SUSTAINABILITY REPORT 2023

Complete

Letter to the stakeholders

As you will read in the Report, our environmental performance remained at good consolidated levels despite the macroeconomic and geopolitical difficulties experienced in the 2023 scenario. I am particularly pleased to mention the implementation of energy from renewable sources, investments in decarbonisation and the reduction of product-related emissions.

This year too, I am happy to give you my warm welcome in these initial pages of the second Sustainability Report of the Novellini Group. Leafing through this Report is like taking a journey, a company tour through our values, of which sustainability is now so deeply rooted to make it impossible to talk about our production organisation, our know-how, our products, without at the same time talking about People, the Environment, Innovation as the key factors characterising our organisation. The Sustainability Report is a transparent reflection of our company in that it offers a dynamic, all-round view of our organisation.

In 2023, we embarked on a major review and update of our sustainability strategy on which we are relying to remain at the forefront, from an ethic and competitive standpoint. We know that sustainability and competitiveness go hand in hand and feed off each other. We have reflected on material topics that are driving us on our current and future path. We have renewed our conviction that the environment, human resources, health, safety and territories are key aspects for us. On the other hand, we have shared with our stakeholders, who are increasingly significant for us, digitisation, the value chain, governance and many other topics that are explained in the following pages.

Working to reduce our footprint is not merely a statement for us: we prove it with facts and substantial data. We have measured and will continue to carefully measure the impacts of our products through Life Cycle Assessment studies in order to bring about improvement exactly where it is needed. As you will read, digitalisation, which we put at the service of sustainability in a large number of projects, is increasingly supporting us in this effort and in our daily actions.

This Sustainability Report is about People who share a common vision of Health and Safety intended as non-negotiable values, exactly like respect, nondiscrimination and valuing of individual peculiarities. Last but not least, the Report describes who we are, who our employees are and how they daily help build the Group’s success through hard work and passion. So, as I do every year, I would like to thank them.

The company staff include over 748 people. Every year, we offer new specialised training, give value to and update our employees’ know-how, offer young people positions where they can grow, and take care of professional development at every stage of their careers. We are aware that our attractiveness to young people and our ability to retain talent heavily relies on how serious and credible our actions are. These young men and women are the people we wish to build the Group’s future with.

Although the world is our Group’s horizon, we proudly keep sound roots in the territories where our companies “dwell”. I am excited to have learnt and now share with you the different initiatives we took in 2023 in favour of the local communities. Support to local schools, participation in cultural events and support to people going through health-related hardships are intrinsic peculiarities to our own essence. I would like to conclude this letter with a concept that is so dear to us: sustainability is far more than a strategic and corporate choice; it is a cultural choice; it is about individuals taking their own responsibility.

We should increasingly feel part of a common project and recognise that we have the ability to do things and to do them well. This is the personal commitment I am hereby renewing with the Novellini People and all those who share our journey towards sustainability.

Barbara Novellini - President

Marco Novellini - CEO

Origins and Business Model 01

The history and journey of the Novellini Group

The Novellini Group traces its origins back to 1966, when Gianfranco Novellini founded a small artisan business specialising in the processing of wrought iron and aluminium in the historical centre of Mantua. In over fifty years of business, we have managed to emerge on the national and international scene in the sanitary ware and bathroom furnishing sector, for both residential and hotel applications. With a team of over 700 people and nine production facilities, we operate in about 50 countries worldwide, serving a total of about 9,000 customers.

We are market leader in showers, which account for 68% of our revenues, followed by bathtubs (11%), shower enclosures (7%) and trays (4%). The remaining part of the turnover comes from accessories, mini-pools, pedestals and furniture. Our headquarters and production factory are located in Romanore di Borgo Virgilio (Mantua) over an area of 250,000 square metres. Italy is our largest market and amounts to 38% of revenues, followed by France (29%) and Benelux (17%).

We manufacture each of our products in compliance with the latest European regulations concerning quality, safety and environmental sustainability. We implement environmentally friendly production processes, we use chemicals consciously and have a special focus on energy saving, which helps us meet the challenges of an ever-changing world. Every stage in the creation of a Novellini product, from raw materials to the finished product, is the result of careful design, analysis and industrial planning.

Our production process is characterised by integration, automation and organisation.

All the production stages, from the processing of raw materials to the assembly of components, take place entirely in our European factories. Each stage is meticulously planned and tested to ensure compliance of our results with the high standards required at international level.

Company history

1966

Novellini is founded as a small artisan business specialising in the processing of wrought iron and aluminium for the production of doors and windows.

1967

Novellini launches “Mary”, the first retractable insect screen in history.

1974

The production of shower enclosures helps the Company expand its business and become successful on the European market.

1980

The first glass hardening machine is designed.

1988

Novellini introduces new wellness items and expands its product range with multifunctional enclosures and whirlpools.

1995

Reorganisation processes are started to achieve fully integrated production, as a result of which the raw material processing departments are largely expanded.

2000

Novellini Store goes online. The store is the portal for professionals where products and spare parts can be checked and ordered in real time.

2011

Novellini development office and style and design centre start the “In Art” project to create customised products made of moulded glass.

2014

IOTTI furniture, a bathroom furniture manufacturer, is taken over.

2018

A new showroom is opened at the headquarters in Mantua.

2019

NovALmec is taken over, as a result of a joint venture between Novellini Industries and Metal Exchange Corporation.

2020

A new range is launched: the Outdoor Spa.

2023

Novellini’s shower enclosure range obtains the Environmental Product Declaration, and the first Sustainability Report is published.

Corporate Profile

Novellini has grown into a Group of companies that can successfully cope with the organisational needs required to compete on the different markets at both European and international level. The Italian Group consists of Novellini S.p.A, Novellini Industries S.r.l. and NovALmec S.r.l., the latter being the result of a joint venture between Novellini Industries and Metal Exchange Corporation (MEC) that was launched in spring 2019 and is 51% owned. In 2023, the Group was also joined by Novellini Iberica s.l.u. The structure of the entire Novellini Group currently includes the following companies:

FN di Novellini Barbara e Marco & C S.a.s. Mantua (IT)

Novellini S.p.A. Mantua (IT) 100%

Novellini Industries S.r.l. Mantua (IT) 100% novALmec Mantua (IT) 51%

Novellini Iberica s.l.u. Barcelona (ES) 100%

Novellini Benelux B.V Almere (NL), Wavre (BE) 100%

Novellini France S.a.r.l Paris (FR), Vineull (FR) 95%

Novellini Sp.zo.o Poznan (PL) 93,7%

Novellini G.m.b.H Wörgl (AT) 89%

Novellini UK Ltd St Albans (UK) 77,1%

Novellini Finance S.A Luxembourg (LU) 99,99%

Values, Mission, Vision

Our values are based on passion for excellence and they encompass a deep love for beauty, well-done work and ethics, which in turn implies commitment to long-term value creation through sustainable practices, transparency and valuing people. The human being and quality of life are at the core of our decisions, and we are always driven by passion in whatever we do. Our production philosophy is based on understanding the real needs of our customers, the aim being to offer them the best experience possible under all aspects.

Our Code of Ethics illustrates in detail the values that drive our actions towards human resources, customers, suppliers and all other stakeholders with whom we collaborate.

Meritocracy, competition and diligence are the foundations of our work. We believe that valuing human resources and respect of fundamental rights are also key principles for our suppliers. We are committed to respecting the personality and dignity of each and every individual, encouraging our employees to express their innovative spirit.

