, equal to €7,843 million, includes, in addition to the
price paid at the date of the transaction, subsequent contractual price adjustments related to the
valuation of the net financial position at the acquisition date, the achievement of economic
performance targets ("earn-outs"), and accrued receivables from the former shareholders of
P.G.A. related to the compensation obligations envisaged upon the occurrence of certain events
(liabilities incurred by P.G.A.) regulated by the acquisition agreement.
At 31 December 2022, the Company tested - with the support of independent experts - the
carrying value of the equity investment for impairment, determining its recoverable amount by
discounting expected future cash flows in the forward plan drafted by the management. Cash
flows for the period from 2023 to 2024 were augmented by the terminal value, which expresses
the operating flows that the company 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
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
114
rate (WACC) of 10.88% and a growth rate (g) of 2%, representative of expected future growth
rates for the reference market.
The recoverable amount calculated on the basis of the above-mentioned assumptions and
valuation techniques is €14.375 million, compared with a carrying value of the equity investment
of €7,843 million; consequently, the amount recognised for equity investment at 31 December
2022 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%
9.88%
15,457
15,896
16,364
16,862
17,393
10.38%
14,513
14,900
15,310
15,746
16,209
10.88%
13,669
14,012
14,375
14,759
15,165
11.38%
12,911
13,217
13,540
13,880
14,239
11.88%
12,226
12,500
12,789
13,092
13,412
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)
14,375
12,463
10,551
6. NON-CURRENT FINANCIAL ASSETS
31/12/2022
31/12/2021
Change
Financial receivables from
subsidiaries
10,375
10,707
(332)
Total
10,375
10,707
(332)
At 31 December 2022, financial receivables from subsidiaries consist of:
- an interest-bearing loan of USD 2 million (€1.875 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.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
115
7. NON-CURRENT RECEIVABLES
31/12/2022
31/12/2021
Change
Receivables from former P.G.A.
shareholders
597
-
597
Guarantees
37
32
5
Total
634
32
602
Receivables from former P.G.A. shareholders refer to compensation obligations envisaged upon
the occurrence of certain events (liabilities incurred by P.G.A.) regulated by the acquisition
agreement.
These receivables, already accrued and agreed upon between the parties, were discounted. The
effect of discounting was recorded under financial income (Note 31).
8. INVENTORIES
31/12/2022
31/12/2021
Change
Raw Materials
11,313
13,381
(2,068)
Semi-processed goods
7,941
9,400
(1,459)
Finished products
9,446
12,990
(3,544)
Provision for inventory write-
downs
(1,789)
(1,785)
(4)
Total
26,911
33,986
(7,075)
The value of final inventories at 31 December 2022 decreased compared to the end of the
previous year as a result of lower business volumes in the second half of the year.
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 €529 thousand, semi-finished products for €298
thousand and finished products for €962 thousand. The following table shows the changes in
the Provision for inventory write-downs during the current financial year:
31/12/2021
1,785
Provisions
42
Utilisation
(38)
31/12/2022
1,789
9. TRADE RECEIVABLES
31/12/2022
31/12/2021
Change
Trade receivables from third parties
20,806
30,584
(9,778)
Trade receivables from subsidiaries
8,109
15,210
(7,101)
Bad debt provision
(600)
(600)
0
Net total
28,315
45,194
(16,879)
At 31 December 2022, trade receivables included balances totalling USD 4,102 thousand,
booked at the EUR/USD exchange rate in effect on 31 December 2022, equal to 1.0666. The
amount of trade receivables recognised in the financial statements includes approximately €12
million in insured receivables (€13 million at 31 December 2021).
