ANNUAL REPORT 2022 - EN by SACMI

ENDLESS INNOVATION SINCE 1919

Integrated Annual Report 2022

ENDLESS INNOVATION SINCE 1919

SACMI

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Integrated Annual Report 2022

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Contents

Letter from the President

The SACMI Group

1.1 Tiles 1.2 Whiteware 1.3 Advanced Materials 1.4 Rigid Packaging 1.5 Beverage 1.6 Packaging & Chocolate 1.7 Logistic Engineering & Forwarding 1.8 Renewable Energy Management

Responsible governance and value creation

2.1 Governance and organization 2.2 Governing bodies 2.3 Business integrity and control systems

94 102

Innovation and research

106

37 45 57 69 79 85 89

3.1 SACMI Digital Innovation & Automation HUB 108 113 3.2 R&D and Innovation 118 3.3 Partnerships 122 3.4 Main ongoing funded projects

Wealth generated and distributed 4.1 Wealth generated and distributed by SACMI Imola SC 4.2 Approach to taxation

130

132 134

Suppliers

136

Social performance

144

6.1 Our people 6.2 Cooperative membership 6.3 Customers 6.4 Involvement in local communities

146

Environmental Performance

174

7.1 Management of environmental impact 7.2 Energy and emissions management

176

7.3 Management of in-atmosphere polluting emissions

164 166 170

177 185

7.4 Management of water resources 7.5 Circular economy

187

Methodological note

194

GRI Content Index

198

190

Integrated Annual Report 2022

Letter from the President

In 2022, the value of SACMI's consolidated order book was three times higher than pre-pandemic levels. Against a backdrop of strong market demand that lasted the whole year and in the wake of a fast-paced recovery that began in 2021, SACMI significantly increased volumes and market shares across all the sectors in which it operates. Today, SACMI is a more solid, stronger industrial Group: our customers’ response to a new approach centered on sustainability and digitalization has been highly promising. The economic result was the best in SACMI's history. However, numerous exogenous factors continued to impact markets in 2022. The Russia-Ukraine conflict, spiraling energy prices, supply chain issues and overloaded logistics systems – already under pressure in the wake of the pandemic – continued to obstruct smooth growth. Such factors have, naturally, affected our customers’ investment plans, albeit in different ways in different countries and industries. SACMI reacted to these challenges by focusing

on procurement and job order planning in order to lessen the impact on both project lead times and operational management. In 2022 all Businesses and corporate bodies contributed significantly to the overall result: they all demonstrated resilience, faced down challenges with integrity and strengthened SACMI's reputation and leadership across multiple industries. We invested in new skills, continuing to expand the SACMI workforce in Italy and around the world while bettering facilities and assistance services for our customers. Guided - as always - by a passion for technology and innovation, we look to 2023 with confidence and continue to concentrate on those factors - expertise, services and partnerships - that let us react quickly, effectively and proactively to today’s global challenges.

SACMI

Letter from the President

«Up to us».

Measuring sustainability

The inflationary spiral triggered during the post-Covid phase and later aggravated by the Russia-Ukraine conflict led to a scramble for fossil fuels, highlighting just how far we still have to go are to achieve total decarbonization of energy systems. However, this has not slowed investment in sustainable materials and processes: if anything, it has made such investment even more urgent, whether the focus be on reducing the environmental impact of consolidated processes (e.g. by reducing the use of raw materials, increasing the reuse and recycling of waste and water, limiting consumption) or identifying alternative technologies (such as new biocompatible packaging materials or clean fuels for ceramic drying and firing processes).

A key aspect of the drive towards decarbonization, launched in 2021, is SACMI's ability to ‘measure’ sustainability, with the latter seen as both external (i.e. the sustainability incorporated in the technologies and products provided by SACMI) and internal (i.e. the environmental, social and economic impact of manufacturing). The need to paint a broad yet clear picture of ‘SACMI sustainability’ has therefore required an expansion of the quality and quantity of the indicators to be measured.

Sustainability was the cornerstone of SACMI's work in 2022: not just in an ecological sense but also, and above all, as an enabling technology to make producers more competitive/reactive to market fluctuations than their rivals, letting them consciously design their future through the social, environmental and economic sustainability of production. Over the year, this strategy led to the start of the “Up to us” campaign. In 2022, technological endeavors led to the launch of solutions that won immediate acclaim. These were accompanied by clear communication goals: that is, the need to inform markets of all the advantages - both economic and reputational - that sustainability can offer when embedded in a wider logic of optimization and enhancement of environmental, social and governance (ESG) resources. A key outcome of this approach is that, by digitally interconnecting systems, it further raises the level of service provided to markets: it does so in terms of process efficiency, thus raising the quality of the products our customers make using SACMI technology.

In 2022, this led to the establishment of an internal Sustainability Board. Working alongside the various corporate governance bodies, the Board has allowed us to raise the bar by extending the boundary of this Integrated Annual Report to encompass 16 Italian Group companies. In 2022, analysis of internal trends within individual Businesses was extended to take into account the need to promptly and transparently report on all aspects that help embed the sustainability concept: a concept made real through the use of targeted enabling technologies or new and innovative ‘digital factory’ control and maintenance practices. What we seek to demonstrate - and convey in this report - is how continuous innovation and sustainability are actually two sides of the same coin. In some cases, both have been pivotal to achieving outstanding business results. In others, they have opened up equally important lines of R&D and advanced prototyping that will lay the foundations on which to build a sustainable future and achieve ambitious internationally agreed decarbonization goals.

Financial performance In 2022, consolidated revenues exceeded 1.8 billion euros, an increase of almost 18% compared to 2021. Operating margins remain satisfactory. The Group's financial and asset solidity remains exceptional. In 2022, global macroeconomic expectations

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Integrated Annual Report 2022

were buoyed by the receding pandemic and, vice-versa, checked by the shock of the Russian invasion of Ukraine. Geopolitical tensions triggered by the conflict have severely impacted the global economy, causing - to name just one effect - a sharp rise in prices, particularly in Europe. Higher production costs, a spike in interest rates, supply bottlenecks, erosion of confidence and fewer monetary and fiscal stimuli have dulled the optimism felt at the start of 2022 and frustrated global demand. With no end to the Russia-Ukraine war in sight and continued inflationary pressure (and the resulting monetary restrictions introduced by central banks), the emerging macroeconomic scenario in 2023 is one of deep uncertainty. Needless to say, this climate of unpredictability stifles international economic development and impacts industrial investment decisions. 6

Nevertheless, in 2022 the Group achieved robust economic, financial and equity performance. All its divisional revenues have increased, driven by a strong inflow of orders. A sharp focus on customer satisfaction led to substantial operating results. The year ended with achievement of the NFP target (+109 million euros) and a small but appreciable net cash result of almost 12 million euros, the result of meticulous control of Net Working Capital. The challenge of achieving just the right balance between production certainty and warehousing efficiency was complicated by persistent supply issues and overloaded global logistics system. Painstaking operational planning of orders allowed us to seize the opportunities offered by higher demand. This led to increased market shares in all our business areas and meant we able to achieve a good overall balance of economic and financial results. At the end of the year, Net Equity stood at 772 million euros. The Group continues to enjoy a solid financial debt structure, oriented towards the medium-long term and characterized by fixed interest rates. The strategic importance of environmental sustainability and technological innovation,

especially on the automation and digitalization fronts, also drove financial decisions. During 2022 SACMI disbursed funds allocated in 2021 totaling 50 million euros in order to achieve, over the five-year period 2021-2025, R&D goals that improve the environmental performance of ceramic and Rigid Packaging manufacturing processes. The financed projects fall within the remit of the Green New Deal and have the support of the export-financing SACE body. SACMI is also assessing financing of investments intended to raise the Group's potential for technological innovation.

Markets and trends Throughout 2022, high aggregate demand saw SACMI products perform well on both mature markets and emerging ones. Interruption of Russian-Ukrainian projects was partly offset by some multinational groups reallocating investment to central Europe and the continuing upward trend in the Americas, from Brazil to the United States. In general, SACMI has successfully leveraged its unique plant engineering expertise, which provides comprehensive solutions for every stage of production in all its business areas. Hence its focus on targeted acquisitions (e.g. in the Tiles sector, SACMI gained 100% ownership of BMR, formalized in February 2023) and a Global Network with strengthened production and assistance facilities (mainly in Brazil, Turkey and India). Africa continues to play a significant role: despite slightly smaller volumes, this is a market that rewards the completeness of the SACMI range. This is particularly evident on the rigid packaging and beverage market, which requires services close to the customer (hence the new branch in Nigeria, to be inaugurated in 2023). In China, the pandemic-induced slowdown which put numerous orders on hold and lasted longer than in other parts of the world - has now given way to a fast-paced recovery. Further outstanding performance was seen in Europe, where numerous projects have been completed or are in progress (across the key Tiles, Sanitaryware and Tableware and Advanced

SACMI

SACMI Letter from the President

Net equity (in millions of euros)

682

733

772

2020

2021

2022

1,539

1,812

800 700 600 500 400 300 200 100 0 7

Revenues (in millions of euros)

1,101 2000 1750

83%

1500

86%

1250 1000

86%

750 500 250 0

14% 2020 FOREIGN

14%

17%

2021

2022

ITALY

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SACMI

Integrated Annual Report 2022

EBIT (in millions of euro)

102

120 100 80 60 40 20 8

2020

2021

2022

145

168

2020

2021

2022

EBITDA (in millions of euro)

175 150 125 100 75 50 25 0

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SACMI

Letter from the President

Materials sectors). This largely confirms the trend - already evident in 2021 - towards a partial re-think of globalization: more and more often, enterprises are no longer relocating to areas where labor is inexpensive but, rather, investing where the product is sold to the final consumer. In general, such trends reward the quality of SACMI products on account of both their productivity/performance and their intrinsic sustainability, as ‘end consumer markets’ require compliance with the strictest environmental and workplace health and safety regulations.

training to stakeholders (customers, suppliers and partners).

Customer services are increasingly central to strategic plans in all Business areas. While such services are being streamlined by digitalization, our strong in-the-field presence - consisting of local technicians and dedicated assistance services - remains vital. In 2022, SACMI launched innovative assistance packages that aim to provide scheduled plant maintenance: this has involved on-machine implementation of new features and advanced controls that detect production drifts in advance, increasing both customer satisfaction and plant efficiency in terms of profitability, consumption and reliability.

Involvement in the community

Employment and training The workforce continues to grow. The Group now has more than 4,800 employees, with almost 100 new people hired by the parent company alone in 2022. Patents and investments are on the rise as strategic Group governance sharpens its focus on internal skills and its ability to help customers implement innovation. In 2022 alone, the Group's Italian companies invested over 42,000 hours in skills training for 2,500 employees, plus more than 16,000 hours of safety and environmental training. One of the most significant steps was the inauguration of the new SACMI Academy at the start of 2023 (the premises have actually been fully operational for a year).

Increasingly effective coordination of the Group facilities that operate across the various Businesses proved to be a key driver of employee development. In parallel, SACMI also established new facilities such as the Digital Innovation & Automation HUB, pivotal to the Group’s digital services and the nerve center for numerous joint projects with universities and research institutes.

Over the last three years, SACMI has allocated over 2.25 million euro to support local and international charity projects, especially in education and health. Key initiatives in 2022 included the donation of a next-gen electrosurgical unit to the Gastroenterology department of Imola Hospital. Another project with SACMI Engineering India provided training opportunities for children living in the most remote areas of the country. As the pandemic released it grip, the company was able to exploit the full potential of Auditorium 1919 which, in 2022, was also used to host events open to the ‘external’ world’ of schools, universities and industry associations. Together with the new Academy, the Auditorium will act as an increasingly important interface between SACMI, the local economic ecosystem and higher education. And as we look to the future, there one more goal: to make the company even more appealing to the coming generations with whom we’ll achieve our second centenary of success.

Thanks to these facilities and smooth organization, SACMI is now fully equipped to extend

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Integrated Annual Report 2022

««We stand shoulder to shoulder with our customers worldwide to guide them through the green transition. Because, above all, being sustainable means becoming more competitive. 10

It’s up to us.» Paolo Mongardi President of SACMI Imola SC

Data and information contained in the "Letter from the President" refer to the entire SACMI Global Network.

SACMI

SACMI Letter from the President

Investment (in millions of euro)

60 50 40 30 20 10 0

2020

2021

2022

N° of employees (up to 31.12)

2020

4,572

2021

4,720

2022

4,834

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The SACMI Group

Integrated Annual Report 2022

The SACMI Group

SACMI is an international industrial group with a daily commitment to improving people's quality of life. It achieves this by providing solutions with a high-tech content that are designed to meet everyone’s basic needs. Our story SACMI was founded in 1919 in the town of Imola, Italy, on the initiative of 9 young mechanics and blacksmiths united by the same ideal: work as a means to improve their social standing and that of the community. This happened at an extremely difficult time for Italy. The First World War had ended and there was a severe economic crisis, with high unemployment and inflation. From its origins as a workshop for ‘small mechanical repairs’, the 1930s saw SACMI produce its first own-brand machines, mainly for the nascent agro-industrial sector. During the bombing of the Second World War, it was our own workers who risked their lives to save the machines and equipment. Later, in an Italy liberated from German occupation, SACMI was the one of the first companies to get back on its feet. Between 1948 and the early 1950s SACMI devel-

oped two key innovations that would make company history: the first ceramic press and the first complete machine for crown caps. Years of intense development followed as SACMI worked alongside the growing Italian ceramic and packaging industries. Our vocation for ‘plant engineering’ began to take root. This saw the development of comprehensive solutions, from raw material to finished product, especially in the ceramic sector. Expansion into foreign markets began, with the first branches opening in Spain and Brazil in the 1960s. Other branches and foreign offices would soon follow across all Group businesses. By 1963, exports were already accounting for more than 50% of revenues. In 1989 the SACMI Research Center was established. Towards the end of the Millennium, SACMI developed compression technology, which would go on to be the world’s leading plastic cap manufacturing technology, flanking the historical crown cap business. With the development of preform machines, bottling lines and labeling

SACMI

The SACMI Group

machines, this put us in a position to supply complete plants to the packaging sector too. The 2000s saw SACMI enter new areas, such as chocolate processing and packaging machines. In 2008 we entered the Metal Powder sector, the first step towards a strong, well-organized presence in the automotive sector. Expertise in ceramics continued to grow, resulting in the launch of Continua+ technology, now the global benchmark for slab and sub-size forming. At the same time, SACMI developed Deep Digital, a new approach to integrated digital control of surface decoration-glazing. This was followed by the creation of a Business Unit that focuses on developing Advanced Technologies and Materials: the aim was to make the most of skills already acquired by the Group and intercept new opportunities for growth, especially in sectors linked to electric mobility and high-performance components. The 2020s see SACMI pushing ahead with investments in process automation, digitalization and sustainability. For example, the ‘circular economy’ concept is being approached from a plant engineering perspective: this involves the development of raw material recovery and water purification systems. In parallel, a complete re-think of thermal processes focuses on alternative fuels and efficient heat recovery so that individual machines or even entire plants can run on ‘zero fuel’. Such activities go hand in hand with the Research & Development of eco-sustainable materials (e.g. in the packaging sector) and the technological progress needed to implement the transition to a greener industry.