When interacting with external stakeholders, we establish relationships that are based on fairness, loyalty, good faith and transparency. Our goal is to fully meet the expectations of the end customer. To achieve this goal, we are focused on building long-lasting partnerships with our suppliers that are based on the fulfilment of our mutual commitments.

Our enthusiasm, teamwork and values are the drivers to improve the quality of life of all those people around the world who are looking for excellence in their homes and families. For this purpose, we use the best technologies intensified by passion and intellectual involvement originating from our quest for beauty in whatever we do.

Our aim? First, to be the benchmark of excellence and culture in bathroom furnishing, the most innovative company offering the best products and services.

Secondly, as a result of the above, to grow and become the worldwide leader in high-end products, creating value for the resources involved in our business and for the region.

Mission Vision

Membership

Collaboration helps share knowledge, resources and skills, as well as promoting a sustainable approach to global challenges.

As we are aware of this and with a view to establishing virtuous and collaborative relationships, we are active players in some important organisations:

This association intends to enhance the entrepreneurial culture and to contribute to the development of civil society. Its mission is to protect and promote member companies with institutions, public administrations, as well as economic, political, and social organisations, and the trade unions. The President of the Group, Barbara Novellini, was awarded the delegation of Human Capital and Education in April 2023.

This organisation represents all the components making up the supply chain of the Italian woodfurniture sector (cork, furniture and furnishing industries), from raw material to finished product.

This organisation represents the Italian producers and processors of non-ferrous metals, aluminium, lead, copper, zinc, nickel, tin, magnesium, precious metals, and minor metals.

Confederazione Generale Italiana delle Imprese, delle Attività Professionali e del Lavoro Autonomo is the largest representation of Italian businesses, gathering over 700,000 enterprises.

Governance 02

The governance system

The term “corporate governance” refers to the way in which an organisation is managed and controlled, and it includes a set of principles, mechanisms, rules and relationships that govern its operations. The corporate and decision-making structure is organised in such a way as to ensure optimal performance of operational and management activities within the Group.

Novellini S.p.A, the industrial parent company, is wholly owned by the Novellini family through the holding F.N. di Novellini Barbara e Marco & c. S.n.c.

Novellini S.p.A. has adopted the so-called traditional administration system, which includes a Board of Directors and a Board of Statutory Auditors.

The Board of Directors of Novellini S.p.A. consists of the members of the Novellini family: F.N. di Novellini Barbara e Marco & c. S.n.c. (Chair), Barbara Novellini (appointed as Representative of the Managing Company), Marco Novellini (Managing Director) and Leonardo Pagni (Independent Director). Functional responsibilities that are significant for the success of the company are filled by a management team with extensive and consolidated experience, who have acquired specialised expertise in-house.

Board of Statutory Auditors

The members of the Board of Statutory Auditors appointed by the Shareholders’ Meeting held on 29/06/2022, who will remain in office until the date of the Shareholders’ Meeting for the approval of the financial statements as at 31 December 2024, include:

Michele Ghiringhelli (Chairman)

Fabio Ambrosiani (Standing auditor)

Alessia Vinci (Standing auditor)

Roberto Scibetta (Alternate auditor)

Sabrina Iannuzzi (Sindaco supplente)

Board of Directors

The members of the Board of Directors appointed by the Shareholders’ Meetings held on 29/06/2022 and 01/02/2024, who will remain in office until the date of the Shareholders’ Meeting for the approval of the financial statements as at 31 December 2024, include:

FN di Novellini Barbara e Marco & C. S.n.c (Chair);

Barbara Novellini (appointed as Representative of the Managing Company); Marco Novellini (Managing Director); Leonardo Pagni (Independent Director).

Supervisory Board MOG 231

Salvatore Castelli (Chairman)

Valeria Bortolotti (External Member)

Luca Tremea (Internal Member)

Auditing Company

The auditing company appointed for the three-year period between 2022 and 2024 is DELOITTE & TOUCHE S.p.A.

Industrial Plan Monitoring Committee

Barbara Novellini

Marco Novellini

Leonardo Pagni

Fabrizio Lorenzini

Organisational chart

BoD Mantua (IT)

Chairman

B. Novellini

Managing Director M. Novellini

Employees - Italy 2023

Employees - Group 2023

Human Resources

A. Sogliani

AFC

F. Lorenzini

Purchasing Department

G. Carra

Information Technology

A. Zentilini

Purchasing Department

A. Regattieri

Marketing

M. Giovanelli

Sales Dept. Italy

P. G. Bonesi

R&D - Engineering Dept.

R. Onori

Marketing analytics

D.Parenti

Web

J.Boni

Foreign sales

A.i. Marco Novellini

Raw material purchasing dept.

M. Pischiutta

Customer care

P. Santi

HSE & Environment

S. Affini

Administration

a.i. F. Lorenzini

Finance Area

L. Martini

Management Control

F. Ferrarini

Group maintenance dept.

F. Viotti

Quality control

a.i. R. Onori

BU Aluminium

M. Mastaglia

BU Shower Enclosures, Glass and Logistics

A. Regattieri

BU Wellness, Plastic materials

F. Bombarda

BU Furniture and Accessories

G. Longordo

BU Green Coat

F. Corato

Commercial organization chart

Marco Novellini

Marchio Novellini Mobilieri

Marchio Novellini Home Oasis - Gardening

Dino Cerolini

Marchio Novellini

Hydro-thermo-sanitary

Austria

Hannes Eder

Germany

Tilmann Specht

Poland

Radoslaw Janas

Rep. Ceca e Slovacchia

Pavel Prokes

United Kingdom

Simon Smith

Italy

Pier Giorgio Bonesi

France

Michael Perrier

Benelux

Sonja Splint

Spain-Portugal

Tony Reyes

Responsibilities for all countries with coordination by the National Directorate.

DIY World

Key Account Manager

Uber Pasquali

Export Manager Area 1

Gianluca Scavuzzo

Export Manager Area 2

Daniele Righi

Export Manager Area 3

Claudia Maria De Baptistis

Governance support tools

Having effective governance tools is essential for the Novellini Group to ensure corporate integrity.

The corporate governance system implemented is inspired by the highest standards of transparency and fairness, which guarantee reliability and accountability of processes to both internal and external stakeholders.

The approach taken specifically addresses environmental and social topics, as well as including ethical and regulatory compliance issues.

In this regard, Novellini is committed to adopting the organisational model required by Italian Legislative Decree no. 231/01, by virtue of which it has put in place a Corporate Code of Ethics, which incorporates the principles and values internal and external stakeholders must draw inspiration from and comply with.

With a view to ensuring, as far as possible, that the offences contemplated in the Decree are not committed, Top Management implemented an Organisation, Management and Control Model in December 2014, which was last updated on 12 September 2022.

The Model includes a whistleblowing procedure, for the purpose of which ad hoc communication channels for reports have been set up. A specific Supervisory Board has been appointed to oversee the functioning of the Model, compliance with it and its update when organisational changes occur in the Group or in the reference legislation. The compliance system applies to all the Italian companies of the Group, and foreign companies are required to adopt protocols and procedures in line with the principles of the Model and in accordance with the relevant legislation in force in their respective countries.