There were no significant changes in average payment terms agreed with customers.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
116
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:
31/12/2022
31/12/2021
Change
Current receivables (not past
due)
17,016
27,304
(10,288)
Outstanding up to 30 days
2,118
1,844
274
Outstanding from 30 to 60
days
769
348
421
Outstanding from 60 to 90
days
169
211
(42)
Outstanding for more than 90
days
734
877
(143)
Total
20,806
30,584
(9,778)
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:
31/12/2021
Provisions
Utilisation
31/12/2022
Bad debt provision
600
0
0
600
10. TAX RECEIVABLES
31/12/2022
31/12/2021
Change
For income tax
4,515
1,104
3,411
for VAT
546
359
187
Total
5,061
1,463
3,598
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 2022, income tax receivables include:
- the receivable from the subsidiary C.M.I. s.r.l. amounting to €682 thousand
- the receivable from the subsidiary Faringosi Hinges s.r.l amounting to €266 thousand
- the receivable from the subsidiary ARC s.r.l. amounting to €260 thousand,
relating to the balance of the 2022 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:
- €1.496 million of receivables for investments in capital equipment referred to Decree Law
160/2019, Budget Law 178/2020 and Budget Law 234/2021
- unused tax credits for energy-intensive and gas-intensive companies of €718 thousand
- receivables for higher payments on account paid in 2022, specifically IRES for €900 thousand
and IRAP for €94 thousand.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
117
11. OTHER CURRENT RECEIVABLES
31/12/2022
31/12/2021
Change
Credits to be received from suppliers
685
1,240
(555)
Advances to suppliers
113
426
(313)
Due from INAIL
0
5
(5)
Other
411
258
153
Total
1,209
1,929
(720)
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 2022 to a smaller extent
than in the previous year.
12. CURRENT FINANCIAL ASSETS
31/12/2022
31/12/2021
Change
Restricted bank accounts
-
1,173
(1,173)
Financial receivables from subsidiaries
1,300
-
1,300
Interest rate derivatives
1,601
-
1,601
Total
2,901
1,173
1,728
In 2022, the term deposit of €1.173 million 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 was paid.
At 31 December 2022, financial receivables from subsidiaries consist of:
- an interest-bearing loan of €1 million granted to C.M.I. s.r.l.
- an interest-bearing loan of €300 thousand to C.G.D. s.r.l.
as part of the coordination of the Group's financial management.
At 31 December 2022, the Company has in place five interest rate swap (IRS) contracts for
amounts and maturities coinciding with six unsecured loans that are being amortised, whose
residual value at 31 December 2022 is €24,640 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 “Fair Value through profit or loss”, with "Financial income" as a
balancing entry.
13. CASH AND CASH EQUIVALENTS
The item Cash and cash equivalents, equal to €2,604 thousand at 31 December 2022 (€29,733
thousand at 31 December 2021), refers almost exclusively to bank current account balances.
Please refer to the Statement of Cash Flows for an analysis of changes in liquidity during the
year.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
118
14. 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 2022, the structure of the share capital is shown in the table below.
No. of shares
% of share
capital
Rights and
obligations
Ordinary shares
7,915,422
68.63%
--
Ordinary shares with
increased vote
3,618,028
31.37%
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 Company. The availability of reserves is indicated in a table at the end of these
Explanatory Notes.
15. 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 2022, 79,128 ordinary shares of the Company were allocated and
transferred to the beneficiaries of Cluster 2, through the use of shares already available to the
issuer.
Moreover, during the financial year:
- 81,321 treasury shares were purchased at an average price of €22.89 per share;
- 99,132 treasury shares were sold as part of the acquisition of 100% of the capital of P.G.A. s.r.l.
on 3 October 2022, for which 25% of the price was paid in shares.
At 31 December 2022, the Company is the owner of 214,683 treasury shares (1.86% of the share
capital), reported in the financial statements as an adjustment to shareholders’ equity at a
weighted average unit value of €14.990 (the closing stock market price of the Share at 31
December 2022 was €16.689). There were 11,318,587 outstanding shares at 31 December 2022
(11,221,648 at 31 December 2021).