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It’s up to us to protect the future

vision

Ensuring the company handed to future generations is an even better one.

values

Loyalty and integrity We take pride in our openness and transparency. Discussions are in-depth, decisions taken together, promises maintained. We play by the rules, putting people and communities first.

Freedom with responsibility We’re free thinkers with an entrepreneurial spirit, we take the initiative and take responsibility for the results of our work. If we make a mistake, we see it as a valuable learning opportunity.

Research and innovation

mission

Innovation We’re guided by a passion for research and innovation.

Synergy

We invest in cutting-edge research, driving technological innovation.

Our flexibility lets us make full use of technological synergies and implement operational integration across widely differing industries.

Quality

Sustainability

With a sharp focus on product and service quality, we provide effective answers to the real needs of global markets.

Our Group drives economic growth by creating solutions and projects that prioritize the global community and the protection of the planet.

Partnership and cooperation We build long-term, mutually respectful, rewarding business relations with customers by working together. Working together because together we’re stronger.

Belonging Our roots run deep, yet our vision is decidedly future-focused.

Integrated Annual Report 2022

A global presence

Global value chain employees by geographical area ITALY / EMEA* / AMERICAS / INDIA / CHINA / ASEAN** / JAPAN / AFRICA /

Total

3,286 600 254 166 406 91 6 26

4,834

production plants in Italy

production plants Worldwide

* Europe (except Italy), Russia and Middle East ** South-east Asia (Philippines, Indonesia, Malaysia, Singapore, Thailand, Brunei, Vietnam, Myanmar, Laos, Cambodia)

SACMI companies worldwide Italy SACMI Imola SACMI Forni & Filter SACMI Molds & Dies Keratech SACMI Verona Gaiotto Automation SACMI Tech SACMI Carpmec B&B SACMI Beverage SACMI Packaging & Chocolate Defranceschi PET Projecta Iprel Progetti Italiansped Protesa SACMI Impianti Nuova Sma Euroelettra Velomat SACMI Service Tecnos Pack sud BMR Spain SACMI Ibérica Portugal SACMI Iberica Sucursal Em Portugal

France SACMI West Europe Luxembourg LAEIS United Kingdom Surface Inspection Germany SACMI Deutschland Sama Maschinenbau Riedhammer Alpha Ceramics

Turkey SACMI Istanbul Sanayi Ve Tic. Bozüyük Warehouse Office SACMI Teknoloji Ltd

Switzerland SACMI Packaging & Chocolate Swiss

United Arab Emirates SACMI Middle East

Poland SACMI Polska SACMI Packaging & Chocolate

Morocco SACMI North West Central Africa

Ukraine SACMI Polska Kiev Representative Office Russia SACMI Mosca Italiansped – Moscow office LAEIS Moscow

Egypt SACMI Egypt Molds & Dies Egypt Nigeria SACMI Nigeria South Africa SACMI South Africa

SACMI

India SACMI Engineering (India) Ahmedabad SACMI Engineering (India) Mumbai SACMI Engineering (India) Morbi Warehouse Thailand SACMI Thailand Singapore SACMI Singapore Indonesia SACMI Indonesia PT Molds & Dies Indonesia Italiansped – Indonesia Office Vietnam SACMI Vietnam China SACMI Hong Kong SACMI Machinery (Foshan Nanhai) - Changshu Branch SACMI Machinery (Foshan Nanhai) SACMI (Shanghai) Machinery Equipment LAEIS (Dalian) Trading

Japan Riedhammer Japan United States SACMI USA SACMI USA - Tennessee Branch Mexico SACMI de Mexico SACMI de Mexico San Luis Potosi Warehouse SACMI Molds & Dies Mexico SACMI de Mexico - Italiansped Office Cuba SACMI Imola Sucursal Cuba Brazil SACMI do Brasil Argentina SACMI Impianti Argentina

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Integrated Annual Report 2022

Dialogue with stakeholders and materiality analysis

SACMI sees the relationship with all stakeholders (i.e. all those internal and external subjects who interact with SACMI on a daily basis and have a specific interest in attainment of the organization’s goals from an economic, environmental and social perspective) as a vital component of business and growth.

tual opportunities for growth and development.

Accurately identifying one's stakeholders through the ongoing monitoring of expectations, needs and opinions provides a solid basis for an effective engagement process.

As part of ESG auditing, materiality analysis aims to identify environmental, social, economic and governance aspects considered relevant and significant for SACMI's businesses and its stakeholders. Such issues are defined as ‘material’ in that they are associated with the most significant impacts (positive or negative, actual or potential, shortor long-term) that corporate activities have (or could have) on the economy, the environment or people, including any impact on human rights. To identify the main actual or potential impacts that SACMI’s activities have on the ESG sphere the company launched a structured process that allowed for the detailed definition of the relative contexts inside and outside the Organization.

Stakeholders are those subjects on which an organization depends for its survival: for SACMI these are its members, employees, partners, suppliers, customers, public institutions, the academic and research world (including universities and schools), professional associations, other industry-related operators, trade unions, the media, and the local and international community. SACMI takes a proactive approach towards a plurality of worldwide interlocutors. It promotes constant dialogue to listen to their needs, as it is acutely aware that such discussions provide mu-

This process consisted of the following steps: • conducting benchmark analysis on a sample of 16 comparable competitor peer companies • examination of existing internal documentation (e.g. Policy, procedures, management systems etc.) • targeted interviews involving all members of the Organization’s internal Workgroup and the Managerial Team of the main corporate areas • assessment of the main international standards and frameworks adopted

Relations based on dialogue and continuous involvement reflect the company’s sense of responsibility with regard to the communities with which it interacts and its wish to create shared, lasting value.

SACMI

Dialogue with stakeholders and materiality analysis

Members, employees and partners

Suppliers

Customers 21

Public institutions, academia and research

Professional associations and media

Local and international communities

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Integrated Annual Report 2022

in sustainability reporting (GRI Standard, SASB, TCFD, etc.), including those soon to be published (e.g. ESRS, IFRS). The identified impacts were clustered on the basis of their mutual level of affinity in order to obtain a list of 30 ESG topics subject to assessment by the interviewed representatives. These issues were, in turn, grouped within six sustainability areas: Governance, Environment, Human Resources, Economic Responsibility, Suppliers and Partners, Local Community, Product Responsibility and Customers. In order to identify truly ‘material’ ESG issues and impacts for SACMI, the so-called ‘materiality threshold’ was calculated by averaging the scores of the best performers following benchmark analysis and the scores achieved by SACMI following topic-specific interviews. 22

At the end of the entire process, the results were discussed and validated by all members of the Organization's internal Workgroup. The following table describes, for each topic found to be material for SACMI, the principal impacts that company activities have on the economy, the environment and people, including any impact on human rights, and those company activities that generate, directly or indirectly, the identified impacts.

The main risks to which the Organization is exposed are also reported: these are based on the extent to which SACMI can effectively manage the issue in question and the main tools (policies, procedures, management systems, etc.) it adopts to control the issue and prevent/mitigate associated negative impacts. Lastly, the monitoring processes used to measure the effectiveness of implemented tools/initiatives and the 2030 Agenda Sustainable Development Goals (SDGs) associated with each material topic are presented. Impacts identified via the above-described process were in line with the material issues highlighted in the previous reporting cycle. More specifically, some topics identified in 2022 group together materiality topics that were considered separately in 2021 (and vice versa) in order to highlight specific aspects in certain areas. For further information on the tools used to monitor organizational processes, please refer to the specific sections.

SACMI

Dialogue with stakeholders and materiality analysis

Impact analysis The company’s potential positive and negative impacts were analyzed on the basis of the settings in which it operates and its core business:

Positive impacts on the economy

Negative impacts on the economy

Increased company profitability and competitiveness

Possible job losses in the event of production downscaling or bankruptcy

Direct/indirect job creation

Effects on local businesses, especially if dependent on company output/supplies

Contributions to the prosperity of the local community, especially where local supply chains are used and there is a high worker retention ratio

Positive impacts on the environment

Negative impacts on the environment

Adoption of advanced, sustainable technologies with low environmental impact, with direct (internal production) and indirect (production of goods supplied to customers) reduction of environmental impact

Greenhouse gas emissions and air pollution caused by industrial processes

Manufacturing with recyclable materials or renewable sources

Excessive, unsustainable use of natural resources (e.g. water, en-ergy, raw materials)

Promotion of local environmental protection programs

Risk of environmental accidents, such as chemical leaks, water and soil pollution

Positive social impacts

Negative social impacts

Direct/indirect job creation

Exposure to occupational health/safety risks (e.g. injury, occupational disease)

Higher income, greater purchasing power and personal fulfilment for members/employees

Health can be affected by environmental pollution

Contribution to social well-being and enhanced quality of life through the production of useful goods and services

In the light of this analysis, the SACMI Group is confident that its businesses have not caused or contributed to any negative impacts.

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Integrated Annual Report 2022

Area

Human Resources

Material issues

Resource development and training

Associated impact (positive and/or negative)

Activity that causes the impact

Each worker has the opportunity to embark on a path of professional growth and realize their full potential.

Training courses developed and provided via a specific ‘SACMI Academy’ process.

Availability of courses to strengthen and develop professional skills.

Structured performance assessment to evaluate skills and bridge any gaps.

Capacity to attract and retain resources and ensure occupational stability.

Human Resources

Environment

Workplace health and safety

Working conditions, internal ‘climate’ and welfare

Environmental responsibility

Improved worker health and safety through the reduction of in-company injuries.

Monitoring and recording of any incidents.

Offering a positive working environment and implementing a set of programs intended to improve employees’ work-life balance results in their psycho-physical well-being, with consequent impacts on the degree to which they can effectively realize their full potential.

Provision of a welfare package to improve work-life balance (e.g. health benefits, social security fund, policies, inter-company nursery, contracts, working from home, etc.).

Protection of ecosystems and preservation of biodiversity.

Institution of quality, safety and environmental policies; ISO14001; Unified Environmental Authorization.

Safeguards for local communities and territories with respect to extreme weather events (e.g. floods, hurricanes, desertification, etc.). Energy costs through energy efficiency actions/projects.

Environment

Energy efficiency

Safeguards for local communities and territories with respect to extreme weather events (e.g. floods, hurricanes, desertification, etc.).

Use of photovoltaic and trigeneration systems.

SDGs

SACMI

Environment

Dialogue with stakeholders and materiality analysis

Materials management

Circular economy

Protection of ecosystems and preservation of biodiversity. Prosperity of the main stakeholders with whom the Organization interacts (e.g. local communities, business partners, etc.) in terms of the availability of material resources in natural systems and ease of access to them. Customers’ health and well-being through the absence of toxic materials/substances in products offered by the company.

Implementation of models with high levels of ecological efficiency, circularity projects for certain types of waste; sustainable procurement policy; certification of suppliers’ materials.

Sensitivity and awareness of personnel and markets vis-àvis ESG issues.

Implementation of models with high levels of ecological efficiency, circularity projects for certain types of waste; sustainable procurement policy; certification of suppliers’ materials; use of IT to track and monitor waste produced.

Market availability of products and services with high environmental/social performance.

Governance

Contrasting corruption

Governance

Standards / Codes of Ethics

Local Communities

Engagement with communities, public relations

Partnerships with schools and universities

Ensuring legality to prevent laundering of profits deriving from illegal activities, episodes of corruption and extortion, anti-competitive behavior, etc.

Monitoring of corruption-related events. Implementation of Italian Law 231.

Level of customer/market awareness of and sensitivity to ESG issues.

Code of ethics; ISO 9001 and 45001.

Socio-economic conditions within local communities.

Active involvement of local communities through projects (e.g. ‘Bringing smiles through education & improvement’) and further donations in support of various as-sociations.

Involvement in social inclusiveness programs. Management of financial resources for the wider benefit of society and the economic ecosystem in which the organization operates.

Well-being and prosperity of the main stakeholders with whom the Organization interacts (e.g. employees, local communities, business partners, etc.).

Support for university degree courses. Funding of research doctorates. In-company trainees/interns and school-age work experience projects.

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SACMI

1.1

Tiles

Good results in Europe, with record-breaking performance on Italian and Spanish markets. India and the Americas reward SACMI strategies and products. The large slab segment continues to grow.

After a record-breaking 2021, the Business continued to perform well into 2022 thanks to sustained demand in ceramics and, more generally, in construction. This is evident from the upward trend in sales volumes, which actually exceeded those of 2021. Many new lines were sold across Europe, with Italian and Spanish markets reaching record levels. New installations focused on the production of both medium-large sizes and slabs, with innovative in-body 3D decoration further strengthening the SACMI range in these segments. Italy continued to be the leading market: SACMI engaged in projects with all the main groups, who mainly focused on new slab lines or extensive restructuring - based on Continua+ solutions - to expand their size ranges. Firing was also a key investment focus, with 2022 seeing the start-up of the first Maestro Digitale single-channel kiln, the FMD, and the first kiln able to run on a fuel mixture with up to 50% hydrogen, the FMH. Similarly, Spain repeated the outstanding results of the previous year, with leading Spanish producers installing slab manufacturing plants. In Poland and Bulgaria, SACMI augmented its market share with sales of new lines and a complete green field plant. On a negative note, the traditionally strong SACMI markets of Russia and Ukraine were substantially erased. Results in the Americas were particularly encouraging, being driven by both the internationalization of Italian, Spanish and Brazilian groups and local investment, particularly in the South. In Africa, traditional markets such as Algeria, Egypt and South Africa remained stable, while a difficult yet encouraging set of orders was placed in central Africa, where the strong Chinese competition is not just selling plants but is also making inroads as a key partner. In India, the strategy that led the country’s main producers to equip themselves with SACMI slab manufacturing solutions continued to be successful, leading to considerable productivity and efficiency gains. Even on the increasingly protected Vietnam market, SACMI retained absolute

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Integrated Annual Report 2022

leadership in ‘maxi’ sizes. In China, volumes were driven down by the economic crisis - especially in the construction sector - and the health emergencies that brought the country to a standstill.