Established in 2014 at the time of restructuring, pursuant to Article 67, the Group decided to keep it after its return to profitability

Committee without formal status appointed to continuously analyse the trends of the main economic and financial performance parameters and to implement any corrective actions

We are aware that our ability to be sustainable in the long run is deeply linked to strict and responsible economic and financial management. The aspiration to maximise economic performances, which affect the market confidence in our Group, is a goal we and our stakeholders alike share.

In order to constantly monitor our economic performances, we adopt a centralised approach that facilitates continuous information flowing between the Board of Directors and the CFO. This approach enables us to be reactive and make timely decisions to address any criticality. Each year, we draw up a budget that helps us forecast the impacts of the actions planned by the various company departments and check their consistency.

Finally, the Administrative Body defines specific procedures for the approval of investments, with a view to ensuring the financial sustainability of our Group. Top management are regularly updated on financial planning and potential currency fluctuations in order to be able to adopt appropriate hedging strategies against currency risks.

Performance and economic results

As a result of market dynamics, 2023 turned out to be a more difficult year than expected for the Novellini Group. Persisting social and political uncertainties, the severe energy crisis, the measures taken by the European Central Bank to raise the interest rates, and the significant reduction of incentives for restructuring negatively affected our sales.

The core business turnover was affected by these factors to the extent that a decrease of over 15 million Euro was recorded, which equals a decline of 11%, in line with sector trends. This contraction had an impact on almost all the markets in which we operate. Considering the different sectors, wellness products suffered the most from exogenous market factors, while the OUTDOOR SPA range continued to grow and gain appreciation. Shower enclosures, on the other hand, remained substantially flat.

The aluminium business also suffered for the same reasons mentioned above and recorded a major slowdown in both volume and value, dropping 44% in volume and 55% in value. In all application sectors, the consumption of aluminium extruded profiles and billets suffered heavy reductions, with a near-zero consumption in Q4 2023.

In 2023, the market of aluminium and metals suffered a significant shrinkage due to a marked decrease in premiums. At the beginning of the year, they ranged between $600 and $700/ton, but eventually fell to a minimum of $295/ton in the last quarter. This downturn resulted in smelters not having the capability of covering their production costs and Italian and European foundries being forced to suspend operations, particularly in the last part of the year. NovALmec, the Group owned foundry, also had to take similar measures.

In this complicated market scenario, the Group implemented various strategies to contain the negative effects on sales. As a result, the gross contribution margin improved from 50.1% in 2022 to 55.4% in 2023. Additionally, the reduction in the operating costs of the facility succeeded, albeit partially, in mitigating the negative impact on EBITDA, which amounted to 8.9 million Euro.

Despite the economic difficulties, the Group managed to contain the increase in the net financial position to 5 million Euro, from 59 million Euro as of 31 December 2022 to 64 million Euro as of 31 December 2023.

GRI 201-1 Economic performance (values in €/1000)

Composition of economic value distributed

Payments to P.A.

Operating Costs

Payments to capital providers

Remuneration of personnel

Sustainability policies and commitments

Our sustainability-oriented approach is driven by the awareness that, in our role as players in a global context characterised by complex socioenvironmental challenges, it is essential to proactively manage ESG impacts, both from a strategic perspective to reduce risks and amplify opportunities related to our operations and business relationships, and from the standpoint of responsibility towards all stakeholders. Based on the above, we decided to take a structured approach to sustainability and initiated a systemic management process of all ESG topics identified as relevant to our business. Our desire is to continue to be a reference in the bathroom furniture industry for all those who seek sustainable and quality products, and we intend to pursue this by using stateof-the-art technology and caring for our employees.

As proof of our commitment to continuous improvement and customer satisfaction, back in 2022 we obtained Quality Management System Certification UNI EN ISO 9001:2015.

The aim was to optimise our organisational processes and to improve product quality while minimising waste and errors, and at the same time increasing our productivity.

Starting in 2023, we have embarked on the EcoVadis certification journey, a rating system that certifies compliance with strict sustainability criteria. The rating process analyses and evaluates the Company* on environmental, ethical, social and sustainable sourcing topics.

This commitment was the base to achieve a score of 70/100 and be awarded the Silver medal, an acknowledgement given exclusively to companies that rank in the 15% most virtuous businesses in their relevant industry.

The EcoVadis assessment boundary includes the Italian offices of the Group: Novellini S.p.A., Novellini Industries S.r.l., and NovALmec S.r.l.

Rating Ecovadis 70/100

We have always valued our identity as a large family business in our relations with our customers, employees and suppliers, and have established sound, balanced, durable relationships based on the recognition of respect for the individual as one of the fundamental values of the Group.

Our choice contributes to making our daily commitment a guarantee to all our customers, coworkers and suppliers that what we promise is fulfilled with the reliability, seriousness and passion that have characterised our business philosophy since the very first day.

Double Materiality Assessment 03

Double Materiality Assessment

Stakeholder involvement

Double materiality assessment follows the guidelines provided by the new European ESRS standards (in particular ESRS 1 and 2), which have introduced a new assessment method that companies follow to define impacts at external level, as well as internal level through financial materiality, which is then translated in terms of risks and opportunities. This methodology refers to the approach defined by GRI 3: Material topics, which references the requirements of the Global Reporting Initiative standards for sustainability reporting. The Global Reporting Initiative (GRI) is an international body established to define standards for reporting on organisations’ sustainable performance, and the GRI Standards are its application framework. The GRI standards consist of three series: Universal standards, Sector standards and Topic standards.

Following the guidelines concerning the process to identify material topics as described in GRI 3, it was possible to define a series of both positive and negative impacts that the Group has or is likely to have on the economy, the environment and people, including on their human rights, which in turn can indicate their (either negative or positive) contribution to sustainable development.

The significance of these impacts has helped identify a number of topics that were found to be significant and will be reported on.

The purpose of the assessment is to examine the potential and actual impact of the company, both positive and negative, on dimensions such as the environment, society and governance by involving and engaging with stakeholders. This engagement process has involved both internal stakeholders in the Novellini Group and external stakeholders that are significant for the company business on sustainability topics. The main internal and external stakeholders involved in the process have been: employees, customers, suppliers, banks and insurance companies.

The engagement methods have included a mix of interviews, surveys and technical meetings. Management have been interviewed to investigate the main elements of the management activity. This has helped identify the impacts on various categories of sustainability topics and outline significant projects and initiatives.

The double materiality matrix represents the significant topics that the Novellini Group and its stakeholders have identified at the end of a comprehensive assessment aimed at identifying both positive and negative impacts based on their sector. Double materiality is hence determined with reference to sustainability impacts and financial risks and opportunities. The assessment and consultation of ESG topics are defined on the basis of a list of topics that are appropriate to the operations of the Group and ensure all sustainability aspects are covered. The graph below is the outcome of a significance analysis of the most impactful material topics identified. The ends of the graph show the relevance or significance of the topic for each impact, be it positive or negative, that the Group may generate externally, and for each financial risk that the Group may suffer and opportunity it may be offered.

Double Materiality Matrix

The graph below is the outcome of a process to assess the significance of the material topics that have been identified as being the most impactful topics for both the Group and its stakeholders, by virtue of which they are eligible for reporting. The ends of the graph show the relevance or significance of the topic for each impact, be it positive or negative, that the Group may generate externally, and for each financial risk that the Group may suffer and opportunity it may be offered. Significance is defined as high, medium or low.

The following table shows the relationship between impacts and significant topics.