The item "Retained earnings, Other reserves" amounting to €97,245 thousand included as at 31
December 2022:
▪ the stock grant reserve of €1,939 thousand, which included the measurement at 31
December 2022 of the fair value of rights assigned to receive shares of the Parent
Company relating to the 2021 – 2023 Stock Grant Plan, medium- and long-term incentive
plan for directors and employees of the Sabaf Group, for the details of which reference is
made to Note 46;
▪ the
Hedge Accounting
reserve, negative for €14 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.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
119
Opening value at 31 December 2021
(71)
Change during the period
57
Value at 31 December 2022
(14)
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 38, in the paragraph Foreign exchange risk management
16. LOANS
31/12/2022
31/12/2021
Current
Non-
current
Total
Current
Non-
current
Total
Bond issue
-
29,685
29,685
-
29,649
29,649
Unsecured loans
18,348
45,457
63,805
16,732
51,410
68,142
Leases
473
1,194
1,667
437
1,456
1,893
Short-term bank
loans
8,421
-
8,421
1,841
-
1,841
Total
27,242
76,336
103,578
19,010
82,515
101,525
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. The loan
has the following covenants, defined with reference to the Group consolidated figures widely
complied with at 31 December 2022 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 a new unsecured loan of €13 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 2022 equal to €49.9 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 2022 equal to €40.4 million)
widely complied with at 31 December 2022 and for which, according to the Group's business
plan, compliance is also expected in subsequent years.
All bank loans are denominated in euro.
To manage interest rate risk, some unsecured loans (with a total residual value of €51.450 million
at 31 December 2022) are either fixed-rate or hedged by IRS.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
120
The following table shows the changes in lease liabilities during the year:
Lease liabilities at 1 January 2021
2,107
New agreements signed during 2021
275
Repayments during 2021
(489)
Lease liabilities at 31 December 2021
1,893
New agreements signed during 2022
313
Repayments during 2022
(524)
Lease liabilities at 31 December 2022
1,682
Note 38 provides information on financial risks, pursuant to IFRS 7.
17. OTHER FINANCIAL LIABILITIES
31/12/2022
31/12/2021
Current
Non-current
Current
Non-current
Payables to former PGA
shareholders
371
175
-
-
Payables to former C.M.I.
shareholders
-
-
1,173
-
Derivative instruments on
interest rates
-
-
72
-
Currency derivatives
15
-
149
-
Total
386
175
1,394
-
The payable to former P.G.A. shareholders refers to price adjustments following the completion
of the acquisition and determined in accordance with contractual provisions.
The payable to C.M.I. shareholders, which amounted to €1,173 thousand at 31 December 2021
and related to the portion of the price not yet paid to the Chinese group Guandong Xingye
Investment, seller of C.M.I., was paid in 2022.
18. Post-employment benefit
At 31 December 2021
1,780
Financial expenses
36
Payments made
(58)
Tax effect
(170)
At 31 December 2022
1,588
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
31/12/2022
31/12/2021
Discount rate
3.62%
0.40%
Inflation
3%
1.30%
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
121
Demographic theory
31/12/2022
31/12/2021
Mortality rate
IPS55 ANIA
IPS55 ANIA
Disability rate
INPS 2000
INPS 2000
Staff turnover
6%
7%
Advance payouts
1.50% per year
2% per year
Retirement age
pursuant to legislation in
force on 31 December 2022
Pursuant to legislation in
force at 31 December 2021
19. PROVISIONS FOR RISKS AND CHARGES
31/12/2021
Provisions
Utilisation
31/12/2022
Provision for agents’
indemnities
245
9
(6)
248
Product guarantee
fund
60
23
(23)
60
Provision for tax risks
500
-
(500)
-
Provision for legal
risks
46
-
-
46
Total
851
32
(529)
354
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.
Following the settlement of a tax dispute, in the first half of 2022, the provision for risks and
charges in which a specific provision of the same amount was recognised, was used in the
amount of €500 thousand.
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.
20. TRADE PAYABLES
31/12/2022
31/12/2021
Change
Total
21,168
33,678
(12,150)
The decrease in trade payables is related to the decline in production volumes in the second
half of the year.
Average payment terms did not change versus the previous year. At 31 December 2022, there
were no overdue payables of a significant amount and the Company did not receive any
injunctions for overdue payables.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
122
21. TAX PAYABLES
31/12/2022
31/12/2021
Change
To inland revenue for income tax
6
2,703
(2,697)
To subsidiaries for income tax
24
55
(31)
To inland revenue for IRPEF tax
deductions
592
616
(24)
Total
622
3,374
(2,752)
More details on income tax payables can be found in Note 35.
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 2022, 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.