From a product aesthetics perspective, there is a burgeoning demand for ‘natural effect’ materials to replace marble, stone and high-quality wood; where capable of satisfying the various aesthetic-decorative and functional requirements, such products are also sought as an alternative to synthetic materials such as resins, engineered stones and polylaminates. The large slab segment continued to expand in 2022, with several high-added-value niches such as furniture and countertops performing particularly well. More generally, the market trend towards coordinated indoor-outdoor furnishing solutions, which has seen a return of small sizes, should be noted. Moving on to machines, Continua+ continues to set the market standard for large slabs. With the expanded range now including the PCR2120, Continua+ offers unrivalled productivity and versatility: it’s also the benchmark for creating coordinated sub-sizes, minimizing waste, reducing consumption, shrinking in-factory footprints and overcoming the traditional distinction between standard sizes (traditional pressing) and large slabs (Continua+). SACMI kilns and dryers play a crucial role in meeting market demand for innovation and energy efficiency. Here, the air-gas FMA kiln has established itself as the market standard and, alongside it, the first full-digital FMD solutions capable of running on different gas-hydrogen mixes are being installed. In terms of managing factory heat balances more efficiently, ‘zero-fuel’ drying solutions and the installation of ultra-large spray dryers is making a major difference. On the decoration front, exclusive SACMI technology for the combined application of grains, glazes and other wet/dry effects is generating unprecedented interest as it allows for the digital coordination of all devices upstream (powder deposit ) and downstream from forming. New technological innovations (many of which were showcased at the Tecna international fair)

include the integrated end-of-line Dinamica Line range. Building on the progress made in 2021, this now features the new Ekosort Dinamica classification system, alongside the latest range of Flawmaster quality control systems, the new D-Roll and D-Frame packaging machines and a fully redesigned D-Pick&Place palletizer. Alongside the machines, Customer Service continued to make a vital contribution to Business results in 2022, with record spare parts and assistance sales, particularly in the Americas, Europe and the Middle East. Throughout the year, meticulous monitoring of procurement and sub-optimal functionality in global logistics hubs by SACMI's worldwide assistance facilities continued to ensure fitting levels of customer service. Remaining on the topic of assistance, 2022 saw strong growth in programmed maintenance and revamping: that expansion was also driven by the success of new digital channels such as SACMI SPACE and the ability to manage assistance requests via the e-Support service (also accessible through the new SACMI SPACE UP mobile app). The outlook for 2023 is positive, with major investment plans being launched throughout 2022 despite an unprecedented political and energy crisis. The latter has been especially harsh in Europe where it has redrawn the geography of investment, impacted ceramic factory cost dynamics (and hence margins) and upset the tile market. Indeed, 2022 saw a decline in new orders across Europe. However, this was offset by projects in Central and South America where manufacturers are converting from red bodies to stoneware and larger sizes in order to boost exports to the USA. Major sales were also made in Turkey. The drop in orders across Europe is most evident in Spain and Poland but less so in Italy, which has the world’s highest average tile price and has thus been able to absorb the spike in gas prices better than other countries. Globally, orders remained remarkably high in 2022. As a result, the early 2023 portfolio stands

SACMI

Tiles

at record levels. However, there can be no complacency when it comes to the competition: hence the importance of, on the one hand, cost control-containment and, on the other, continu-

ous innovation, which has long been a globally acknowledged SACMI hallmark.

15% consumption less

Continuous modular grinding, new kilns with digital set-ups

borem est ium eatius et apelibu sciducia adis pratent enisque dolupta tibeate velenecte volo volecte magname

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Integrated Annual Report 2022

In-body decoration and through-veining The depth and texture of natural stone with Continua+ and SACMI Deep Digital

SACMI

Tiles

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Integrated Annual Report 2022

Continua+ over

170 sold worlwide

lines

SACMI

Tiles

The main technological innovations The Business has invested in expanding and completing the range for all machines/stages of production. From a plant engineering perspective, digitalization and sustainability have been crucial drivers. Body preparation. SACMI has developed ultra-large spray dryers together with new gas-hydrogen hybrid solutions (the development of a gas-electric solution is planned for 2023). Forming. Expansion of the range has targeted productivity and versatility. For example, the PCR2120 completes the Continua+ family (over 150 solutions sold worldwide) and the enlarged range of traditional PH Veloce presses now includes new high-added-value features such as SPE Plana, self-diagnostics, P-Back dust recovery devices, etc. Continua+ technology continues to demonstrate its suitability for forming slabs and sub-sizes starting from traditional ceramic bodies (socalled ‘poor’ bodies). Decoration. In-body and through-veining decoration solutions have been developed, with a sharp focus on countertops and the decorations/textures that imitate natural stone. Hence the strong market performance of the exclusive Deep Digital system for the creation of sophisticated material-like effects.

Firing. FMD Maestro kilns with digital set-up launched. The full-digital solution was developed and launched in parallel with the first FMH gas-hydrogen hybrid kiln. Thermal process control. Consolidation of the ‘zero fuel’ concept for dryers is part of a wider drive towards factory energy efficiency that also involves new thermal waste management optimization solutions (heat exchangers for kiln fumes) and treatment of organic compounds in fumes. Raw material recovery. Alongside in-line scrap recycling systems, note also the newly developed ultra-filtration solutions to purify process and service waters (e.g. washing in the glazing dept.). End-of-line. The Ekosort Dinamica sorting line was joined by the new packager and palletizer (Dinamica Roll, Dinamica Pick&Place). Quality control. The year also saw the launch of OPTIMA, a comprehensive (unfired) density and edge control device integrated on the PCR. Alongside it, the new Flawmaster checks finished products exiting the selected area. Both systems pave the way for a new approach to inspection along the entire line. New HERE modules (quality control, maintenance) and the first lot tracking solutions complete the picture. Training and close customer support. The Business presented an updated edition of the Tiles Technology Manual - co-written with the Laboratory - at the Tecna international fair. Note also the product development work done in synergy with the training system and the Tiles and Sanitaryware Laboratories (e.g. ArtTooling project with ISIA-Faenza University of Design).

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Integrated Annual Report 2022

Impact on sustainability 2022 saw the launch of the Up To Us campaign, aimed at promoting the key environmental advantages of SACMI machines/plants. Decarbonization. Expansion of the ‘Maestro’ kiln range with the new FMD à 15% less consumption thanks to ‘full digital’ control of recipes/optimization of firing curves, fewer NOX emissions and 1,108 tons of CO2 saved every year. New FMH kiln with fuel mixtures containing up to 50% hydrogen à 23% fewer CO2 emissions compared to a 100% CH4 kiln.

Emissions. 141 Continua+ lines in operation in 2022 à 130 GWh saved and over 52,000 tons less CO2 released into the atmosphere (compared to equivalent traditional lines), 67,000 liters less waste oil. Release of DHD-compatible heads with water-based inks à fewer solvents, less pollution, CO2 emissions down by an estimated 100 ton/year. New system to abate organic compounds in fumes, limiting the impact of production on local communities (e.g. odorous emissions). Energy . “Zero fuel” dryer à 7,700 thermal MWh less compared to a traditional dryer) and CO2 emissions down by 2,200 tons per year. New heat waste recovery solutions (heat exchangers), less heat lost through kiln chimney. Configuration with grinding water pre-heat systems à 3,200 thermal MWh less for each production line, a CO2 emissions cut of 650 ton/year. Water/waste. Ultra-filtration for purification of process and service water (glazing department washing) à 10,000 cubic meters less water per year, purified water can be reused in high-grade processes (body preparation). In-line systems for total waste recycling, minimization (<1.5%) of compacted waste during forming. Further waste reduction and resource optimization with process control and feedback systems (e.g. OPTIMA). Less consumption of water and chemical additives thanks to high-efficiency MMC modular mills.

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Tiles

23% emissions fewer

New FMH kiln with gashydrogen mixes containing up to 50% hydrogen

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1.2

Whiteware

Sanitaryware All the major international groups have renewed their confidence in SACMI products. Sustainability and automation continue to play a key role in the development of new technology.

As in the preceding year, orders in 2022 continued to increase, as demonstrated by significantly higher revenues and volumes. This upswing stemmed from a combination of several highly diversified projects, from multi-year investment and modernization plans to the supply of additional machines for existing customers both in Italy and abroad. All the major international groups demonstrated their confidence in SACMI with a constant flow of investment in automation and technology (e.g. new kilns and dryers), all designed to deliver energy savings and ready to use alternative fuels such as hydrogen. Investment was particularly high in China, where local branches of the industry’s leading multinationals are modernizing or expanding their plants. Key projects are also under way in Egypt, paving the way for future orders. Given the difficulties triggered by the geopolitical crisis - which led to the cancellation or relocation of ongoing projects within the Russia area - the results in 2022 should be seen as more than satisfactory. There was also a tendency to reallocate projects and investments in end product outlet markets, a trend first observed in 2021. September’s Tecna international trade fair underscored SACMI's role as industry leader and its excellent relations with the market. The event was a valuable opportunity to meet customers face to face again and illustrate the various sustainability- and automation-focused innovations from a technological and plant perspective. Such themes were also central to the We ARE Green and We ARE Environment campaigns, designed to illustrate a full range of environment-focused solutions and link them to the topics of factory automation and digitalization (We ARE Automation) and research (We ARE Research). All subsidiaries made a significant contribution to the overall Business result. Their success in overcoming the additional challenges of heavy workloads and a daunting procurement scenario should be seized upon as inspiration for further growth in this current year. Assistance also continued to perform well,

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Integrated Annual Report 2022

with several new contracts being signed (e.g. the supply of spare parts); however, the need to strengthen the organization and provide better post-testing customer support needs to be addressed. As in previous years, 2023 began with a strong order portfolio, suggesting further consolidation

of positions and sales volumes. To offset the unpredictability that has worked its way into order patterns as a result of economic and geopolitical tensions, SACMI will need to leverage its global outlook and the strong sense of unity, flexibility and adaptability the Business has demonstrated in recent years.

The main technological innovations Automatic finishing - another step towards complete plant automation - is gaining ground with leading Italian players. Further projects are under way in Italy and the goal is to expand foreign sales in 2023-24. Early 2023 saw the first orders for the exclusive SACMI system for the ultra-filtration of wastewater, first presented at the Tecna international fair. 38

The year also underlined the soundness of ‘by tooling’ digital resin mold modelling (direct milling of molds from porous resin blocks): offering clear advantages in terms of cost and development time, this method now accounts for two thirds of all molds produced. ‘By tooling’ development methods are increasingly popular among customers, as highlighted by the doubling of CAD/CAM modeling capacity at the Imola site (scheduled for 2023) and completion of a project to make CAD/CAM milling case molds, a step designed to take the industry towards ‘full-digital’ mold production. In casting, development of solutions with ever-greater automation content continues apace, also on complex (one-piece) items. On robotic applications, investment has targeted robot programming systems (Smart Off Line NG), the aim being to make programming itself simpler and therefore more effective at every stage of the process in which it is used (white and green finishing, glazing, kiln car loading). Quality control automation progressed with further development of Qualitrack, a joint project involving Gaiotto, Protesa and others. The current goal is to continue with in-the-field testing of the system at industrial level. Research & Development into new products that strengthen quality and productivity, and in more sensitive areas related to the environment and working conditions, remains an essential part of the Business: hence, in 2023, investment in new skills, mainly in the areas of production, hw/sw design and mechanical design. SACMI works alongside customers to define and field-test the most profitable ways to digitalize and automate production. The allocation of investment in skills and resources continues to prioritize intralogistics and environmental sustainability.

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Whiteware

€3 million of investment in R&D. Publication of an updated edition of the Ceramic Sanitaryware Technology book. Enhanced customer training services. Partnerships with higher education, in particular the ISIA-University of Design of Faenza, on new digital mold modeling technologies for the relief texturing of sanitaryware (ArtTooling) With Gaiotto, development of new off-line robot programming solutions, also part of a wider project co-funded by the Emilia-Romagna Region investment stimulus tender. First operational installations of RobotClean (automatic finishing) and RobotLoad (automatic loading), with development of software to optimize kiln loading. Development and marketing of the first prototype of a wastewater ultra-filtration plant.

Impact on sustainability Actions aimed at greater process sustainability focused on safeguards for workers and better management of raw materials. Further reduction of heavy-duty or repetitive manual processes/tasks on the line (RobotClean, RobotLoad) Development of software to reduce consumption and optimize flows (off-line programming, kiln load optimization) Water treatment, estimated reduction in water consumption up to 70%, recovery of 100% of solid precipitate à first plant in operation in Italy in 2023. In a year, a plant producing 750,000 pieces with the SACMI water treatment system can save up to 40,000 m3 of water. Reduced energy consumption/alternative fuels: • new-generation tunnel kilns (TWS Neo Riedhammer) à -30% consumption (2,500 kWh saved each year, less 1,300 tons of CO2 equivalent) compared to a traditional kiln). • development of hydrogen-ready solutions In a year, a plant producing 750,000 pieces with SACMI-Riedhammer energy recovery systems can cut in-atmosphere CO2 emissions by up to 3,000 tons. Complete reuse of raw materials/waste: system for full recovery of waste (green or dried but also fired waste to replace hard body components) à reduction in raw material requirements estimated at >10%. Packaging sustainability project (less overpackaging, use of sustainable and/or recyclable materials).

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Whiteware

Tableware Since the pandemic, the recovery has gathered pace. Overall Business results stemmed from good performance across the entire network of companies: SAMA, Riedhammer, SACMI Imola and Gaiotto.