Comprehensive double materiality matrix

Double materiality focus

••• + Development of collaborations with start-ups and employee training;

Innovation and Digital Transformation

Opportunities to tap into the innovation potential of employees through dedicated programs and dialogue

••• - Lack of an open, widespread, and interconnected innovation system to create shared value; Human Capital Enhancement

••• +

Job rotation, training, and integration of resources with skills not currently present in the company, enhancing professional integrity;

Mapping roles and profiles, identifying the most valuable resources, and defining retention plans

Marketing and Communication

•••Lack of integration between human resources management systems and social sustainability (e.g., performance evaluation); Cybersecurity

••• + Truthfulness and quality of information;

••• - Deception and false information such as greenwashing;

••• + Protection of sensitive data;

Energy and Greenhouse Gases

Customer loyalty and new sales opportunities

Operational Continuity, Resilience, and Crisis Response

Intellectual Property Protection against cyberattacks

••• - Diffusione di dati sensibili (di clienti, partner, dipendenti ecc.) Privacy

••• + Dissemination of sensitive data (from clients, partners, employees, etc.);

••• - Acceleration of the transition to renewable energy and greater energy autonomy;

Local Communities

••• + Generation of greenhouse gas emissions that contribute to the intensification of climate change; Continuità operativa, resilienza e risposta alle crisi

••• - Continuous and adequate delivery of services to consumers;

•• + Involvement of shareholders or other stakeholders in the risks to which the company is exposed;

•• - Unfair competition by the company through paid information collection;

Proprietà intellettuale

•• + Protection of personal data from third parties through appropriate policies and practices; Privacy

•• - Potential significant cyberattacks, resulting in loss of trust, personal data, and financial resources from third parties;

••• + Stimulation of local economies and strengthening of community well-being;

•• + Exacerbation of the digital divide and social inequalities due to unequal access to technology.

Comunità locali

Energy transition plan, increasing the share of production from zero-emission renewable energy sources to enhance energy autonomy

Reduced competitiveness due to the decision not to invest in green energy

Proper business continuity management to continue delivering products and services after a critical event

Mitigating the impact of a critical event through a significant expenditure of time and money

Enhancement and protection of intellectual creations made by employees and safeguarding existing patents

Risk of disclosure of company secrets and counterfeiting

Strengthening physical and cybersecurity measures, developing partnerships to identify threats, adopting risk mitigation policies and solutions

Lack of appropriate tools for data security

Increase in brand reputation

Increase in costs related to local community involvement and stakeholder engagement

Significant topics for the Novellini Group and its stakeholders

Digitisation is considered a key element in optimising internal processes and ensuring a high quality standard for customers. Novellini understands the importance of state-of-the-art digital tools to promote efficiency, innovation and sustainability.

The aim of the Group is that 90% of sales are made through online stores and the after-sales service is enhanced on a continuous basis.

Achieved

AR: Implementation of an after-sales management system and a data warehouse for monitoring customer contacts.

ER: Uninterrupted dematerialisation of internal business processes; increased % of sales made through online stores. Optimisation of

As Novellini gives great importance to the professional growth and skill development of its employees, we have implemented a performance appraisal system that involves both new hires and staff with intermediate experience.

We are committed to discovering and supporting new talents, and we encourage the integration of young people into our team through university traineeships and internships in cooperation with schools.

Marketing and communication play a crucial role in the bathroom furniture industry: this is not merely about promoting products, but also building and maintaining a sound and positive reputation. An effective marketing strategy enables the Group to stand out in a competitive market, attract new customers and retain existing ones. Furthermore, clear and consistent communication with the public helps to pass on corporate values such as quality, innovation and environmental awareness, which are increasingly relevant to modern consumers.

AR: Participation in the Calamita project, conceived and coordinated by the Employers’ Federation of Mantua to promote forms of collaboration between schools and businesses.

ER: Greater offer of training courses for the development of our employees’ soft and hard skills.

AR: Assessment according to ESG EcoVadis Rating and receiving of the Silver medal, which testifies to Novellini’s position among the most virtuous companies in its industry, based on strict ethical, social, environmental and sustainable sourcing criteria.

ER: Publication of the second edition of the Sustainability Report.

GRI 418

The topic of computer security is one of the main risks for our business today. A firewall was introduced to protect our networks and more connectivity lines, effective antivirus and antispam were developed for all our devices. Access to the company system is via VPN and all our employees are required to update their network access passwords every 60 days.

In 2021, we introduced a multi-factor authentication system, better known as Multi-Factor Authentication (MFA).

AR: Installation of MFA system, firewall, antivirus and antispam.

ER: continuous improvement of security practices to reduce the likelihood of data breaches; training programmes for employees to increase awareness of cybersecurity risks and to reduce the number of attacks based on human error.

Our company is strongly committed to sustainability and environmental protection. We are aware of the importance of topics linked to energy and emissions, and are actively working towards a progressive increase in the use of green energy sources. Our goal is to reduce polluting emissions through innovative practices and cutting-edge technologies, thus contributing to a more sustainable future for all.

Our dedication to clean energy and environmental responsibility is at the core of our business strategies.

Economic and financial aspects to Novellini are interconnected with the well-being of our employees and customer satisfaction. The well-being of employees has a direct impact on the quality of their work and their productivity, and eventually results in increased turnover and positive customer feedback.

Intellectual property is a key value for differentiation and competitiveness in the market. The Group can protect its innovations and original creations in order for its unique products not to be copied by competitors. This helps safeguard investments in research and development, and also contributes to maintaining a strong and recognised brand image in the industry. In addition to the above, effective IP management attracts potential business partners and investors, thereby increasing opportunities for growth and expansion. On an ever-changing market such as the bathroom furniture market, giving value to our ideas and design is essential to keep up with the trends and to meet the consumer demands.

We at Novellini consider the development of positive relationships with the territory in which we operate to be fundamental. We seek to establish longlasting bonds with the community by way of creating value and nurturing continuous and open dialogue.

Our commitment to the territory takes place on two distinct levels: internal, through corporate welfare activities; external, through sponsorship and promotion of specific initiatives.

AR: Commissioning of our photovoltaic park for the production of green electricity.

ER: Reforestation project including the planting of 1400 new trees in the municipality of Borgo Virgilio (Mantua) to fight climate change and air pollution.

AR: A recovery in turnover growth is expected after a complicated period affected by exogenous market factors.

AR: Application of PVD treatment for the production of eco-efficient coatings.

ER: Development of new partnerships in order to achieve innovative high-performance solutions in the recycling of end-of-life compounds.

AR: Social initiatives such as EuGenio, Cirfood, participation in the Festivaletteratura ed. 2023, TEDx, and sponsorship of the Disanima Piano project.

ER: Reforestation project, new sponsorships and corporate welfare activities.

Sustainable Development Goals 04

Novellini Group for Sustainable Development Goals

Globally, the increasingly stringent challenges posed by the effects of climate change and the need to protect the physical and mental well-being of the population have increased awareness of social and environmental issues, and have strongly affected the decision-making processes of today’s businesses.

In 2015, the United Nations approved the Global Agenda for Sustainable Development and its 17 Goals (Sustainable Development Goals or SDGs), divided into 169 Targets to be achieved by 2030.

One of the goals of the 2030 Agenda is the need to invest on the principle of sustainable development, which is the cornerstone of the base economy of a pioneering country like ours. As a result, the Group has decided to invest and to commit to sustainable topics related to corporate social responsibility, the work culture and employee well-being. To date, we have started projects on 6 of the 17 goals promoted by the UN and have committed through specific actions aimed at creating a new shared value.