22. OTHER CURRENT PAYABLES
31/12/2022
31/12/2021
Change
To employees
3,857
5,095
(1,238)
To social security institutions
1,987
2,238
(251)
Advances from customers
273
1,200
(927)
To agents
140
216
(76)
Other current payables
2,249
652
1,597
Total
8,506
9,401
(895)
At the beginning of 2023, 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, of which €1,564
thousand refer to the accrual basis of accounting of tax benefits driving from investments in
capital goods referred to Decree Law 160/2019, Budget Law 178/2020 and Budget Law
234/2021
23. DEFERRED TAX ASSETS AND LIABILITIES
31/12/2022
31/12/2021
Change
Deferred tax assets
3,048
3,323
(275)
Deferred tax liabilities
(721)
(324)
(397)
Net position
2,327
2,999
(672)
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.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
123
Amortisation
and leasing
Provisions
and value
adjustments
Fair
value of
derivative
instruments
Goodwill
Actuarial
evaluation
of post-
employment
benefit
Other
temporary
differences
Total
At 31
December
2020
927
878
45
1,240
176
396
3,662
Through profit
or loss
(184)
(131)
(10)
(177)
-
(160)
(662)
In shareholders'
equity
-
-
-
-
(1)
-
(1)
At 31
December
2021
743
747
35
1,063
175
236
2,999
Through profit
or loss
(278)
309
(420)
(177)
-
(67)
(633)
In shareholders'
equity
-
-
2
-
(41)
-
(39)
At 31
December
2022
465
1,056
(383)
886
134
169
2,327
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 Italian law Decree 98/2011, deductible in ten
instalments starting in 2018.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
124
24. 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:
31/12/2022
31/12/2021
Change
A.
Cash
2,604
29,733
(27,129)
B.
Cash equivalents
-
-
-
C.
Other current financial assets
2,901
1,173
1,728
D.
Liquidity (A+B+C)
5,505
30,906
(25,401)
E.
Current financial payable
8,982
3,235
5,747
F.
Current portion of non-current financial debt
18,821
17,169
1,652
G.
Current financial debt (E+F)
27,803
20,404
7,399
H.
Net current financial debt (G-D)
22,298
(10,502)
32,800
I.
Non-current financial payable
46,651
52,866
(6215)
J.
Debt instruments
29,685
29,649
36
K.
Trade payables and other non-current payables
-
-
-
L.
Non-current financial debt (I+J+K)
76,336
82,515
(6,179)
M.
Total financial debt (H+L)
98,634
72,013
26,621
The 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.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
125
Comments on key income statement items
25. REVENUE
In 2022, sales revenue amounted to €119,090 thousand, 17.3% lower than the €144,034
thousand in 2021.
Revenue by geographical area
2022
%
2021
%
% change
Europe (excluding Turkey)
39,496
33.2%
48,788
33.9%
-19%
Turkey
30,470
25.6%
35,496
24.6%
-14.2%
North America
11,136
9.4%
10,088
7.0%
+10.4%
South America
13,600
11.4%
20,688
14.4%
-34.3%
Africa and Middle East
16,890
14.2%
16,930
11.8%
-0.2%
Asia and Oceania
7,498
6.3%
12,044
8.4%
-37.7%
Total
119,090
100%
144,034
100%
-17.3%
Revenue by product family
2022
%
2021
%
% change
Valves and thermostats
48,917
41.1%
60,006
41.7%
-18.5%
Burners
51,992
43.7%
63,959
44.4%
-18.7%
Accessories and other revenues
18,181
15.3%
20,069
13.9%
-9.4%
Total
119,090
100%
144,034
100%
-17.3%
After an extraordinarily positive 2021 for the Company and its market, demand progressively
deteriorated in 2022, with the downturn becoming more pronounced in the second half of the
year. The only geographical area that maintained a positive revenue trend was North America,
also supported by the development of business relations with main sector players.
Average sales prices in 2022 were approximately 10% higher than in 2021, largely offsetting
considerable increases in the purchase prices of the main raw materials (aluminium alloys, steel
and brass), electricity and gas.