Compared to Sanitaryware, Tableware bounced back more slowly from the pandemic, which had all but paralyzed the Ho.Re.Ca. sector. However, a healthy recovery in orders during the year now allows us to forecast satisfactory sales volumes for 2023. Significant contributions to this anticipated result are expected to come from major plant expansion projects in the United Arab Emirates and Bangladesh. From this perspective, Riedhammer porcelain kilns - renowned for their quality and reliability - are set to play a decisive role. SACMI has a network of companies that contribute to the Business: one of the most important is SAMA, which is involved in both complete plant projects and the supply of individual machines (e.g. isostatic presses), with significant sales in Brazil and Portugal. They also supply the casting and glazing machines sold in Portugal, Germany and India. The Russia-Ukraine conflict has seriously impacted the Business: already-acquired orders have been cancelled and projects that were well under way are at a standstill. Like Sanitaryware, the Tableware industry is trending towards a reallocation of investment in end product outlet markets. In addition to the completion of some large-scale projects and the anticipated upswing in new orders, results in 2023 will also depend on the sale of tableware kilns: machines that retain a high unit value, despite the backdrop of strong competition from low-cost suppliers and the medium-long term pattern of investments.

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Integrated Annual Report 2022

The main technological innovations Riedhammer kilns for porcelain and SAMA technologies for isostatic pressing and pressure casting continue to set market standards for quality and reliability. Automation is on the rise (e.g. in robotic finishing), driven by synergy with Gaiotto. Publication of the first Tableware technology manual.

Further development of the PHO451 and PHO700 family of isostatic presses: more than 500 machines have now been installed worldwide. Co-development of automatic (OFM) and robotic (ROF) finishing by SACMI, SAMA and Gaiotto. Further consolidation of the PCM Green Series pressure casting range (PCM 200 Green/D). A broader dip-glazing range (Mono 10T Evolution) and development of alternative techniques (spray-glazing, COLORFLEX).

Impact on sustainability Drastically reduced consumption - up to 30% less - with SAMA “GREEN SERIES” presses and Riedhammer kilns equipped with heat recovery systems Further reduction of manual processes. The main already-completed projects include a robotic finishing line for unfired items with large/irregular profiles, all integrated with the PHO700 isostatic press.

SACMI

Whiteware

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SACMI

1.3

Advanced Materials

Metal Heat exchanger plates are driving good business results. Powder Metal is also bouncing back by finding applications in areas other than the traditional automotive sector. In Cookware, SACMI is strengthening partnerships with market leaders.

For Metal, 2022 was a highly positive year, with sales increasing by about 50% compared to 2021. This increase was mainly driven by rising orders for the sheet metal presses used to manufacture heat exchanger plates. Indeed, the heat exchanger segment - where SACMI has a multi-year partnership with the market leader with its range of PHL presses - continues to surge. Four presses were entered on the balance sheet in 2022, six new lines are to be installed in 2023 and ten are already in the portfolio for 2024 in various locations (Sweden, Italy, China). A continuance of the dynamic of previous years, this reflects the growing demand for heat pumps in the construction sector, where they are replacing traditional boilers in order to drive down gas consumption and consequently lower CO2 emissions. In aggregate terms, PHL sales accounted for approximately 40% of Business revenues in 2022. This expansion has led SACMI to be more proactive on the market, resulting in the first sale in Italy of a 6500-ton PHL and numerous contacts with other manufacturers with a view to future projects. Last year also saw the Powder Metal sector recover to some extent. Despite a general market shrinkage - linked to lower demand for internal combustion engines as the world pushes ahead with vehicle electrification - the Business performed well: sales were made to new customers in Europe and the United States, also in non-automotive sectors that are less affected by the above dynamics. The outlook is stable, although the market is unlikely to return to levels seen in previous years. Note also that a high-tonnage MPH press (800 t) was sold to a primary Thai customer.

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Integrated Annual Report 2022

70%

The energy requirement reduction target, to be achieved by pushing ahead with the development of electric presses

The helical gear project progressed, moving on to the industrialization stage and finalizing the first sale in Italy: both Italian and international customers have shown considerable interest in the advantages offered by this innovative process. In the Cookware sector there was a strengthening of the partnership with the leading European player, to whom a third and fourth press have

now been supplied as part of a multi-year investment plan: a fifth will be delivered next year. Moreover, innovative solutions were supplied to an Italian customer to automate accessory systems around the press. Following the 2021 growth spurt, 2022 saw a market slowdown as a result of the Russia-Ukraine crisis (Russia had been a major outlet market).

The main technological innovations In hard metal (small components such as inserts for high-performance precision cutting tools), SACMI extended the range of full electric e-MP presses by developing the first 80-ton solution together with a customer. It was tested at the start of 2023. This constitutes a major development, as the market average for this type of machine is 10-30 tons.

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Advanced Materials

The PM field saw the development of the new DWL system (lubrication in the mold wall). This groundbreaking solution eliminates the need for lubricant inside the powders to be pressed, thus preventing the formation of microporosity during the sintering process and the consequent limitations in terms of attainable piece density. Tests yielded satisfactory results in terms of both process efficiency and the increase in density; the latter now approaches the theoretical densities of iron and steel, paving the way for new fields of application. Following years of research, the state-of-the-art method of manufacturing helical gears by rotating the die punches saw its first successful industrialization. The undisputed advantages of these gears (better torque transmission, noise reduction) give this solution good potential in the field of electric mobility. Moreover, compared to a traditional manufacturing process with machine tools, this technique delivers higher efficiency and lower costs. Moving on to heat exchanger plates, Beckhoff automation was implemented across the entire PHL range, while Gaiotto worked on the creation of robotic modules to automate press loading and unloading. On the Cookware front, note also the first ‘super-fast’ automation, installed by an Italian customer to serve a 5,000ton press. 47

Developments on the ‘moldflux’ project - complete plants for the production of the powders used in the steel industry - saw the installation of a spray dryer in Japan. Furthermore, two separate orders were placed for two new plants in India. The development of new IoT tools designed to collect data and KPIs from the presses has applications in multiple industries, as do the new scheduled maintenance plans (SACMI Smart Service).

Impact on sustainability A new generation of presses with low energy consumption. The new DWL (mold wall lubrication) system allows for a reduction in thermal cycles, thus reducing fuel and electricity consumption and containing CO2 emissions. Enhanced understanding and development of electric presses, which consume, on average, up to 60-70% less than a hydraulic press. Design work begun, together with a customer, on MPH presses with low energy consumption. This is achievable thanks to a new drive system featuring main axes that are moved by an electro-hydrostatic system instead of a hydraulic one, cutting energy requirements by 40-50% compared to a hydraulic solution.

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Integrated Annual Report 2022

Refractories

A well-balanced, diverse customer portfolio has limited the impact of project postponements in the Russia-Ukraine area. In a sector still characterized by numerous manual tasks, the drive towards automation is gathering speed.

After several highly positive years, the Business slowed down in 2022 following the shutdown of several ongoing projects in the Russia-Ukraine area. Nevertheless, Laeis achieved good results. This was largely due to its extensive, diversified customer portfolio and its widely acknowledged technological leadership in the manufacture of presses for refractory materials (the latter are widely used as linings and insulators in steel, cement, aluminum and glass furnaces). It should be noted that 2022 also included the project with Gaiotto to develop new automation solutions (e.g. automatic press and kiln car loading and unloading systems). In an industry where there is still widespread use of manual or semi-manual handling, this offers opportunities to automate the entire process all the way up to the shipping department. In general, and despite the projects at standstill in the Russia area, the overall market remains buoyant; this is because it aligns with the performance of the continuously-growing global steel industry in which refractory materials are used extensively. One of this year’s most important projects is the one finalized in Korea: this facility will produce ‘saggers’, the refractory boxes used to heat-treat the anodic and cathodic powders of lithium-ion batteries. Demand for batteries is growing exponentially, as is demand for use of the materials required to make them. SACMI Nanhai has consolidated its direct production of HPF model presses for the Chinese and Indian markets. A similar development is expected in 2023 with regard to the PHR versions produced by SACMI Imola, the goal being to increase market shares in the most price-sensitive markets (some presses of this type have already been installed). Alongside automation solutions and presses, the refractory kilns produced by Riedhammer also performed positively in 2022 following the development of new, more efficient, high-performance tunnel kilns.

SACMI

Advanced Materials

The main technological innovations New automation solutions, direct production of presses in SACMI Nanhai for the Indian and Chinese markets, new maintenance plans. Consolidation of direct production of Laeis presses in China (SACMI Nanhai). Development, with Gaiotto, of standardized automation systems for loading and unloading bricks and kiln cars. Development of on-press IoT devices to collect production data and KPIs, with the ability to provide in-Cloud assistance services. Implementation and promotion of new maintenance plans (SACMI Smart Service).

Impact on sustainability Better working conditions thanks to fewer manual tasks. Development of an optimization model to reduce press-related consumption and production costs (hydraulic optimization, components, software interface).

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Advanced Materials

Lithium Development of the European and US gigafactories announced in 2021 starts to take shape. Riedhammer successfully intercepts market trends, finalizing numerous sales on advanced markets.

As in previous years, the progressive electrification of the automotive sector is driving a global surge in demand for lithium batteries. Riedhammer, which operates within the battery production chain, has been developing complete solutions for the thermal treatment of battery anode and cathode powders for some years. The main changes - signs of which were already glimpsed in 2021 - concern the supply chain. Increasingly, both Europe and the United States are witnessing the construction of giga-factories for the manufacture of batteries, previously the near-exclusive domain of China. Riedhammer has succeeded is seizing related opportunities by finalizing numerous sales with new customers who operate on advanced markets: those customers were attracted by the quality and guarantees offered by Riedhammer, in contrast to a Chinese market characterized by numerous players and fierce price competition. In addition to manufacturers who develop the entire product (the finished lithium battery), Riedhammer has also intercepted several customers in the component-only segment (the powders for anodes and cathodes). Numerous projects are under way, again both in Europe and the USA, with order books looking healthy for 2023 and 2024. The extraordinary expansion of the industry, which in all likelihood will continue for years to come, has led SACMI to invest heavily in both technology and commercial penetration capacity. New synergies with the Imola parent company are also on the horizon, with new applications of potential interest to this market being investigated. Furthermore, Gaiotto completed development of new automation solutions that ‘turn’ the saggers (the refractory boxes containing the powders) automatically as they enter and exit the kiln. Several sales have already been finalized in a segment hitherto covered by third-party suppliers. In general, crucial new synergies are being formed among the various Businesses and the network of SACMI companies. These could create major openings, especially in the lithium sector, with new opportunities and potential fields of application that extend beyond heat treatment.

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Integrated Annual Report 2022

The main technological innovations The extraordinary growth in sales and the launch of key projects in Europe and the USA has accelerated the R&D that aims to boost kiln performance and efficiency. In particular, RH has created longer and wider kilns to optimize firing cycles: • Development of the first 100m long roller kiln for calcining lithium powders. • Development of a new water-type heat exchanger in the kiln exhaust system to preheat the water for the absorption chiller used to cool the water in the kiln cooling circuit. • Project for a new generation of 100% electric and hydrogen-powered tunnel and shuttle kilns.. On the automation front, in addition to sagger handling SACMI has developed a ‘smart vision system’ with optical sensors that monitor their state of wear. 52

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Advanced Materials

Impact on sustainability Two major challenges within the industry: energy saving and exhausted battery recycling. Efforts to develop a complete supply chain under way. Analysis relating to the used battery recycling chain was carried out, with developments including an assessment of various technological alternatives, also with a view to reducing environmental impact (particularly in NMC, Nickel-Manganese-Cobalt, LFP and Lithium-Iron-Phosphate technology). Studies also focused - through the establishment of a pilot plant - on optimal plant sizing and potential patents for the pyrolysis recycling process. In addition to full-Hydrogen (or electric) solutions, the drive towards energy savings also focused on more efficient systems for the recovery of chimney heat (with heat exchangers) and next-gen self-recovery burners.

100 m Length of the first kiln developed to calcine lithium powders. Project for 100% electric and hydrogen-powered tunnel and shuttle kilns also under way.

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Advanced Materials

Technical Ceramics Strategic partnerships in the aerospace sector moving ahead. Good stand-alone machine sales thanks to solid performance by the SACMI Imola-RiedhammerAlpha Ceramics network.

Technical ceramics have a broad, diverse application range. In this sector, much of the focus is on the sale of stand-alone machines, in concert with a network of companies made up of SACMI Imola, Laeis (presses), Riedhammer (kilns) and Alpha Ceramics (the latter plays a key role in both testing and direct production). Riedhammer won a major order for kilns from a global aerospace firm. These will be supplied during the current year (this is a second order, coming a few years after the first). Sales of solutions for the heat treatment of alumina and foamglass (recycling and the production of expanded glass fibers) remained stable. Note that foamglass is used extensively as a heat insulator in the building industry.

Carbon A stable 2022, with a positive outlook for the current year. Key projects with major players finalized.

Market performance continues to follow the typical ‘spike’ pattern (large-scale projects implemented on a non-annual basis). 2022 saw steady progress, with the finalization of several plant projects by major producers. In the field of carbon electrode and anode heat treatment solutions (for the special steels and aluminum sectors respectively), 2022 saw the Business finalize a major project in Kazakhstan. Moreover, in 2023 various projects are expected to take shape in the Middle East. Again, this sector mirrors trends on the steel market and has encountered some difficulties following the stoppage of projects in the Russia-Ukraine area.

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1.4

Rigid Packaging

A 2022 marked by net growth, with major technological innovations being presented at the industry’s key trade fairs. SACMI continues to develop solutions and provide market support, guiding customers through the green transition.