The Group promotes continuous workplace improvement with a view to enhancing the psychological and physical, social and economic health and well-being of the employees, as envisaged in Goal 3. It additionally promotes individual improvement by way of offering the employees training courses and cooperation programmes with local educational institutions, as envisaged in Goal 4.

Thanks to all the investments we made in innovation and environmental sustainability, the Novellini Group has proved its commitment to reducing energy consumption from non-renewable sources through the installation of a photovoltaic park and the purchase of green energy, thus contributing to fulfilling Goals 7 and 13.

The Group offers contractual guarantees and employment stability, fosters local employment and economic growth in the community, with a view to fulfilling Goal 8.

The Group focuses on innovation and research and development to ensure the highest quality and safety of its products for its customers. The production cycle is based on the use of clean energy, which contributes to a more sustainable and controlled production, as well as adhering to the requirements of Goal 9.

SDGs

Innovation and digital transformation

Optimisation of human capital

Marketing and communication

Cybersecurity

Energy and greenhouse gases

Business continuity, resilience and crisis response

Intellectual property

Privacy

Local communities

Novellini S.p.A., Novellini Industries S.r.l., and NovALmec S.r.l.

Products and services of the Novellini Group

Sustainable materials and products

The Novellini Group deems it essential to use materials and products that respect people and the environment.

The materials we use are our priority as we aim to manufacturing excellent and, what is more important, sustainable finished products. This is why we collaborate with the University of Padua to develop resins with a reduced percentage content of polluting solvents.

We also believe that the use of high-performance materials is crucial to have a positive impact on the environment and people. We predominantly use materials like aluminium, glass, plastic and packaging materials.

Aluminium

Our subsidiary company NovALmec produces billets of secondary aluminium, type EN AW 6060, which is a high quality aluminium-magnesium-silicon alloy manufactured with technology that can create a protective layer giving the material greater strength to corrosion.

After they are manufactured, a part of the aluminium billets is delivered to the subsidiary Novellini Industries where they are machined into profiles following a process that includes extrusion, cutting and painting. Novellini Industries only buys about 50% of the billets, as required to make its own products, so the remaining part is marketed.

All aluminium profile processing scraps generated in the production cycle are returned to the foundry for reuse, which generates a virtuous circular economy process.

Glass

Novellini purchases glass sheets mainly in Italy which are processed following four main steps before assembly: cutting, grinding, drilling and tempering. The glass is then decorated using water-based paints free of lead solvents which pollute the environment and are harmful to humans.

*Waterjet machining is a cutting technology by which a jet of very high pressure water is used to cut a variety of materials, glass included.

In the first process, computer-optimised glass cutting contributes to reducing the amount of sheet unused. With a view to minimising scraps, the amount of excess product is thoroughly monitored and the number of errors made during the processing stages is limited in order to avoid breakage or damage of any kind. The processing of glass involves large amounts of water at all stages as the glass is ground and cut using a Waterjet12* machine. The incorporation of a filtration system including spillover tanks has allowed 95% of the water to be recovered and put back into the production cycle, thus reducing our water consumption by 86% from 2017 to 2020.

Plastic

Novellini uses plastic material for cover caps, end caps, handles and tubs. After the purchase of basic raw materials such as nylon or ABS, these materials are processed and partly chrome-plated using our green PVD technology.

Plastic is mainly used to manufacture tubs: plastic materials there are part of the composite acrylic sheets that consist of layers of virgin material and layers of recycled material. The tub sector has a significant environmental impact, as it physiologically generates 15% waste as a result of the thermoforming process which requires a larger perimeter of material than the size of the object being cut.

Types of plastic material

Pure plastic material: any sheet consisting of acrylic and ABS, which does not contain any pollutants and can therefore be recycled, both in-house (for injection moulding or for making other sheets) and externally (putting it back on the market and selling it to third parties).

Composite plastic material: any material consisting of acrylic, ABS, glass fibre and polyester resin plus glass fibre and polyester resin, usually used for whirlpools; in the latter case, the material is polluting (as it consists of plastic, glass fibre and thermosetting material) and impossible to recover, and it is therefore delivered to waste collection centres. With regard to this composite material, we have been spending years looking for solutions that will enable us to put the material back on the market to support a circular approach. We still have an ongoing study and we are waiting to see if its outcomes can actually bring about viable solutions.

Packaging materials

Our products are packaged in cardboard boxes, wrapped in a cardboard protection and coated with shrink film made of 90% recycled material. Particularly fragile products are packaged in polystyrene for enhanced protection. Iron supports are used to deliver our products to the customer, the recovery of which is complex once they are at destination. We are now introducing wooden pallets on a massive scale, considering the rising cost of iron, the customer demands and how easy they are to regenerate, dispose of and reuse.

Product quality, safety and sustainability

We consider it essential to enhance and develop the quality and safety of our products. We are committed to ensuring compliance with the industry standards, the applicable regulations and the best practices, always keeping an eye on environmental protection and the safety of our employees.

There is however more than just compliance with regulations at Novellini. We are striving to constant improvement in the quality of our processes and products, through an innovative approach and the setting of specific targets, working in synergy as a team.

With regard to product safety checks, in accordance with current regulations, a distinction should be made between the two categories below.

Non-electrical products

The main product categories manufactured by Novellini are subjected to testing in our in-house laboratories to ensure proper functioning and compliance with quality and safety standards.

Electrical products

Representative examples of this category are whirlpools, showers with saunas and swimming pools. Safety testing of these products is conducted by a third-party certification body who ascertain compliance with the applicable regulations for both the product and the production process, and authorise us to affix and use their quality marking.

Research and development for products with a low environmental impact

Research and innovation are key drivers for the Novellini Group to support the business and contribute to the development of innovative, sustainable and solutions having a low environmental impact.

Several research and development projects have been started, including the application of PVD treatment: this solution is used to metallise aluminium and plastic parts to produce extremely thin eco-efficient coatings with special physical and mechanical properties. This treatment is a green alternative to traditional galvanic processes as it does not use toxic or harmful substances.

The advantages of this technology include the elimination of heavy metals, such as chromium and its derivatives, considerable savings in water utilisation, and the reduction of harmful gaseous emissions, with remarkably positive effects on the environment and the health of workers. This advanced environmentally friendly metallisation technology is used, for example, for aluminium profiles, which thus become 100% recyclable.

Since 2008, Novellini has been the only European player in the sanitary ware and heating sector to use PVD technology in its production processes, which is still helping us to offer a wide range of standard colours and customised coatings to meet our customers’ demands.

In partnership with the Politecnico di Milano University and other European companies, we have also participated in FiberEUse, a project funded by the Horizon 2020 programme of the European Union that is intended to develop innovative solutions to improve the recycling performance of end-of-life composite materials. Materials such as glass-fibre reinforced polyester, for example, which were normally sent to landfills, are now reused as industrial components to reinforce our tubs.

Our partnership with the University of Padua is aimed at developing environmentally sustainable resins with a reduced percentage content of polluting solvents, with the goal of replacing the fibreglass currently used as reinforcement material for bathtubs and shower trays over time.

Fibreglass contains styrene, which is carcinogenic and harmful to humans and the environment.

Our intent with this collaboration is to make the end-of-life of the product as impact-free as possible.