26. OTHER INCOME
2022
2021
Change
Sale of trimmings
2,430
2,696
(266)
Services to subsidiaries
2,159
1,295
864
Royalties to subsidiaries
305
213
92
Contingent income
280
307
(27)
Rental income
122
123
(1)
Use of provisions for risks and charges
29
1
28
Other income
1,186
1,560
(374)
Total
6,511
6,195
316
Services to subsidiaries refer to administrative, commercial and technical services provided
within the scope of the Group.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
126
In 2022, other income includes €416 thousand of benefits granted as tax credits for investments
made in 2022 (Law 160/2019 paragraphs 184 to 196, Law 178/2020 and Law 234/2021).
27. MATERIALS
2022
2021
Change
Commodities and outsourced
components
48,071
66,870
(18,799)
Consumables
4,900
5,252
(352)
Total
52,971
72,122
(19,151)
The reduction in purchases is related to the decrease in business volumes, while the unit prices
of the main raw materials (aluminium alloys, steel and brass) increased significantly and on
average by about 20% compared to the previous year.
28. COSTS FOR SERVICES
2022
2021
Change
Outsourced processing
7,660
12,701
(5,041)
Electricity and natural gas
6,889
6,092
797
Maintenance
3,789
4,975
(1,186)
Advisory services
2,750
2,421
329
Transport and export expenses
2,189
2,475
(286)
Directors’ fees
442
477
(35)
Insurance
611
541
70
Commissions
633
770
(137)
Travel expenses and allowances
431
136
295
Waste disposal
424
539
(115)
Canteen
279
325
(46)
Temporary agency workers
399
487
(88)
Other costs
2,133
2,315
(182)
Total
28,629
34,254
(5,625)
The main outsourced processing carried out by the Company include aluminium die-casting,
hot moulding of brass and some mechanical processing and assembly. As a result of lower
activity levels compared to the previous year, some production stages that had been outsourced
to external suppliers in 2021 to cope with peaks in demand were internalised.
The increase in energy costs was due to the exceptional increase in electricity and gas prices.
The Company estimated that the impact of this increase, on a like-for-like basis compared to
the previous year, amounted to €2.5 million in higher charges.
29. PERSONNEL COSTS
2022
2021
Change
Salaries and wages
18,199
20,670
(2,471)
Social Security costs
5,779
6,433
(654)
Temporary agency workers
3,819
5,229
(1,410)
Post-employment benefit and
other costs
1,644
1,643
1
Stock grant plan
1,134
805
329
Total
30,575
34,780
(4,205)
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
127
Average of the Company headcount at 31 December 2022 totalled 461 employees (324 blue-
collars, 122 white-collars and supervisors, 15 managers), compared with 473 in 2021 (335 blue-
collars, 125 white-collars and supervisors, 13 managers). The number of temporary staff with
temporary work contract was 68 at 31 December 2022 (115 at the end of 2021).
The item "Stock Grant Plan" included the measurement at 31 December 2022 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 46.
30. OTHER OPERATING COSTS
2022
2021
Change
Non-income related taxes and
duties
379
375
4
Losses and write-downs of trade
receivables
0
100
(100)
Contingent liabilities
173
53
120
Other provisions
32
28
4
Other operating expenses
317
172
145
Total
901
728
173
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 19.
31. FINANCIAL INCOME
2022
2021
Change
Interests receivable from banks
5
1
4
Interests receivable from loans
309
255
54
IRS spreads receivable
1,626
-
1,626
Other financial income
34
63
(29)
Total
1,974
319
1,655
32. FINANCIAL EXPENSES
2022
2021
Change
Interest paid to banks
1,157
322
835
Banking expenses
149
177
(28)
Other financial expense
267
31
236
Total
1,573
530
1,043
Other financial expenses include €101 thousand for the discounting of the receivable from the
former shareholders of P.G.A. s.r.l. described in Note 6.
33. EXCHANGE RATE GAINS AND LOSSES
In 2022, the Company reported net foreign exchange gains of €354 thousand (net gains of €427
thousand in 2021) due to the gradual strengthening of the dollar against the euro during the year.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
128
34. PROFITS AND LOSSES FROM EQUITY INVESTMENTS
2022
2021
Change
Dividends received from Okida Elektronik
178
176
2
Total
178
176
2
35. INCOME TAXES
2022
2021
Change
Current taxes
(1,015)
2,961
(3,976)
Deferred tax assets and liabilities
633
662
(29)
Taxes related to previous financial
years
(159)
36
(195)
Taxes on foreign dividends
16
24
(8)
Provision for tax risks
-
500
(500)
Total
(525)
4,183
(4,708)
Negative taxes related to the tax loss for the 2022 tax year are recognised in current taxes for
2022.