In comparison to the preceding year, 2022 delivered strong growth (+23.7%) From May until the end of the year, purchases remained at optimal levels thanks to high machinery sales volumes on those markets most favorable to SACMI products, namely Africa, India and China. These results were, in part, driven by a build-up of orders carried over from 2021, when orders were 30% higher than in 2020. Higher product costs, combined with difficulties in procuring certain components, especially electrical materials, resulted in the Business making managerial changes to re-adapt the available components. These factors placed the entire organization under constant pressure, from purchasing department to the technical offices, from production to assistance. It also involved a certain lengthening of order lead times with respect to the usual production schedules. Nevertheless, the saturation of output capacity caused by the surge in orders led to a substantial improvement in plant management compared to 2021. Facility costs began to rise as travel restrictions loosened further (by comparison 2021 had yet to shake off the aftermath of the pandemic and the near-standstill of some supply chains, as occurred in China). The second half of the year saw the return of strategically important fairs such as Drinktec and K. These gave the Business an opportunity to meet customers face to face, illustrate its range of innovative technologies, products and services, and obtain welcome feedback. The value of attending such events was evident: more than 500 new contacts were obtained from visitors to the SACMI stand, most of them in Africa, India and the Middle East. Returning for a moment to the main markets, results in China were outstanding despite the pandemic, with some (plastic cap) projects resuming in good time to make a solid contribution to the end-of-year result. At the end of the year, China also saw numerous ring-pull caps projects make headway. The effects of these projects will mostly be felt in 2023.

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Integrated Annual Report 2022

In India, close collaboration between the Laboratory, the sales team and the major brand owners (mainly CocaCola, Pepsi) strengthened SACMI's role as a pivotal technology provider on the beverage cap market. A series of key investments was completed, with India continuing to grow and confirming its status as one of the most important future-focused Business development areas. The country's importance is also reflected in the expansion, completed in 2022, of the local SACMI Engineering office where a new area dedicated to the Rigid Packaging business was inaugurated.

Africa continued its upward trend, largely as a result of positive sales synergies between cap and preform machines. Sales volumes remained high as in preceding years. Consequently, there is a growing need to pair these growing sales and the now-extensive installed machine pool with an adequate level of service and technical assistance. Hence the inauguration of a new branch in Nigeria, scheduled for 2023. From a product perspective, efforts to enact a green transition have proceeded along three main lines: lower machine consumption (CCM and IPS), simplified design (also by reducing overall dimensions) and a wider range (with particular regard to the IPS) to optimize consumption and performance according to the specific product/plant. Regulatory aspects are playing a pivotal role in driving both technological and product-related developments in the industry: key examples include the Directive on single-use plastics, which comes into force in 2024, and the Packaging and Packaging Waste Regulation Directive which sets 2030 targets for the amount of recycled plastic used in products. As it has already succeeded in doing for the introduction of the single-use Directive, SACMI aims to guide customers towards the transition by leveraging its acknowledged technological leadership and in-depth knowledge of materials, technologies and production processes. For the Customer Service area, results were the best ever, with spare parts sales up 20%. Such performance is explained not just by the growth of the installed machine pool over the last

decade, which has widened the market for spare parts. It also stems from sales policies that have allowed SACMI to seize multiple opportunities. The year saw a strengthening of the sales organization (SACMI Imola and, for India, SACMI Engineering). Results also benefited from the end of the pandemic: in 2022 this generated extraordinary demand for spare parts and maintenance kits (e.g. throughout South America). Note also a series of upgrades and new solutions, such as carousels with bushings for the CCM, expansion of the i-SLIT range, new induction kilns for metal: all in addition to maintenance packages combined with service, with synergies between spare parts sales and technical troubleshooting.

Plastic caps With a year-on-year growth of 27 percent, this segment played a key role in determining the final balance by stimulating product sales in other areas of the Business (e.g. preform machines and vision systems). SACMI retained its outstanding reputation, authority and leadership in the beverage closures production industry, both with bottlers and converters. Its standing with regard to the transition to new standards and the development of new products is equally solid. In this sense, SACMI-developed solutions designed to implement the European regulatory framework for single-use plastics (tethered caps) have generated huge interest, with various projects now under way in actual production plants. Self-sacrifice and team spirit have - starting with the tooling department - contributed significantly to this exceptional result.

Metal caps After a two-year slump due to the pandemic-induced drop in (bottled beer) consumption, 2022 saw a net recovery, with volumes surging by

SACMI

Rigid Packaging

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Integrated Annual Report 2022

SACMI

Rigid Packaging

13.3%. Looking ahead to 2023, note the significant influx of orders for ring-pulls for the Chinese market.

Preforms The end-of-year result was a major improvement on 2021, despite fluctuating order patterns (initially high, flat in the middle of the year, then a recovery). The year 2022 saw considerable progress with the expansion of the range (new IPS 300) and the launch of distinctive solutions such as the vision system integrated on the press.

Containers The main solution in the range is the CBF, currently affected by poor sales performance. While CBF has distinctive process characteristics and has, in the past, generated strong sales, customers continue to struggle to identify new segments in which containers can be produced profitably with compression-blow forming technology.

Computer Vision Systems Results for the year were excellent, underscoring the soundness of SACMI products and the importance of such systems on machines in all areas of the Business. Revenues were up by 36%, bringing new synergies, both internal (plastic and metal) and with other Group companies (Velomat assembly machines).

Post Processing The Division includes technologies downstream from the molding process: for example, the assembly of complex caps and the development of post-processing tamper band slitting and folding solutions. Tethered sales volumes have slowed as producers await a 2023 and, above all, a 2024 that will take the industry closer to application of the EU Directive. The Division has been deeply affected by the Russia-Ukraine conflict, as it had numerous projects in the area: hopefully, these will resume.

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Integrated Annual Report 2022

The main technological innovations

Plastic caps. Digitalization as a tool to raise efficiency and lower environmental impact was, as seen on the latest generation of SACMI cap presses, a key focus throughout 2022 and remains so. For example, on all its latest-generation CCM presses SACMI incorporated the new, advanced Smart Pack (i.e. sensors for advanced monitoring of factors such as pellet positioning, circuit and mold thermoregulation) and Smart Care (in-cloud machine data sharing to drive proactive maintenance) control packages. New product development largely reflected the global drive towards greener solutions, albeit with different speeds and methods to match different regulatory contexts. More specifically, SACMI developed new caps for the 26/22 mm transition and the new GME 30.40 and GME 30.41 neck standards à 30% less plastic, performance remaining equal (water, CSD). An extensive installed machine pool and different market contexts led SACMI to develop specific lightweighting proposals (e.g. lightened necks and relative caps), beginning with the most widespread standards on the market and, therefore, the products most used by customers. Doing so was facilitated by SACMI’s strong standing on the market and validation of new standards in collaboration with CETIE. Metal caps. The ULG (ultra low gauge) project for the development of a lighter crown cap, with expected metal savings of up to 20% while still meeting the same requisites. Preforms. A revolution in process control, thanks to on-press integration of AI-powered intensive quality checks. New IPS 300. Following the first model, the IPS220, and the IPS400, this machine completes the SACMI range and extends its market penetration capacity. Key developments include further energy savings: this was achieved by implementing KERS systems to retrieve the energy stored in mold movement and by introducing an electric drive to clamp the molds themselves. The result is a specific consumption of just 0.2 kW/kg. PVS156. Presented in October at the K fair before entering service in 2023, the PVS156 is the first preform press to feature an integrated on-board vision system. Machine learning algorithms allow the system to identify and classify any defects at the pressing stage and create the conditions needed for real-time correction of production parameters and recipes. Quite unlike anything else seen on the market, these developments are set to play a pivotal role as vision systems gradually evolve from ‘defect controllers’ into ‘process controllers’, with considerable benefits in terms of efficiency and optimization of the entire production cycle. Looking to 2023, we expect to see the new IPS 500. This will further extend the range, delivering efficiency and tailor-made performance to match any production requirement. Containers. PET as a replacement for traditional resins is being investigated: an innovative process already tested by the SACMI Laboratory. Work has now begun on a simulator that can be used to test the validity of the

SACMI

Rigid Packaging

New neck-cap standards

30%

less

plastic, performance remaining equal

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Integrated Annual Report 2022

separate compression and blowing processes. This project is already at an advanced stage and is expected, in the first half of 2023, to yield information that will be useful for assessing whether and how to invest in it. Opportunities also include using PET to replace the resins most commonly employed to make containers such as HDPE and PS. Here, the SACMI Laboratory has worked alongside leading customers to prototype and test a process to manufacture the new PET yoghurt pots and probiotic bottles. The tested process is a two-stage one: the blowing side is similar to that used to produce beverage containers and the compression process, in which SACMI is the world leader, is used to make the preforms.

Computer Vision Systems. The entire range has benefited from a major standardization drive: this ongoing process aims to simplify production and reduce costs. Work is also under way to make systems more compact in order to reduce their environmental footprint and make them more versatile. In the digital-AI sphere there was a key development with regard to ‘management’ of systems: the new state-of-the-art Classy AI dashboard (for the automatic identification and classification of defects), soon to be available across the entire range. Given the importance of these systems and their increasingly pervasive use on production lines, SACMI has begun producing some of them directly at its facilities around the world (e.g. the CHS in China) to optimize production plans, delivery times and services. Note also the new solutions designed to integrate the systems on the machines (e.g. PVS156 on the IPS300, Elioscan + DMD system – digital metal decoration) and the development of new light, modular, easy-to-install systems (new MetalSight, presented in 2023). Post Processing. In 2022 Velomat further refined its multi-component closure assembly solutions for the Food & Beverage, cosmetics, pharma, electronics, medical and automotive sectors, with the company continuing to grow by nurturing technological and commercial synergies within the SACMI Group. SACMI also expanded and diversified its i-Slit range, a key accessory for tethered applications that ensures process repeatability, slitting accuracy and optimized maintenance.

SACMI

Rigid Packaging

Impact on sustainability

Plastic caps. In the plastics sector, environmental sustainability is a vital issue from several perspectives. Hence the Division's focus not just on the ‘product’, the cap manufacturing line, but also the upstream (raw materials) and downstream (the finished cap) stages. On the machine front, 2022 saw the launch of the new CM-Flow extruder. Able to reduce electricity consumption by over 20% thanks to innovations in the plasticizing unit, this solution features a new hydraulic system (lower oil requirements) and dynamic pressure control of the pump that adjusts the incoming plastic flow. During the year SACMI also launched a mold optimization project to reduce cycle times and, therefore, consumption (output remaining equal). With regard to the finished cap, note the development of multiple tethered solutions. These respond to a full range of market needs, providing producers with valuable support as they make this transition. Looking to 2030 (i.e. the Plastic and Plastic Waste Regulation Directive), SACMI is developing a lining machine (PMD) for floating diskettes on plastic screw caps for reusable plastic bottles: on some markets, this could provide a valid stimulus for re-use (returnable PET or glass). Moving on to raw materials, SACMI also launched, among other things, a feasibility study on the use of recycled HDPE from a cap-to-cap perspective for the beverage sector; such research aims to stay ahead of regulations that will necessitate the use of increasing quantities of recycled resin in all plastic products. The Laboratory, meanwhile, is developing cellulose fiber cap prototypes; this will ensure it is ready to step in as a key technological partner with major companies wishing to explore this line of development.

Metal caps. PMA annular lining machine. This SACMI solution makes it possible to supply products that use less plastic and are, above all, PVC-free. With the ULG project, SACMI delivers net savings on raw materials without lowering cap performance. From an environmental perspective, reduced raw material requirements are combined with significant energy savings during production- -> crown caps produced worldwide, about 300 billion; with ULG (SACMI patent pending), -20% sheet metal consumption (requisites remaining equal), reduced processing energy requirements. Preforms. With design focusing on the recycled PET supply chain , machines are able process ever-increasing quantities of flake-form rPet. Together with its partners, SACMI made further improvements to the IPS range, which can already produce items by using up to 100% rPET and up to 50% PET in recycled flake form, a percentage that can be increased to 75%, simplifying management (by using a single hopper). As on the CCM range, the SACMI Smart Pack and Smart Care control and assistance packages will be extended to IPS. Containers. Cellulose fiber, nature’s most abundant polymer, is 100% recyclable. Major multinationals are highly interested in the potential of the new packaging, now being tested by the Laboratory.

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Integrated Annual Report 2022

SACMI

Rigid Packaging

One of the most promising container projects concerns the development of a line that can produce packaging made not just of cellulose fiber but also recycled PET or ‘hybrid’ plastics. Numerous multinational companies have shown interest in this SACMI project on account of the groundbreaking nature of the technology and the potential for brand enhancement from a ‘plastic-free’ perspective. Post Processing. Velomat created an assembly solution that allowed a leading international player to produce the market’s first ever dispenser made entirely of plastic components (i.e. without springs or metal spheres), aiding proper disposal from a circular economy perspective.

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SACMI

1.5

Beverage

Healthy order books and steady investment in new lines. Excellent labeling machine performance. Africa and the Middle-East remain the main markets for the sale of complete plants.

2022 was a positive year for the Business in terms of both complete plant sales and the supply of stand-alone labelers, with results surpassing the pre-pandemic average. During the year there was a healthy recovery on the orders front, largely due to the Business’ ability to continue investing in new product lines that intercept specific market needs. EBIT increased, driven by a combination of effects, in part associated with positive market dynamics, in part an effect of sales/product/industrial strategies implemented in recent years. Machine sales remained stable, with a changed production mix and higher labeling volumes having positive effects on the income statement. However, procurement difficulties persisted throughout the year, affecting the delivery of new plants. Revenues generated by spare parts, revamping and technical assistance, instead, increased considerably (+23%). Facility costs rose as a result of a post-Covid recovery spike in business, technical and after-sales activities and higher utility costs.

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Integrated Annual Report 2022

Labelers Volumes grew significantly (+30%) thanks to a sharper focus on key markets. Mature markets – Western Europe, North America – played a decisive role in achieving such volumes, the key drivers being new products designed for the beer and spirits segments. Sales were stable across Europe and benefited from an upswing in the Americas. Emerging economies (Asia, Africa and the Middle East) also showed clear signs of recovery. Numerous major orders were completed in 2022: note, in particular, the four new-concept modular labeling machines for the beer industry, sold in Spain. SACMI maintained its global technological leadership, as highlighted by key orders from international customers in the Soft Drinks segment. 70

Beverage plants and machines PET. Despite smaller volumes compared to 2021, Africa and the Middle East remain the main markets for the sale of complete plants. However, growth was also strong on European and Asian markets, the latter the result of a new, more effective sales set-up. Overall, 2022 saw strong investment on all markets, yielding gains with both new and long-standing customers. BIB and FFS. The Bag-In-Box sector experienced a relative slump, except in the wine segment where a complete line was successfully installed and started up in Germany. Promotion of the FFS (form-fill-seal) in its aseptic configuration continued. Its software was also upgraded, with positive results including, following a major order in Japan, further sales success in Vietnam, China and the United States.