Environmental certifications

The commitment of the Novellini Group to adopting sustainable solutions with a low environmental impact is proved by the EPD certification (Environmental Product Declaration) for the shower enclosure product category and the FDES certification (Fiche Déclaration Environnementale et Sanitaire) for the environmental and health performance of construction products.

The EPD is a voluntary certification that provides specific data on the environmental impact of the product according to international standards and on the basis of an entire life cycle assessment, starting from upstream phases such as the procurement of raw materials and their transport to the production site up to product disposal.

The FDES certification provides data on the environmental impact during the product life cycle, from raw material extraction to end-of-life, and may also include information on whether the product can be recycled and reused. Based on this approach, FDES promotes transparency and accountability in the construction industry, contributing to greater sustainability and a reduction in the environmental impact of buildings.

(Environmental Product Declaration)

Product environmental performance

Environmental and health performance of a construction product

(Finchè Déclaration Environmental en Sanitaire)

Innovation and digitisation Customer Service Information security

Digitalisation is perceived as a crucial source of internal improvement and quality assurance for customers. Novellini recognises the importance of the latest generation of digital applications in fostering efficiency, innovation and sustainability. A crucial distinction is to be made between internal and external process management, though. If on the one hand the former still needs improvement, for instance the dematerialisation of some business processes, external management, on the other, is more advanced and meets the needs of customers who have become increasingly more prone to digitisation and automation.

The computerisation process started in the early 2000s, when Novellini adopted a B2B business model with a fully digitalised platform for online sales. Today, the aim of the Group is to ensure that 90% of sales are made through its online store. In recent years, projects have been started to optimise flows and automate processes, including the implementation of a management system for after-sales operations and a data warehouse to monitor customer contacts.

Showroom visits, initially recorded manually, are now managed through a computerised system. Moreover, a Product Information Management system has been introduced that centralises and organises product information, thereby improving the customer experience by way of customising and filtering product information.

Currently, around 70% of our customers’ purchases are made directly via the Novellini Store, our online platform. Despite this, a significant part of our customers still prefer to place their orders via our Customer Service.

Customer Service is a service we provide to our customers and enables us to offer them support throughout all the order flow stages, from quotation to order, from order acknowledgement to product delivery, and on to after-sales support, where needed. To this end, we have several service centres in the territory through which we can offer our customers support in the handling of the order. Additionally, in order to further assist our customers and retailers, we have a dedicated technical support team within the sales structure, who coordinate technicians on the territory.

With this system, we develop timely monitoring of all the products that have returned to stock or have required technical support during the warranty term. This team also handle returned goods: the customer or retailer starts the return procedure via a ticket and, when we receive the defective product and ascertain its nonconformity, we issue a refund or offer a replacement part. At the end of this process, the non-conforming product is not directly delivered to a waste collection centre, but it is reintroduced into the production cycle in-house: its components are recovered or defective parts are fixed.

The topic of IT security is one of the main risks for our business today, which we have identified and monitor. We at Novellini consider the protection of both internal and customers’ data and information to be crucial, which is why we are constantly working on improving cybersecurity-related aspects.

In recent years, we have notably introduced firewalls to protect our networks, we have developed more connectivity lines, we have installed effective antivirus and antispam on all our devices, and we have implemented a central management system for company telephones with antivirus and anti-hacker controls.

We periodically conduct a security review of the IT infrastructures within the Group, we provide access to the company system via VPN, and we require all our employees to update the password they use for access to the company network every 60 days.

In addition, to prevent cyberattacks, in 2021 we introduced a multi-factor authentication system, commonly known as Multi-Factor Authentication (MFA). This system allows employees to access the internal network only after authorization is granted through a second device in their possession, by entering a numerical code.

Finally, with a view to continuous improvement, we have made some assessments to identify the level of cybersecurity in our company and the problems in our systems.

Social responsibility 06

The people of the Novellini Group

Our Group is made of people that share common values and passions The well-being and satisfaction of our human resources are distinctive elements of our identity and enable us to create a serene and stimulating workplace. A company’s responsibility is measured in its respect for people, which contributes to creating value for the company.

Within the Novellini Group, we promote direct relationships with all the employees, based on sincerity and mutual trust. Being part of the same team means enhancing individual talents and steering the company towards ambitious goals, through the active participation and involvement of each and everyone.

We are committed to discovering and supporting new talents, and we encourage the integration of young people into our team through university traineeships and internships in cooperation with schools. We believe that investing in new generations is a fundamental added value for our Group; the coexistence of people with mixed age and experience is a valuable resource to stimulate change and to drive innovation.

In recent years, we have been faced with challenges in finding qualified personnel who could meet the professional requirements needed at all company levels. To address this situation, we have recently introduced a new “Work with us” section on our website and decided to cooperate with companies specialising in personnel recruitment.

Our care in valuing the people who work with us is reflected in the low turnover rate recorded in recent years and the strong loyalty of our employees: many of them have accrued 35 to 38 years of experience within our Group.

Recently, we have implemented a performance appraisal system for our employees, which involves both new hires and staff with intermediate experience. At the end of the year, we organise meetings with Management to provide feedback on performance and identify potential areas for improvement.

Currently, 97% of the contracts signed with our employees are permanent, and 91% are full-time, which reflects the Group’s commitment to offering our employees economic security and stability.

3% 9%

Permanent employment contracts

Full-time contracts

97%

Permanent employment contracts

The assessment boundary includes the Italian offices of the Group: Novellini S.p.A., Novellini Industries S.r.l., and NovALmec S.r.l.

91% 2023 2023

Full-time contracts

Our efforts to find innovative strategies that promote the well-being and growth of our employees are significant. Setting clear objectives is key to ensure a productive and peaceful workplace, as well as to deal with unpredictable events and to encourage a proactive approach in finding creative solutions.

The main actions to support the well-being and development of our people include:

• Training courses;

• Motivational corporate events;

• Smart-working opportunities for office staff;

• Flexible and reduced working hours in relation to the employees’ personal needs;

• Occasions for managers and employees to meet in order to examine their satisfaction in the various company functions;

• Constant updates on specific topics via the company portal and social channels;

• Agreements with kindergartens offering reduced rates for employees;

• Company canteen;

• EuGENIO network.

We are convinced that these initiatives can enhance the wellbeing of Novellini employees and further foster motivation in our team.

In order to assess the effectiveness of our actions and to promote proactive communication within the Group, we periodically organise meetings between Management and the managers of the different areas. These meetings are aimed at analysing the different company functions and collecting feedback through internal surveys that focus on staff well-being. This is an opportunity for us to constantly improve, promptly address any problems, and make the most of our human resources.

Diversity, equal opportunities and non-discrimination

Promoting respect for diversity and ensuring equal opportunities for all are key to the Novellini Group. Every day, we are dedicated to protecting the personality and dignity of each individual, actively working to prevent discrimination, harassment and abuse of any kind whatsoever. We deeply value meritocracy, fairness and diligence in every aspect of our work, ensuring fair selection processes, fair career opportunities and equal pay.

These principles, which are formalised in our Code of Ethics, form the foundations of the social-ethical values that drive our actions. We are committed to ensuring compliance with these principles within our Group and by all stakeholders with whom we interact.

Although male employees are predominant in the sanitary ware and heating sector, as is the case in our companies NovALmec and Novellini Industries, we at Novellini S.p.A. can proudly state that female

representation is greater.