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:
2022
2021
Theoretical income tax
413
3,414
Taxes related to previous financial years
(71)
28
Tax effect of dividends from investee companies
(25)
(16)
“Iper and Superammortamento” tax benefit
(603)
(641)
Permanent tax differences
196
74
Tax effect on tax credit for energy-intensive and gas-intensive companies
(505)
Tax credit on sanitisation costs
-
(14)
Provision for tax risks
-
500
IRES (current and deferred)
(595)
3,345
IRAP (current and deferred)
70
838
Total
(525)
4,183
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.
36. DIVIDENDS
On 1 June 2022, shareholders were paid an ordinary dividend of €0.60 per share (total dividends
of €6,616 thousand in implementation of the shareholders' resolution of 28 April 2022.
For the current financial year, the Directors have proposed not to distribute dividends to
shareholders.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
129
37. 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.
38. 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.
31/12/2022
31/12/2021
Financial assets
Amortised cost
Cash and cash equivalents
2,604
29,733
Trade receivables and other receivables
29,523
46,991
Non-current loans
10,376
10,708
Other financial assets
1,300
1,173
Fair Value through profit or loss
Derivatives cash flow hedges (on interest rates)
1,601
-
Financial liabilities
Amortised cost
Loans
103,578
101,525
Other financial liabilities
547
1,173
Trade payables
21,168
33,545
Fair Value through profit or loss
Derivatives cash flow hedges (on interest rates)
-
149
Hedge accounting
Derivatives cash flow hedges (on currency)
14
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 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 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
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
130
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 42% 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 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 13.3% of total turnover in 2022,
while purchases in dollars represented 5% of total turnover. During the year, operations in
dollars were partially hedged through forward sales contracts. At 31 December 2022, there is a
forward sales contract for $500 thousand maturing in March 2023, at an exchange rate of 1.0792.
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
.
(amounts in
€
/000)
2022
Reduction in financial assets
-
Increase in current financial liabilities
(57)
Adjustment to the Cash Flow Hedge reserve (equity reserve)
58
Negative impact through profit or loss
383
Company
Counterparty
Instrument
Maturity
Value
date
Notional
(in thousands)
Fair value
hierarchy
Sabaf S.p.A.
MPS
Forward
31/03/2023
USD
1,000,000
2
Sensitivity analysis
With reference to financial assets and liabilities in US dollars at 31 December 2022, a
hypothetical and immediate revaluation of 10% of euro against the dollar would have led to a
loss of €410 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 2022, IRS
totalling €24.6 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.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
131
The following table shows the characteristics of the derivative financial instruments described
in the previous paragraph
.
Company
Counterparty
Instrumen
t
Maturity
Value
date
Notional
Fair value
hierarchy
Sabaf S.p.A.
MPS
IRS
30/06/2023
EUR
500,000
2
Intesa Sanpaolo
15/06/2024
3,600,000
Intesa Sanpaolo
15/06/2024
1,110,000
Crédit Agricole
30/06/2025
6,600,000
Mediobanca
28/04/2027
12,830,000
Sensitivity analysis
Considering the IRS in place, at the end of 2022 almost 80% of the Company's gross financial
debt was at a fixed rate.
With reference to financial liabilities at variable rate at 31 December 2022, a hypothetical and
immediate increase of 1% of interest rates would have led to a loss of €210 thousand.
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 2022, 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 2022 and 2021, 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 2022 of 54.0%, net financial debt/EBITDA of 2.10) 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 2022 and 31 December 2021 is
shown below.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
132
At 31 December 2022
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
64,643
67,622
2,207
17,536
47,879
-
Bond issue
29,685
33,939
-
563
8,251
25,125
Short-term bank loans
8,420
8,420
921
7,499
-
-
Payables to former P.G.A.
shareholders
547
547
372
-
175
-
Total financial payables
103,259
110,528
3,128
25,598
56,305
25,125
Trade payables
21,168
21,168
19,329
1,839
-
-
Total
124,427
131,696
22,829
27,437
56,305
25,125
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
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 measured at fair value at 31 December 2022,
by hierarchical level of fair value assessment.