Customer service The aftermarket business produced excellent results; portfolio development work is now yielding gains with the sale of new maintenance packages.

SACMI

Customer service was also bolstered by the establishment of the new Packaging Center. Among other things, this led to a substantial increase in mold sales - partly as a result of developments in packaging - and a strengthening of intra-Business Unit synergies.

Beverage

Looking to 2023, after-sales services are likely to play a sizable role in the continued growth and development of the Business as they augment customer loyalty and are highly profitable in their own right.

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Integrated Annual Report 2022

The main technological innovations New customer services are playing a pivotal role with innovative maintenance plans and the establishment of the Packaging Center. In-Group computer vision/integrated digital services synergies going from strength to strength. Labelling. The year 2022 saw development and testing of the Quadblock and the successful presentation of the new beer labeling machine at the Drinktec international fair. The introduction of new machines for beer and spirits proved successful, resulting in high order levels.

PET. Development of integrated solutions - designed around the COMBO, the ‘heart’ of the line - continued apace. 2022 also saw the launch of the Full Electronic Capper (FEC) - featuring capping heads with brushless motors - and the new CCS cap feeder. Market feedback has so far been excellent, with several projects completed/in progress with leading customers. New preform orientation and feed technologies were also explored. As part of a drive to widen the product portfolio for large format lines, a prototype neck handle applicator for large bottles was designed and built (this was subsequently purchased by a customer). The year also saw the launch of a suitably modified stretch-blow molding machine for the 1-gallon format (with two sales already finalized in the USA). Customer service. A newly developed VOC (voice of the customers) approach focuses on listening to customers and analyzing feedback (e.g. to measure perceived levels of satisfaction). This has set the stage for the launch of advanced assistance, as exemplified by the new maintenance plans. In parallel, a new Packaging Center (complete preform-product development) was established and promoted, in collaboration with the Imola-based Rigid Packaging Laboratory. Computer Vision Systems. In-Group synergies remained strong, resulting in direct integration of cap, preform and label vision systems on the machines themselves. These increasingly sophisticated systems make extensive use of AI. Integrated digital services. Investment in integrated digital services continues apace. ‘Core’ machines (e.g. COMBO) are now fully equipped for real-time harvesting of operating parameter data: once processed, this data can be transferred to the Cloud to implement new proactive-predictive assistance services.

SACMI

Beverage

Impact on sustainability With an eye toward the circular economy, projects targeting the replacement of traditional materials with easier-to-recycle ones continue apace. New connectivity and IoT services offer advantages in terms of both economic and environmental sustainability. Glass and returnable PET. As in 2021, the Business continued to develop special washable glues for Roll Fed applications and wraparound labels that use a minimal number of hot-glue spots, in synergy with the cutting system. Energy saving. A new compact oven, which reduces consumption by up to 20% compared to previous models, is now at an advanced stage of experimentation. 73

3Rs approach. • To reduce plastic consumption, the Business continued to invest in machines capable of processing ever-lighter caps and preforms. • Following this same logic, a new PET yoghurt pot was co-developed with the Rigid Packaging Lab: these pots are made using compression-blow molding instead of traditional thermoforming. The project is a significant one as it replaces materials with others that are easier to recycle (PET instead of PS) and employs unique technology (compression). The higher cost of PET raw material could be more than offset by the environmental benefits (better recyclability, less process waste). • ‘From BIB to PIB’: on the Bag-In-Box front, one of the latest developments consists of replacing the traditional non-recyclable ‘bag’ with a super-light PET bottle (approx. 50 grams for 12 liters). Compared to traditional packaging, this has clear advantages in terms of sustainability (e.g. in bottled water packaging). The solution is already technologically viable and assessment of potential market interest is under way. Connectivity and IoT. The progressive implementation of such functions on machines ensures greater plant availability. It also optimizes spare parts management, reduces use of consumables and requires fewer interventions on the line, making operations more sustainable, both economically and environmentally. These challenges also involve mprograms designed to improve the quality of human capital, such as ‘self-drive’ solutions to streamline the running of machines in plants that are increasingly complex.

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SACMI

Wine

Wine Projects continue to grow in size and number, allowing for smoother order planning over the entire year. Tanks are now very much at the center of the range, with markets showing keen interest in the new ceramic models.

Following its acquisition by the SACMI Group, the year saw Defranceschi post, for the first time since the post-pandemic upturn, a significant profit: a result in which the numerous patents also played a key role. In general, growth in terms of both customer type (Frescobaldi and La Sansonina – Zenato Group, to name just a few here in Italy) and project size have resulted in work being less seasonal. This means the company is now able to plan work more steadily over the entire year, with consequent improvements to efficiency, profitability and fiscal year results. Noteworthy projects in 2022 included the order for Krug, to be completed this coming spring: exceptional results and high levels of customer satisfaction are anticipated. In keeping with this trend, in 2023-24 work will begin on several major projects, with multi-year positive effects on the income statement. In the tanks segment - the core of the Defranceschi range - 2022 saw customers place several large orders for ‘dual material’ solutions in cement and pigmented steel. Two key contracts for the purchase of some thirty tanks, were signed: these will be shipped to France and Spain. These orders (respectively for the storage of gin and olive oil) confirm the solution’s appeal in segments contiguous to wine. This attractiveness stems from the intrinsic advantages of the tank design: from styling plus-points (pigmented steel) to technical benefits such as the flexible temperature control offered by the coil embedded in the cement. To develop the latter, Defranceschi also worked in close collaboration with the leading producer of cement tanks, helping drive forward technical developments in this specific segment. Ceramic tanks exited the prototyping phase in 2021. In 2022 the first 32-hectoliter tank was delivered to a major winery in Piedmont. This is expected to be operational in time for the 2023 harvest.

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Integrated Annual Report 2022

As highlighted above, the advent of increasingly large-scale projects has allowed Defranceschi to spread work/job order planning more evenly over the entire year, with tanks being the driver for a broader range of technologies that find employment in every area, from the vineyard to the complete winery.

(to be delivered in 2024-25).

HP (high pressure) presses, which have undergone further technological development, are a case in point: the first order was placed in Portugal by Taylor's Port, a premium customer that will be crucial to promoting the solution throughout 2023 and winning further orders in 2024. As a result, the visibility of the Defranceschi brand among high-end customers is also growing, with several projects already in the pipeline for 2023

Synergies with the Beverage area remain important: key examples include Bag-In-Box wine packaging solutions (e.g. in Germany, where a first line has already been installed and capacity doubled) and orders placed by Italian customers (e.g. Caviro and Cavit) for FLEXI Kube labeling machines.

Vertical twin-compartment, multi-cell tanks with layered domes, smoothly integrated with Defranceschi-patented architectural elements, continue to play a prominent role, opening the way for the rest of the range.

SACMI

Wine

The main technological innovations Exclusive Defranceschi solutions are contributing to a growing patent portfolio. Ceramic tanks, which passed the prototyping phase in 2021, now set for success. In addition to consolidating and developing its product range, Defranceschi has ploughed part of its cash flow back into the purchase of next-gen machinery, such as a cooling jacket spot welder (these welding tasks previously had to be outsourced) and a new polishing machine, scheduled for delivery towards the end of 2023. 77

Impact on sustainability Defranceschi’s application of ‘stratified’ design on complete winery projects reduces wash water requirements and optimizes recovery. Ceramic tanks are gaining an ever-firmer foothold. In addition to technical advantages - micro-oxygenation, controlled porosity - this design extends the tank lifespan. It does so by allowing, if necessary, intervention on individual worn plates, without having to replace/dispose of the entire tank. It should also be noted that the latest series of stainless-steel presses with mirror-finish cylinder reduce press-cleaning water requirements. On the complete winery front, ‘stratified’ design allows for much more efficient use of water resources. In practice, the entire 3D winery can be washed as if it were a 2D floor, which also allows for the implementation of a water recycling system. The Defranceschi washing bay features a water recovery and purification system, which means the same water can be used for multiple washes or to perform leak tests.

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SACMI

1.6

Packaging & Chocolate

Record orders. A positive market reaction to developments in the packaging range and the latest generation of wrapping machines with fully electronic control.

With record orders, the Business not only continued the positive trend of 2021 but improved on it by more than 30% (and by over 40% in the packaging area). Despite inflation, supply chain issues and the geopolitical crisis, the market nevertheless remains favorable. Against this backdrop, the Business has successfully seized new opportunities by expanding the product portfolio in response to market demand. In the packaging area, the development of the JT Advance flowpack machine was received positively, with the machine setting the standard on markets that demand high performance and cutting-edge functions. Analogously, the new generation of wrapping machines aroused considerable interest: the HTB, the new chocolate bar wrapping machine with all-electronic control presented towards the end of the year has already give rise to several sales. Secondary packaging performed extremely well (+70%) as the market continued to reward the range, with several sales being made in segments outside the traditional core business of chocolate and confectionery. On the chocolate mass preparation front, 2022 saw, thanks to the sale of numerous complete lines in past years, additions to existing lines and the sale of machines to new customers. Refiner sales set new records, thanks also to the latest technological developments on the new HFT. 2022 saw the sale of increasingly complex chocolate molding systems, reaffirming Packaging & Chocolate’s market leadership. These job orders also acted as a catalyst for sales in other areas of the Business. In terms of markets, 2022 was a record year for Italy, the result of both the long-standing partnership between SACMI Packaging & Chocolate and a

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Integrated Annual Report 2022

-22

ton/CO2 eq

thanks to next-gen electric motors

borem est ium eatius et apelibu adis pratent borem est ium eatiussciducia et enisque apelibu sciducia adisdolupta pratent tibeate velenecte enisque dolupta tibeatevolo volecte magname velenecte volo volecte magname

SACMI

major multinational player in the industry and numerous sales to other customers. North America, where the US branch is putting down ever-deeper roots and honing its ability to provide ever-better quality of customer service, continues to enjoy gains. In percentage terms, the market with the highest growth is India. Sales performance in this country has been exceptional and we continue to strengthen local technical facilities. Here, the Business succeeded in expanding outwards from the established area of chocolate molding systems to supply complete plants featuring the entire product range. The year also saw a recovery on South American markets, the main driver being Brazil. Although Eastern Europe was inevitably affected by the war in Ukraine, the consolidated assistance and after-sales facilities provided by our Polish branch produced moderate sales results while keeping customer service levels high. Remaining in Europe, there were encouraging developments in the DACH area (Germany, Austria, Switzerland), especially in the packaging sector: in this case the upward trend stemmed from both expansion of the range and a more finely-targeted market presence. This underscores the soundness of a decision, made several years ago, to strengthen skills, personnel, facilities and the capacity to penetrate this strategically important area.

Packaging & Chocolate

Looking to 2023, the year began with an order portfolio in line with the record levels of 2022. In the coming year there will be close monitoring of any market disturbances stemming from recent problems pertaining to longer delivery lead times and electronic component procurement issues. Such problems, while yet to be resolved, do seem to be relaxing their grip. The company aims to address these challenges through meticulous coordination of its offices and branches and by continuing to invest, as it did in 2022, in the development of new technologies and products. The year 2023 will see a sharp focus on the industry’s most important trade fair, Interpack, which returns after a 6-year hiatus: the Business will be there in force to showcase all the latest it has to offer. 81

With regard to Services, of vital importance on more mature markets, 2022 saw good growth in the sale of spare parts. In order to respond to the needs of increasingly demanding customers and deliver assistance to those parts of the world where technical services are still limited, investments to bolster the relative facilities continue apace. In terms of scenarios, 2022 saw SACMI Packaging & Chocolate face the dual problems of higher raw material/component costs and a lengthening of procurement times. The company responded promptly to these issues by reviewing some internal processes to uphold both the sustainability of the Business and an adequate level of customer service.

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Integrated Annual Report 2022

The main technological innovations Key innovations during 2022 included the launch of a new generation of wrapping machines with fully electronic control, with the new HTB immediately proving popular thanks to: • higher wrapping speeds • gentle product handling and consistent wrap quality • easy, versatile format changeovers. Investment in a new generation of machines with improved HMIs, better performance measurement and more accurate diagnostics continued throughout the year. Able to be used both on-site and remotely, these machines incorporate elements of predictive maintenance, allowing: • in-cloud machine monitoring • implementation of new energy efficiency features. 82

In order to respond to our customers’ need to improve the quality of work, efforts also focused on automation/user-friendliness. More specifically: • automated format changeovers (secondary packaging) • mold changes with robots (molding). The Division's ability to propose multi-business solutions is particularly appreciated on some markets. In such cases, SACMI Packaging & Chocolate is far more than a mere machine supplier. It is an all-round technology partner, providing comprehensive consultancy - from idea to project to product - and all the technology needed put plans into action. To ensure it retains those capacities, 2022 also saw: • full inclusion in the CRM of the impressive sales history of Carle&Montanari and OPM over the years, the goal being to streamline management of the installed machine pool and related assistance services, now managed through ticketing • in-depth training sessions for customers and internal staff, especially the network of subsidiaries linked to Packaging&Chocolate. • the drawing up of new preventive maintenance packages as part of a more proactive, market-oriented approach to after-sales.

SACMI

Packaging & Chocolate

Impact on sustainability Packaging. Developments on eco-sustainable materials continued in the traditional wrapping and flowpack fields and, of course, in secondary packaging. To achieve this the company worked alongside key manufacturers of ‘alternative’ and innovative materials, which are then tested on the machines. More specifically, validation and testing are performed at the parent company's Research Center in Imola where the SACMI Lab tests wrapping materials using state-of-the-art instruments. The company also makes use of labs in Neuhausen and Alba (for flow-wrapping solutions) and Castel San Pietro Terme (for traditional wrapping solutions). These are used to test the ‘technological reaction’ of the machines, that is, their ability to handle the materials effectively and complete the required packaging tasks. Digitalization/automation. With support from the SACMI Digital HUB, a plan to digitalize specific machine functions was launched. In addition to streamlining the man-plant interface, this will have a positive impact on quality of operation, on the data that can be harvested to achieve more efficient process control, and on machine and/or plant efficiency from an energy perspective. Framed as an enabling technology that relieves workers of the most tiring and repetitive tasks – or those with an impact, albeit relatively low, on safety – plant automation plays, alongside digitalization of the various phases, a key role in modernizing workers’ roles: this is done by assigning them system governance and control tasks, making management and, therefore, the process more efficient and freeing up resources for the innovation and development of new products.