The Group stands out for its ethnic diversity and its being representative of multiculturalism, with employees coming from as many as 11 different ethnicities. We respect the traditions and cultural customs of our employees. For instance, we have dedicated prayer spaces and offer flexible hours during Ramadan for staff of Muslim faith.

We are also actively committed to complying with Italian Law 68/1999, following which we offer special care to workers from vulnerable groups and consider hiring people with disabilities for the available positions. Annually, we draft a report on equal opportunities to assess the effectiveness of the initiatives taken by our company in this area.

assessment boundary includes the Italian offices of the Group: Novellini S.p.A., Novellini Industries S.r.l., and NovALmec S.r.l.

Staff training and development

We at Novellini believe that training is a crucial aspect for developing the skills and knowledge of our employees, and it is essential for providing a high quality, always up-to-date service.

In our Novellini Academy, we deliver training courses that are aimed at the professional growth of our employees, our goal being the expansion and strengthening of both hard and soft skills, and the enhancement of the potential of each resource. We are also committed to identifying the training needs of our employees and trying to meet them as best as possible. An example of this is the language courses we offer that were specifically developed on the basis of the requests received from our staff.

We give great importance to empowerment in business management and are geared to continuously promoting the development of personal, technical and managerial skills. The integration of the knowledge, skills and attitudes of our employees at all levels is key to make sure that they are aligned with the business needs and, at the same time, their professional aspirations are met.

The Novellini Academy

We have developed a highly significant training plan in collaboration with Randstad that involves staff at various levels in the company. This initiative has given birth to the Novellini Academy, a learning organisation model that addresses various training topics and also involves members of Management as trainers.

The Novellini Academy is intended to deliver continuous training and refresher courses for both internal resources and external co-workers.

The Academy training programmes last about eight months and include external coaches specialising in specific topics, with meetings scheduled either monthly or bi-monthly. At the beginning of the year, we define the training targets and select the topics to be addressed with the support of Randstad. The Novellini Academy also organises a series of meetings and company visits, with the aim of training and informing our customers on the company and its products.

Respect for human rights and protection of workers’ health and safety

Proactive management of occupational health and safety has always been a fundamental pillar for Novellini. We are relentlessly committed to ensuring a safe and human right respectful workplace for our staff, adopting effective solutions to protect their health. The national and international context in which we operate requires us to be constantly committed to ensuring regulatory compliance and to continuously improving the working conditions of our employees.

In order for aspects related to the Health and Safety of workers to be managed appropriately, we have implemented a Management System within our Organisation, Management and Control Model, in accordance with Italian Legislative Decree D.Lgs. 231/2001. In line with the provisions of Italian Legislative Decree D.Lgs. 81/2008, we check that the Risk Assessment Documents (RAD) for all Group companies are regularly updated through on-site inspections, measurements and assessments.

Furthermore, we encourage all workers to report about any risk situations or safety issues, either in writing or verbally. Based on the nature and extent of the risks identified, we draw up an improvement plan to define measures that can enhance safety levels on a continuous basis. The process to monitor the effectiveness of the actions taken is supported by dedicated on-site inspections and audits, as well as indepth analysis of work-related injury statistics.

As shown in the graph below, 10 work-related injuries were recorded in 2023, marking a 33% reduction from 15 work-related injuries in the previous year.

Supporting local community development

Fostering positive relationships with the territory in which we operate is key to the Novellini Group.

Our aim is to build long-lasting bonds with the community, generating value and promoting open and continuous dialogue. As the most significant part of people who work in our Group come from the Mantua area, we believe that collaboration with the local communities should first and foremost focus on initiatives that go to the benefit of our employees. Below are some examples of these initiatives.

Internal company support

EuGenio: This is a network of companies in the Mantua area that receive assistance from the local and provincial authorities of Mantua to develop ideas and services intended to offer both economic and family support to their employees. As active members of the network, we are committed to evolving towards new forms of working flexibility. EuGenio is active in making practical and concrete benefits available for workers, including welfare vouchers, educational opportunities, learning and working projects, and agreements with different entities. Within the framework of the EuGenio network, we have provided our employees with discounts at partner shops and on summer camp fees, for example. Initiatives like this have an important impact on the local communities as they support local businesses, as well as offer our employees advantageous conditions.

Cirfood: In agreement with Cirfood, we have decided to collaborate with local producers from Mantua and the province for our company canteen: we buy our supplies from them in order to offer our staff locally grown quality fruit and vegetables. In so doing, we contribute to minimising pollution and waste, and to reducing the use of fuel, packaging materials and the related costs.

External support to the company

We at Novellini are convinced that continuous collaboration with the local community can pave the way to shared growth, which is why we are committed to valuing the area in which we operate as much as possible. We started partnerships with local high schools and universities a long time ago.

We collaborate with secondary schools within the framework of learning and working projects, which offers young people the opportunity to make their first professional experiences. On the other hand, we offer university students a series of curricular traineeships in administration, marketing and technicaloperational areas, which can convert into employment opportunities. During their time at Novellini, the students have the opportunity to understand the functioning of the offices to which they are allocated, to build professional relationships with colleagues, and to learn about the main activities characterising our industry.

We also offer schools, particularly scientific and technical high schools, the opportunity to participate in company visits.

Sponsorships are yet another key element of our commitment to the community.

Festivaletteratura Mantua: the festival of literature plays an important role in the area as it is one of the most important literary and cultural events on the international scene, attracting an increasing number of writers and tourists year to year. The partnership with Festivaletteratura also gives us the opportunity to offer all our employees dedicated discounts on the access tickets to the scheduled events.

a non-profit cultural association that organises music events and a music and comedy festival with well-known actors and singers from the Italian scene.

TEDx Mantua: a global stage where brilliant minds share revolutionary ideas.

Environmental responsibility 07

We at Novellini consider environmental protection to be essential and recognise the importance of taking actions that promote respect for and protection of the ecosystem. This is why we are committed to developing and implementing sustainable solutions, reducing our energy consumption and emissions, protecting water resources, and responsibly managing the waste generated by our operations.

Within the framework of the Organisational and Management Model 231, we have introduced specific internal control measures to ensure proper management of environmental aspects.

Renewable energy and energy efficiency

We are aware of the importance of implementing lowimpact energy solutions to maximise the efficiency of our production processes. Every four years, we conduct energy audits to measure the energy consumed by the Group’s operations, based on which we develop intervention plans and improvement strategies.

These audits help us identify areas we can work on to increase efficiency and to reduce our environmental impact, so that we can implement convenient and effective solutions. In 2022, for example, we completed the replacement of the lighting systems in all our production units, offices and outdoor spaces with LED systems. This significant replacement work reduced lighting-related energy consumption by 55% and helped us save about 980 MWh starting from 2021, which corresponds to the energy annually required by about 300 households.

Thanks to major maintenance works on our equipment, we were also able to reduce compressed air losses in the network by 20%, going from 90,000 to 75,000 L/min of air produced by the compressors. This intervention too resulted in substantial energy savings between 2021 and 2022.

As a result of these energy efficiency initiatives, total energy consumption progressively decreased to around 324,233 GJoules from 2021 to 2022.

Photovoltaic park

In our relentless effort to reduce the environmental impact of our operations, we have adhered to the goals outlined by the European Green New Deal, which is intended to promote investments and initiatives for the transition to a more sustainable economy. Thanks to a significant loan awarded by SACE8, in 2023 we built a photovoltaic plant with the purpose of making our factories more independent from an energy standpoint and ensuring production continuity for our customers.