Level 1
Level 2
Level 3
Total
Other financial liabilities (interest rate derivatives)
-
1,601
-
1,601
Total assets and liabilities at fair value
-
1,601
-
1,601
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
133
39. 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
2022
Subsidiarie
s
Other
related
parties
Total
related
parties
Impact
on the total
Non-current financial assets
10,375
10,375
-
10,375
100%
Trade receivables
28,315
8,109
-
8,109
28.64%
Tax receivables
5,061
1,209
-
1,209
23.89%
Current financial assets
2,901
1,300
-
1,300
44.81%
Short-term financial payables
27,242
2,500
-
2,500
9.18%
Trade payables
21,168
1,057
5
1,062
5.02%
Tax payables
622
24
-
24
3.86%
Total
2021
Subsidiarie
s
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%
Impact of related-party transactions on income statement items
Total
2022
Subsidiaries
Other
related
parties
Total related
parties
Impact
on the total
Revenue
119,090
17,100
-
17,100
14.36%
Other income
6,511
2,921
-
2,921
44.86%
Materials
52,971
3,249
-
3,249
6.13%
Services
28,629
421
24
445
1.55%
Capital gains on non-current assets
1,565
1,362
-
1,362
87.03%
Financial income
1,973
309
-
309
15.66%
Financial expenses
1,573
10
-
10
0.64%
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
110
-
110
46.22%
Financial income
318
255
-
255
80.19%
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
134
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, which are of minor importance, are regulated by specific contracts
regulated at arm’s length conditions.
40. SIGNIFICANT NON-RECURRING EVENTS AND TRANSACTIONS
Pursuant to the Consob memorandum of 28 July 2006, the Group declares that no significant
non-recurring events or transactions, as defined by the memorandum, took place in 2022.
41. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
There were no important events after the 2022 reporting period.
42. 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 carried out during
2022.
43. 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).
44. COMMITMENTS
Guarantees issued
Sabaf S.p.A. also issued sureties to guarantee mortgage loans granted by banks to employees
for a total of €2,855 thousand (€3,443 thousand at 31 December 2021).
45. 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.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
135
46. SHARE-BASED PAYMENTS
A plan for the free allocation of shares, approved by the Shareholders' Meeting of 6 May 2021,
is in place; The related Regulations were approved by the Board of Directors on 13 May 2021.
Purpose
The Plan aims 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.
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, €1,134 (Note 28) were recognised in personnel costs during the
year, an equity reserve of the same amount (Note 14) 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
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
136
estimate of the expected probability of achieving the objectives for each reference period, the
unitary fair value at 31 December 2022 was determined as follows:
Rights relating to business
objectives measured on ROCE
Total value on ROCE
13.74
Fair Value
4.81
Rights on ROCE
35%
Rights relating to business
objectives measured EBITDA
Total value on EBITDA
15.92
Fair Value
6.37
Rights on EBITDA
40%
Rights relating to ESG objectives
measured on personnel training
Total value on
“Personnel training”
20.41
Fair Value
1.02
Rights on “Personnel
training”
5%
Rights relating to ESG objectives
measured on safety indicator
Total value on “Safety
indicator”
7.82
Fair Value
0.39
Rights on “Safety
indicator”
5%
Rights relating to ESG objectives
measured on emissions reduction
Total value on
“Emission reduction”
20.41
Fair Value
3.06
Rights on “Emission
reduction”
15%
Fair value per share
15.65
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
137
Summary of public grants pursuant to Article 1, paragraphs 125-129, Italian Law
no. 124/2017
In compliance with the requirements of transparency and publicity envisaged pursuant to Italian
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)
1,170
Italian State
Energy-intensive contributions
1,388
Italian State
Total
2,558
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, 2021 Budget Law, 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 Italian 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.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
138
LIST OF EQUITY INVESTMENTS IN SUBSIDIARIES
13
Company name
Registered offices
Share capital at 31
December 2022
Shareholders
% of
ownership
Shareholders’ equity
at 31 December 2022
2022 profit (loss)
Faringosi Hinges s.r.l.
Ospitaletto (BS)
EUR 90,000
Sabaf S.p.A.