Processing. In the ‘chocolate factory’, the bulk of the energy goes into producing the actual chocolate. Hence SACMI Packaging&Chocolate’s close collaboration with the main electric motor manufacturers to develop solutions that substantially lower consumption and, therefore, CO2 equivalent emissions during processing. Taking, for example, a typical conching cycle for a high-quality dark chocolate, produced in a high-output factory, we’ve demonstrated that installing latest-generation electric motors can cut consumption by up to 4% and, in parallel, cut yearly CO2 emissions by 22 tons. These figures refer to a project SACMI Packaging&Chocolate developed for one of the industry’s top producers, results that can be replicated in other settings where processing accounts for most of the energy consumption.

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SACMI

1.7

Logistic Engineering & Forwarding

Markets look to Italiansped to obtain expert management of outsize loads and coordinated door-to-door intermodal shipments. To handle growing complexities, the company is forging ahead with further digitalization of shipments and tracking.

In 2022 Italiansped took advantage of a surging market to post an exceptional result, bettering the already-excellent 2021 figure by 33%. This outcome stemmed from growth in handled volumes and high maritime freight charter fees, the combination of which hugely multiplied the pre-2021 figures, especially in the first half of the year. More specifically, Euro-American routes remained extremely burdensome for end users throughout the year, contributing significantly to the result. However, the second half of the year saw a clear reversal of the trend in tariffs, beginning with Sino-European routes. That downward trend has since evolved into a collapse, bringing the market back to pre-Covid values. The spread of these lower fees to other routes, together with a redefining of WTI crude oil prices, suggests a generalized slowdown in trade. The approximately 50-50 split between shipping services supplied to SACMI companies and those provided to third party customers remained unaltered in 2022. This demonstrates how the outstanding quality of Italiansped services continues to win market approval both at peak trading times and despite all the organizational-management glitches that stem from, on the one hand, the Russian-Ukrainian war, and, on the other, the aftermath of the global pandemic.. Italiansped has a solid market reputation on account of its undisputed expertise in managing oversize loads and an ability to coordinate door-to-door intermodal shipments optimally. The latter are particularly complex as they involve multiple carriers, typically by sea and land, and require the procurement of a large number of means of transportation within narrow time frames; dynamic, punctual and sometimes ‘creative’ administration of cross-border road routes is also required, a crucial area that involves, for example, many traditional transalpine routes. Management of human capital remained a key focal point throughout 2022

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Integrated Annual Report 2022

as the company sought to cope with intense workloads and difficulties in sourcing personnel. Looking ahead, and despite a sudden drop in freight prices in the second half of the year, the order books of the parent company SACMI Imola are encouragingly full: this allows us to look to 2023 with moderate optimism, as the key financial indicators point towards continuation of a

good balance regardless of the sales dynamics. High levels of customer loyalty among the main non-Group partners (e.g. in the fashion-cosmetics, automatic machinery, earthmoving machinery, air conditioner and industrial filter sectors) should also be noted.

The main technological innovations Faced with a huge spike in demand and increasingly complex management, Italiansped set its sights on maintaining outstanding levels of efficiency and quality of service. During the year this led to a series of projects (some of which have already been implemented, other to come online at a later date) that target the ever-wider digitalization of shipping and tracking processes. • Development of RPA (Robot Process Automation) to minimize manual/repetitive tasks. In a shipping management context, this essentially means adopting systems that avoid duplication of data entry. These technologies are also used to manage digital signatures in the goods export field. • Process fieldware. These are IT functions that automatically log every single ‘physical’ task (e.g. package handling, load picking) on the SAP computer system. In this case, it is the physical task itself that creates/records the data. By ensuring workers always have real-time access to , all process checklists, this approach streamlines management and control of complex processes. • Use of federative systems to track goods. The need for such systems stems from the fact that each shipment typically involves multiple nodes and/or

SACMI

Logistic Engineering & Forwarding

•

carriers (customs, shipping companies, etc.), each with its own IT system. Since carriers themselves often make changes to these systems, it’s vital to have software capable of ‘reading’ them and ‘understanding’ changes in real time in order to update the tracking accordingly. This is why Italiansped has begun using a tracking dashboard that relies on a federated IT architecture: the goal is to extend its use to every ‘node’ possible (customs, sea and land, the latter only partially on account of privacy issues). New laser pointer system to aid workers in semi-automatic warehouses. The pointer guides the workers as they pick the goods in the boxes, saving time and preventing errors.

Impact on sustainability Advanced software to optimize container loads, greater implementation of paperless solutions. Research into container ‘load optimizers’ that use the ‘solid equivalent’ method. Optimized container loading lowers economic and environmental costs, minimizing emissions per unit of load.

More generally, Italiansped has sought to go paperless wherever possible (i.e. in just about every area, except certain customs procedures) and accurately assess sub-contracting chains to maximize sustainability.

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SACMI

1.8

Renewable Energy Management

Projects are growing in number and quality, and now involve ceramic companies on a massive scale. Orders from outside the industry are also on the rise.

In 2022, the business volumes of Protesa’s Renewable Energy Management Division were triple those of 2021, accounting for 60% of the company's growing revenues. Revenues generated by services, instead, remained stable at around 8 million euro. This trend is set to continue into 2023, accentuating Protesa's involvement in the design, installation and management of photovoltaic systems. The soaring cost of energy from traditional sources (mains electricity, gas) saw a sharp rise in the number of projects in 2022, many involving, for the first time, ceramic companies. Completion of the first solar panel roofing project, successfully installed by one of the ceramic industry’s leading players, has made Protesa the go-to solutions provider for similar companies. In addition to the third system inaugurated by Florim, the year also saw further projects with Iris Ceramiche, Graniti Fiandre, Italcer and Novabell. At the time of going to press in 2023, other projects at Goldart, Ceramica Sant'Agostino, Antica Ceramica Rubiera and others were under way. These projects for the ceramic sector - which generally involve capacities of around 3-5 MW - were accompanied by major orders in non-ceramic industries, such as the large-scale rooftop solar panel system that powers the plant owned by SPAL Automotive, a leading electric fan manufacturer based in Correggio, Italy (7 MW, 79,000 m2 of roofing). The D4P area also played a key role in expanding the range by implementing new 3D mapping services, useful for refining projects and estimates. Moreover, the D4P area continued to provide its now-indispensable support to SACMI’s Communication and Marketing Area (machine rendering, plant simulations using virtual reality etc.), as demonstrated at the international Tecna fair held in Rimini. Note also the continuation of some key partnerships in other

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Integrated Annual Report 2022

sectors, such as those with Lamborghini and Alphatauri. Remaining within the spheres of D4P, simulation and reverse engineering, 2022 saw the Division continue to provide close support to the Beverage business (especially with the launch of the new SACMI Packaging Center for cap-preform development) and other SACMI Businesses (metal, sintered). On the engineering front there was continued support for various SACMI businesses, one of the most noteworthy 2022 projects being the engineering and prototyping of cellulose-based packaging (caps, containers, molds) for the SACMI Rigid Packaging Division. Following completion of mold development work, Protesa now aims to prototype a complete 90

200 17MW

photovoltaic systems

of installed power in 2022 alone, equal to 10,800 fewer tons of CO2 released into the atmosphere each year.

The chapter refers to the entire SACMI Global Network.

line, from raw material feed systems to water-repellent treatment, from mold to finished product. This explains the ongoing expansion of the facility, including the purchase of an adjacent warehouse; the latter will then be fully equipped to allow development of the project as early as the second half of 2023. Engineering work to deliver the market’s first solution for the manufacture of cellulose fiber caps and jars also depends on teamwork with universities and has already resulted in the finalization of several patent applications this year. In addition to further impressive volume growth in the REM (Renewable Energy Management) area, 2023 will also see a strengthening of Protesa's role as a SACMI service company, the aim being to extend ISO 9000 certification to the various Group companies.

SACMI

Renewable Energy Management

The main technological innovations Protesa has launched a REM feasibility study that will allow it to handle authorization procedures for ground-based photovoltaic systems, which are generally much larger and more powerful than the classic rooftop solutions that require only simplified approval protocols. This will allow Protesa to take care of all system engineering aspects, from both a technological and bureaucratic perspective (from urban planning to licensing paperwork, provision of services, etc. to final authorization). These procedures have a medium-long timeframe (on average, authorization takes 2 years) and expertise in them is set to make Protesa both a leading provider of authorization services and a leading direct installer of systems (of any size up to 15-20 MW). To achieve this, Protesa has put together a skilled interdisciplinary team. Three 25 MW plants have already been authorized by Protesa, system installation and management included, with the authorization-only total standing at 300 MW. Moreover, Protesa’s range of renewable energy source plant design services also includes distinctive factors such as: •

•

advanced software for 3D mapping and surveying with drones (dot clouds, parametric analysis). This is useful when putting together projects and estimates and is of high added value to Protesa customers enhancement of in-Cloud services together with IPREL. The goal is to implement sophisticated monitoring and predictive maintenance services on the over 200 plants managed at this time, most of which are in Emilia-Romagna.

In the testing field, the LAT 17025 certification process for the Measurement Laboratory (laser technology) has begun. This is expected to be finalized by 2023, making the Protesa Lab one of only two facilities in Italy with such certification.

Impact on sustainability 200 photovoltaic systems designed, delivered and managed (mainly in Emilia-Romagna) 17 MW of installed power in 2022 alone, equal to 10,800 fewer tons of CO2 released into the atmosphere each year 35 MW planned for 2023 (direct production), a total of 300 MW authorized Advanced in-Cloud monitoring and management of plants à proactive maintenance

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Responsible governance and value creation

Integrated Annual Report 2022

2.1

Governance and organization

The SACMI Group consists of over 70 manufacturing, distribution and service companies in 27 countries worldwide. The parent company, SACMI Imola, is a cooperative company managed according to the principles of cooperative democracy and the active participation of members. Its organizational model is founded on the involvement of members, management and employees in the decision-making process.

Efficient management and organizational innovation are SACMI Group hallmarks. In keeping with its cooperative spirit it has, over the years, adapted its governance and corporate organization models to meet the new challenges posed by global markets. In April 2022, the SACMI Imola Board of Directors updated the new Corporate Governance document. Consisting of various BoD and general management roles, the governance model establishes a Sustainability Board. Headed by the Board of Directors, its goals are to: •

•

encourage dialogue on developmental trends and sustainability issues so that executive plans can be drawn up define strategic lines by identifying areas that should be the focus of growth and/or sustainability development policies

•

approve the Group Strategic Plan on the basis of the thus-defined strategic lines.

The Sustainability Board has several components: general management, finance, human resources, assets, plant management, communication service and EHS (Environment, Health, Safety). This model has been developed for several reasons. These include the need to extend the scope, quantity and quality of SACMI’s financial, social and environmental sustainability indicators (parent company, then other Italian and foreign companies) and make such aspects more strategic in terms of the focus and management of financial decisions. Measuring and certifying environmental performance according to internationally recognized criteria and standards is a key SACMI goal. Within this new organizational architecture, the Sustainability Board works alongside the Advisory Board

SACMI

Governance and organization

and Strategic Management Board to help define and implement strategic guidelines and plans. These deliberations are then carried forward to operational level through further bodies involved in General Management. More specifically, the Strategic Business Board has the task of expressing Group strategy as Business Unit strategies by monitoring the development of markets and opportunities. Managers on this Board are supported by the heads of the key corporate bodies and the Board of Directors itself. Note that the model now adopts the concept by which the Strategic Business Board is open to suggestions concerning method, experience and knowledge from independent subjects, even outside the Organization. In terms of development and investment opportunities, the model also adopts the Corporate Business Review Meeting. Involving General Management, BU heads and other managerial bodies, its aims include drawing up proposals for changing the way the various businesses are organized, assessment of development projects, management monitoring and the drawing up of budgets. At operational level, the model also incorporates developments actualized in previous years. On the one hand, this aims to enhance the visibility and strength of corporate components relating to core businesses and, on the other, identify new areas with high development and growth potential.

Goals during the year included extending the reporting and measuring of sustainability performance to all Italian companies in the SACMI Group and then to the entire Global Network. To do this, resources were selected for each individual Legal Entity and given the task of handling sustainability-related data collection and reporting. An interdisciplinary ‘Corporate Green Team’ was created in cooperation with the Board of Imola and the management of the various entities. With respect to Merge&Acquisition policy, note that the complete takeover of BMR Spa, based in Scandiano (Re, Italy), was finalized at the start of 2023. This operation completes what was begun in 2019, when SACMI acquired a 20% share in the company, initiating its integration into Tiles. In the Global Network, 2022 saw SACMI inaugurate its new headquarters in Bozüyük, in the heart of a major ceramic district in Turkey. Moreover, to mark the anniversaries of SACMI Iberica and SACMI de Mexico, new customer services were presented. Note also the expansion of SACMI Engineering's activities in India. These include a new area dedicated to services in the rigid packaging sector and the inauguration of a new assistance center in Rio Claro, Brazil which is, again, designed to take SACMI service into the heart of the local manufacturing district. In 2023 we can also look forward to the inauguration of the new SACMI headquarters in Nigeria, part of a wider growth plan involving local facilities for the African market.

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Integrated Annual Report 2022

2.2

Governing bodies

SACMI Group governance is structured with the following corporate governance, management and control bodies

Members’ Assembly: the Parent Company's Members’ Assembly is a collective body in which corporate will is formed and expressed before being implemented by the Board of Directors. Parent Company’s Board of Directors: the SACMI Imola Board of Directors has the crucial role of guiding and governing the Group. It is granted the widest powers concerning both routine and special management of SACMI Imola. In particular, the Board is granted full powers to implement and achieve corporate purposes, excepting those reserved for the Members' Assembly by law or by the Articles of Association. General Group Management: has the role of coordinating and strategically aligning the businesses. Focuses on corporate development through coordination of the Businesses; evaluates new projects and opportunities and puts them to the Board of Directors in keeping with strategic guidelines issued by the BoD.