Our photovoltaic park covers an area of 13,700 square metres, which equals about two football pitches, and has an installed capacity of 3,160 kWp. The park will generate a total energy of 4,000 MWh per year, 80% of which will be utilised in our industrial hub, while the remaining energy will be fed into the public grid.

This investment represents a significant contribution to the UN Sustainable Development Goal SDG 13Climate action.

Emissions

One of the priority goals for our Group is to significantly reduce emissions from our operations. The emission impact we record mainly comes from the operations of the NovALmec foundry and the resin coating processes of Novellini S.p.A., which are currently the main source of solvent leakage. We have therefore made a major investment in our Wellness Production Area, which is aimed at implementing an emission reduction system during the resin coating process. This system is designed to collect and treat any process air exhaust that may be contaminated by solvents, and to return purified air to the atmosphere, in compliance with regulatory limits. We also use ceramic packings that store thermal energy from the purified air coming from the combustion chamber and transfer it to the next stage in order to heat polluted air at the inlet. This helps cut down on natural gas utilisation and almost completely recover the energy required for the process.

With regard to the emissions generated by NovALmec, in 2021 we implemented a major change in the filtering system: we purchased two new filters for the foundry and for the grinding station, and modernised this equipment by incorporating more advanced control systems.

Since 2021, direct (Scope 1) and indirect (Scope 2) emissions have been declining on a continuous basis.

Water and effluents

Novellini manages the water resources used in its production processes in an efficient and responsible manner. The highest amount of water is consumed by the glassworks where water is used for the washing and processing of glass, as well as for the fill up of cooling systems and foundry equipment.

To minimise the impact of water consumption, we have put in place recycling and filtration systems which collect the water used during glass processing and help reuse it. Since 2017, 95% of water used in our plant is reintroduced into the production cycle. In addition to the above, innovative solutions, careful maintenance and continuous monitoring have enabled us to reduce water consumption by 80% and to fulfil the targets we had set out for.

In 2023, the total water extracted was 68,302 cubic metres, of which 75.46% came from wells and 25.54% from the aqueduct; the water discharged was 44,070. A reduction in the water extracted is observed if compared to 2022, when 87,073 cubic metres were extracted and 42,776 cubic metres discharged.

Waste management

As we recognise how important environmental protection is, we do our best to responsibly manage waste we produce and are committed to reducing its quantity, promoting reuse and optimising its management. With a view to circular economy, we purchase aluminium scraps to manufacture billets and deliver our waste to waste recovery plants whenever possible. Most of the waste we generate comes from glass processing, plastics, as well as painting, gluing and aluminium smelting processes.

Looking at the 2023 waste mix, a decrease is recorded in the amount of waste generated that equals 19.66% as regards hazardous waste and 33.90% as regards non-hazardous waste.

Waste generated include non-ferrous metals (32.8%), removed foams (18.2%), glass waste (10.6%), ferrous metals (8.6%), and aluminium (8.0%). Other waste categories, albeit in smaller percentages, include plastic and rubber (4.4%), fluff (2.4%), glass (2.3%), and plastic chips (2.2%). Packaging materials, such as paper and cardboard (1.7%), wood (1.4%), and mixed materials (1.2%), are less impactful.

The assessment boundary includes the Italian offices of the Group: Novellini S.p.A.,

Novellini and the supply chain

Waste management Selection of suppliers

Novellini greatly cares about its supply chain and actively strives to ensure transparency and quality throughout the entire production process. Building relationships founded on trust, collaboration, sharing and mutual support is crucial for us. To this end, we involve all our suppliers in a process for continuous improvement that is aimed at achieving and maintaining high performances over time. We have a deep bond to our values and principles, which is why we share our Code of Ethics, a document addressing the rights and duties of all our stakeholders, with new partners at the beginning of our collaboration.

As we manage a high number of orders daily, we are constantly making an effort to optimise every organisational, operational and management aspect throughout our supply chain. Interestingly enough, around 20% of our suppliers account for 80% of the volumes we purchase, with reference to materials such as aluminium for billets, glass, PMMA15 thermoformed sheets for whirlpool tub shells, cardboard for shower enclosure packaging, gaskets for aluminium and glass profiles, and resin to reinforce the back of tubs.

Most of the goods we procure come from Italian suppliers, with whom we collaborate to ensure that they comply with European environmental and social standards and regulations. As for suppliers outside the EU, we prefer to work with sound companies that have a proven positive reputation.

At organisational level, Novellini has a central office that manages procurement for the entire Group, excluding however the procurement of aluminium ingots, billets and scraps, which is managed directly by the Group CEO and a buyer from NovALmec. Management define the strategies together with the purchasing manager in order to have a comprehensive view of needs at Group level and to manage the supply chain effectively.

The sustainability of our products is based on reliable suppliers, good practices and the materials used. From the outset, we are committed to building strong relationships with our suppliers that are based on shared values and principles. Before entering into new contracts, we thoroughly examine all the players in the sector. We select suppliers who embody the values of seriousness, transparency and fairness, using two evaluation tools:

• A questionnaire, to collect documentation and background information for the sake of better understanding the supplier’s context and how to start a mutually beneficial collaboration. This questionnaire includes sections on regulatory compliance and the ethical principles contained in our Code of Ethics and in Model 231;

• The Creditsafe platform, to analyse and compare the suppliers’ economic-financial data, which we require to assess their soundness and to check that our relationship will also be sustainable in economic terms.

Appendix

Methodological Note

This edition of the 2023 Sustainability Report of the Novellini Group has been drawn up on a voluntary basis and contains information on economic, environmental and social topics that are deemed helpful to offer an understanding of the Group’s operations and performance, results and the impact generated.

This document is the second edition of the Sustainability Report of the Novellini Group that was drafted in accordance with the “Global Reporting Initiative Sustainability Reporting Standards”, based on the “with reference to the GRI Standards” option, and includes the GRI Content Index as an appendix.

The contents and indicators under this report have been defined starting from the results of the double materiality assessment conducted in 2024, in accordance with the new European Sustainability Reporting Standard (ESRS) which require the company to report on its significant topics from an external and one-directional perspective, as well as considering their financial significance for the Group, and to verify both positive and negative, actual and potential impacts.

Although the reporting boundary refers to the Group’s structure as set out in the previous chapters, an indication is given whenever the information provided is only referred to the Italian offices of the Group:

Novellini S.p.A., Novellini Industries S.r.l., and NovALmec S.r.l.

The document, which is drawn up annually, is intended to illustrate the sustainability strategies of the Group for the sake of demonstrating its sensitivity to topics that are not merely economic.

EXTERNAL ASSURANCE BY CERTIFICATION BODY

This edition of the 2023 Sustainability Report was not audited (“assurance”) by any third-party body. The Report is formally approved and signed by the Chair of the Board of Directors, as witnessed by the letter to the stakeholders at the beginning hereof.

With a view to continuous improvement, the Group is committed to providing increasingly accurate data for the relevant reporting period in future editions.

GRI CONTENT INDEX

The following table lists the indicators reported in the 2023 Sustainability Report of the Novellini Group. A reference to the relevant chapter in this Report is given under each GRI indicator.

GRI content index

STATEMENT OF USE

The Novellini Group has reported on information mentioned in this GRI content index for the period between 01.01.2023 and 31.12.2023, with reference to the GRI Standards.

2.3

2.4

Greenhouse Gas Emissions Indicators