100%
EUR 9,850,116
EUR 1,351,208
Sabaf do Brasil Ltda
Jundiaì (Brazil)
BRL 53,348,061
Sabaf S.p.A.
100%
BRL 99,469,722
BRL 300,837
Sabaf US Corp.
Plainfield (USA)
USD 200,000
Sabaf S.p.A.
100%
USD 151,957
USD -27,413
Sabaf Appliance Components
(Kunshan) Co., Ltd.
Kunshan (China)
CNY 69,951,149
Sabaf S.p.A.
100%
CNY -11,561,705
CNY -5,802,098
Sabaf Beyaz Esya Parcalari
Sanayi Ve Ticaret Limited
Sirteki
Manisa (Turkey)
TRY 340,000,000
Sabaf S.p.A.
100%
TRY 717,338,843
TRY -48,720,949
A.R.C. s.r.l.
Campodarsego (PD)
EUR 45,000
Sabaf S.p.A.
100%
EUR 8,714,300
EUR 1,049,144
Okida Elektronik Sanayi ve
Tickaret A.S
Manisa (Turkey)
TRY 5,000,000
Sabaf S.p.A.
Sabaf Beyaz Esya
Parcalari Sanayi Ve
Ticaret Limited Sirteki
30%
70%
TRY 342,298,381
TRY 122,646,519
Sabaf Mexico Appliance
Components
San Louis Potosì
(Mexico)
PESOS 141,003,832
Sabaf S.p.A.
100%
PESOS 130,209,351
PESOS -7,283,441
C.M.I s.r.l.
Valsamoggia (BO)
€1,000,000
Sabaf S.p.A.
100%
EUR 19,357,996
EUR 3,828,124
C.G.D. s.r.l.
Valsamoggia (BO)
EUR 26,000
C.M.I. s.r.l.
100%
EUR 1,236,930
EUR 186,785
Sabaf India Private Limited
Bangalore (India)
INR 224,692,120
Sabaf S.p.A.
100%
INR 235,558,330*
INR 6,404,977*
P.G.A. s.r.l.
Fabriano (AN)
EUR 100,000
Sabaf S.p.A.
100%
EUR 3,681,351
EUR 799,172
PGA2.0 s.r.l.
Fabriano (AN)
EUR 10,000
P.G.A. s.r.l.
100%
EUR 109,674
EUR 410,195
‘* The values shown for Sabaf India Private Limited refer to 31 March 2022, the local reporting date
OTHER SIGNIFICANT EQUITY INVESTMENTS
None
13
Values taken from the separate financial statements of subsidiaries, prepared in accordance with locally applicable accounting standards
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
140
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
76,901
A, B, C
76,901
0
Revaluation reserve, Italian Law
Decree 104/20
4,873
A, B
4,873
4,727
Valuation reserve:
Post-employment benefit actuarial
provision
(397)
0
0
Reserve for stock grant plan
1,939
0
0
Hedge accounting reserve
(14)
0
0
Total
97,245
93,410
6,361
Key:
A. for share capital increase
B. to hedge losses
C. for distribution to shareholders
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
141
STATEMENT OF REVALUATIONS
OF EQUITY ASSETS AT 31 December 2022
Gross value
Cumulative
depreciation
Net value
Non-current assets
held for sale
Law 72/1983
137
(137)
0
1989 merger
516
(516)
0
Law 413/1991
17
(16)
1
1994 merger
1,320
(1,108)
212
Law 342/2000
2,870
(2,798)
72
4,860
(4,575)
285
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
(20,106)
285
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 Car pini, 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
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
142
Appendix
Information as required by Article 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 2022 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 2022
financial year
Audit
EY S.p.A.
41
Certification services
EY S.p.A
---
Other audit services
EY S.p.A
35(1)
Total
75
(1) auditing procedures agreement relating to interim management reports.
Sabaf Group | Sabaf S.p.A. Financial Statements at 31 December 2022
143
Certification of Separate financial statements pursuant to Article 154-bis of Italian
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 Article 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 2022 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 Article 9 of Italian 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, 21 March 2023
Chief Executive Officer
Pietro Iotti
The Financial Reporting Officer
Gianluca Beschi