General Managers of Business Units: responsible for their specific business, involving, also indirectly, Group companies that fall within the various BUs; they develop plans, pursue their implementation and ensure achievement of goals assigned by General Management, all in compliance with company policies/strategies and the autonomy of individual legal entities. Group staff: corporate entities across the various businesses act in their respective sectors to regulate and harmonize the activities of individual businesses with policies defined by the Parent Company; they provide support to achieve goals. Committees: bodies that engage in strategic discussions and consultancy, leading to the development of projects by specific entities.

SACMI

Governing bodies

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Integrated Annual Report 2022

Board of Directors

Advisory board

Strategic management board

Sustainability board

Board of directors' staff

General Manager 98

Corporate business review meeting

Strategic business board

General manager's staff

Tiles

Whiteware

Advanced materials

Rigid packaging

Beverage

SACMI

Governing bodies

Advisory Board: coordinated by the SACMI Imola Board of Directors. Has the purpose of providing information and different perspectives at strategic level, providing examples and making suggestions, encouraging discussion on trends and innovation issues. Also has the purpose of encouraging reflection on: selected business models, direction of growth, lines of development/change, the resources and skills needed to compete successfully in the future. Strategic Management Board: coordinated by the SACMI Imola Board of Directors. Responsible for putting forward proposals concerning Group strategy; develops the strategic plan and relative Group business plan to be submitted to the Board of Directors and the Members’ Assembly for assessment and approval; puts forward proposals to modify the framework of the businesses and resource allocation criteria; evaluates development projects and investment opportunities at Group and Business Unit level; draws up the Group budget to be submitted to the BoD and the Members' Assembly for assessment and approval; monitors management performance at Group level.

Strategic Business Board: responds to General Group Management. Responsible for developing the strategic plan and the relative Business Unit plan; proposes business set-up modifications and changes to criteria for allocating resources within the BU; assesses development projects and investment opportunities; draws up the budget; monitors management performance at Business Unit level. Sustainability Board: headed by the Parent Company's Board of Directors with the participation of various corporate bodies: general management, finance, human resources, assets, plant management, communication service and QSA (Quality, Safety, Corporate Environment), with the latter acting as service coordinator; its purpose is to encourage discussions on trends/sustainability issues and generate executive plans; it also defines the direction of strategy, outlining areas where growth and/or sustainability development policies should be concentrated; approves the Group Strategic Plan on the basis of the thus-defined strategic guidelines.

Operations and plants

Integrated logistics management

Packaging & Chocolate

Wine, service, manufacturing

Digital Officer

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Integrated Annual Report 2022

More specifically, the Board of Directors consists of 5 members, of whom 3 are male aged 30 - 50, and 2 are male aged over 50. No members of the Board of Directors belong to vulnerable categories. It is made up as follows: Paolo Mongardi > President Lorenzo Mimmi > Vice-President Giuliano Airoli > Director Andrea Vernocchi > Director Mauro Galeotti > Director The Board of Statutory Auditors has 3 members, all male and aged over 50. It is made up as follows: Claudio Solferini > President Roberto Chiusoli > Auditor Gianfranco Santilli > Auditor

100

SACMI

Governing bodies

Lastly, SACMI Imola SC management is as follows:

DIREZIONE SACMI IMOLA SC SACMI IMOLA SC MANAGEMENT SACMI Group General Manager Tiles Business Unit General Manager

Matteo Federici

Whiteware Business Unit General Manager

Daniele Coralli

Advanced Materials Business Unit General Manager

Stefano Lanzoni

Rigid Packaging Business Unit General Manager

Vezio Bernardi

Beverage Business Unit General Manager

Alessandro Paini

Packaging & Chocolate Business Unit General Manager

Andrea Boggio

CFO - Chief Financial Officer

Giovanni Campolungo

Accounting & Tax Manager

Stefano Foschini

Operations and Plant Manager

Andrea Grandi

Chief Human Resources and Organization Officer

Gianluca Nardone

Assets, Audit and Shareholders Affairs Manager

Enrico Fiori

The Parent Company Board of Directors is nominated by the Members. The Group Companies BoD is nominated by the Parent Company BoD. Each Board of Directors delegates specific powers and responsibilities within the corporate organization in keeping with personnel’s functions and roles, with particular regard to: •

•

Mauro Fenzi

operational mandates relating to management of individual corporate functions that attribute specific powers in certain areas (e.g. sales, purchases, finance, administration, personnel management, etc.) safety mandates pursuant to art. 16 Legislative Decree 81/2008, related to internal safety (to safeguard health and safety in the workplace), product safety (i.e. safety of

101

products manufactured and/or marketed by the company) and safety on external construction sites (i.e. assembly, start-up and technical assistance, including after-sales, carried out at customer sites). This system has been implemented and is operational in all of SACMI's Italian companies and has been partially extended to some foreign companies (e.g. Germany). The above mandates, especially those on safety, require that annual reports on mandate-related functions be sent to the Board of Directors. To prevent/mitigate any conflicts of interest, the SACMI Group has a specific Policy that is applied throughout the Group.

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Integrated Annual Report 2022

2.3

Business integrity and control systems

102

For over fifteen years SACMI Imola has had an independent Internal Auditing team, currently part of Assets, Audit and Shareholders’ Affairs Management, which is, in turn, subordinate to the Board of Directors.

Group companies are provided with Policies, agreed on with General Management and the Board of Directors, which regulate the behavior and elements that are essential to a fair internal auditing system; this system also seeks to ensure observance of the ethical principles and values sustained by the Group. Internal Auditing involves constant monitoring of the internal control procedures and systems implemented by SACMI Imola and other Group companies; the relative findings are passed on to the Board of Directors and General Management. The main goal of monitoring is to safeguard company assets, assess risk, enforce policies and identify/prevent any action or behavior that might be damaging not just in economic terms but also to the reputation and image of the Group and its stakeholders. During 2022, the team performed audits on 13 Group companies. The resulting reports were

sent to the Board of Directors and senior management at the parent company. Findings that stem from Internal Audits may lead to modification or adoption and publication of internal policies on specific topics. Two new Group policies were applied in 2022. The Board of Directors and company management are informed as soon as any Internal Auditing in individual company areas or subsidiaries begins. In addition to informative notes, these bodies receive formalized reports: an ‘alignment’ meeting is periodically scheduled with the Board of Directors and the GM to define any corrective action that might be required. During 2022 the SACMI Group reported no monetary or non-monetary penalties concerning compliance with laws and standards. Moreover, when necessary, Internal Auditing provides Company Management with support to ensure due diligence over exceptional finance transactions.

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Business integrity and control systems

103

Every year, Internal Auditing also analyses the annual reports of numerous suppliers; doing so highlights, among other things, their degree of dependence on SACMI Imola. Competitors are also analyzed to augment corporate competitiveness. During 2022 the accounting data of 145 suppliers and over 50 competitors pertaining to the various Group businesses was gathered and analyzed. In Italy, anti-competitive behavior is regulated by both the Civil Code (Book V, Title IX) and the Competition Code (Law 10/2017), based on European competition law. The mechanisms for monitoring such matters are the same that oversee compliance with Group regulations. Such mechanisms are jointly established with all the control bodies charged with ongoing verification of the company’s business performance. No body is dedicated to the control of this specific topic, which is part of the general system of verifying compliance with laws in the context of corporate business. During 2022, the Group was not involved in any legal action concerning anti-competitive behavior or antitrust violations.

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Integrated Annual Report 2022

Organizational, management and control model as per Italian DHLs 231 Since 2008 SACMI Imola has adopted an Organizational, Management and Control Model in compliance with Italian D. Lgs. (law decree) 231/2001; together with the Code of Ethics, this constitutes a set of rules and procedures to be observed in all areas of company business and concerns both internal and external relations. This Organizational Model aims to prevent offences sanctioned by Law 231 (e.g. corruption, extortion, falsification of accounts, money laundering, violation of workplace health and safety or environmental standards); the Organizational Model also places emphasis on health and safety, to which a specific section is dedicated.

104

To ensure the Model is applied properly the Board of Directors has nominated a Supervision Committee, which reports directly to said Board; this has independent powers of initiative and control and is a collective body whose members include SACMI Imola’s Asset, Audit and Shareholder’s Affairs Manager and an external consultant. It supervises compliance with and application of the Organizational and Management Model. In 2022, five meetings were held during which no issues emerged with regard to the company processes analyzed. The Supervisory Body periodically reports on its activities by way of memos and simultaneously keeps the Board of Statutory Auditors updated via a specific alignment meeting. All employees are informed about D.Lgs. 231/2001 and the relative Organizational Model by way of a newsletter. Moreover, personnel in positions of responsibility have been provided with training in matters pursuant to the relative Law Decree. Given the importance of the issues dealt with in the Decree, 2019 saw the Organizational Model extended to all Italian Group companies in which the Cooperative holds a majority share. During 2020 the Supervision Committee analyzed new offences included within the crimes pursuant to Legislative Decree n. 231/2001, evaluating their probability of being committed in the company and the relative impact on the Model.

On 11/12/2020 the Board of Directors approved the latest version of the Organizational Model.

Human rights policy Observance of personal rights is an integral part of the SACMI governance model. This principle - applied at all SACMI Group production and service sites around the world - is the foundation on which the Organization, Management and Control, model is based and is an integral part of the Code of Ethics. The cornerstone of this approach is rejection of any kind of discrimination at any level. In practical terms, in SACMI this principle means the clear definition and application of workers’ rights, especially with regard to: • the right to privacy, in compliance with the GDPR • continuity and longevity of employment, significant parameters on a par with quality and performance • rejection of all forms of forced labor, with particular attention to child labor. In keeping with the corporate mission, inspired by the principle of inter-generational development (to ensure the company handed to future generations is an even better one), respect for such rights involves defining and applying a structured listening and feedback model that covers multiple areas. A ‘climate survey’ was introduced to obtain feedback from all workers on the perceived quality of their working environments. This investigated aspects such as job satisfaction, training and development, the quality of relationships between colleagues and the quality of relationships with managers; it also looked at workers’ perceived level of safety and their interest in remaining in the company medium-long term (employment longevity principle). More specifically, 2022 saw the survey distributed throughout all departments of SACMI Packaging & Chocolate (about 400 people). The feedback was highly positive, the overall score being 2.74 on a scale of 1 to 4; participation was on a voluntary basis, with about 81% of the sample taking part.

SACMI

To ensure the full participation of those involved in this ‘listening’ scheme, focus groups involving workers and their managers were set up to add qualitative feedback to the survey data and share an action plan that, on the basis of the gathered feedback, highlights: improvement priorities, appropriate timing and action Ultimately, the goal is to make this feedback an integral shared, transparent, measurable part of the way the organization’s sustainable development and workplace quality model is defined. To provide further support, a leadership model inspired by SACMI values was drawn up in 2021; this makes ethical conduct, respect, listening and feedback core elements of the management style the Company seeks to apply at every Group facility. Hence the SACMI Group ACADEMY’s continued collaboration with the Bologna Business School in running the leadership training course. In 2022 this involved about 100 team leaders at every level for a total of 1700 classroom hours. The last aspect of this model - and an integral part of the new business management system sees the introduction of a performance appraisal system. A system that focuses not just on results but also on people’s observance of company values. In a model that aims to achieve full meritocracy, the performance appraisal system provides a foundation for all decisions relating to opportunities for advancement and development within the organization.

Business integrity and control systems

Certification and management systems Customer satisfaction is a key company goal, hence the early adoption, by the parent company SACMI Imola SC, of an ISO 9001 certified Quality System back in 1996. In subsequent years certification was extended to subsidiaries. The commitment to safeguarding the environment, protecting worker health and safety, and compliance with legal requirements has naturally taken us towards attainment of the respective certifications, namely: ISO 14001 in 1999 and ISO 45001 in 2002. SACMI Imola currently has an Integrated Management System that complies with: • UNI EN ISO 9001:2015 - Quality • UNI EN ISO 14001:2015 - Environment • UNI ISO 45001:2018 - Health and Safety 105

The year 2022 saw the creation of a Corporate Quality, Safety, Environment and Sustainability framework in order to increase in-Group awareness and expertise on these issues. At the same time, a Corporate Certification project was launched. This saw the establishment of a multidisciplinary team, coordinated by the Corporate Quality and Process Improvement body, the aim being to obtain UNI EN ISO 9001 Group certification for all Italian sites soon.

Lastly, SACMI is particularly attentive to the issue of forced/child labor, in compliance with principles set out in the UN Blue Print of Human Rights. One might think this principle has nothing to do with the everyday running of an organization like SACMI, whose operations are based in Italy where strict regulations govern all such issues. However, it takes on practical significance, for example, when it comes to proper management of work experience schemes involving students in their final years at the local schools with which the company has ongoing agreements.

The chapter includes the SACMI Group's strategic guidelines and illustrates how the governance bodies of the parent company, SACMI Imola SC, operate.

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Innovation and research

Integrated Annual Report 2022

3.1

108

SACMI Digital Innovation & Automation HUB

The HUB assimilates the Group’s cross-business skills in the digital and automation fields. Its aim is to promote the diffusion of new enabling technologies in all SACMI Businesses.

For some years now, SACMI has maintained its focus on digital innovation: intelligent automation to achieve goals pertaining to efficiency, productivity, quality and sustainability. It strives to achieve these goals with dedicated facilities that operate across the various Businesses. In keeping with changes made to the Group's strategic governance as per the ESG roadmap, the biggest development in 2022 was the establishment of the new Digital Innovation & Automation HUB. This merges all the Group’s key skills/facilities concerning development of the following families of enabling technologies: • • • •

Software development Vision systems Robotics and self-driving vehicles Data analytics and AI

The HUB has been operational since December 2022. Its purpose is to support SACMI Businesses by focusing on digital and automation-related innovation and by fostering the cross-business usability of the main Digital, IoT, Artificial Intelligence, Virtual and Automation solutions. The HUB integrates know-how from various Group companies and facilities, mainly SACMI Innovation Lab, Iprel and the D4P (Digital for Product) department of Protesa and does so in coordination with the Automation offices of the individual SACMI Businesses. Other ‘coordinators’ in this regard include Gaiotto (the SACMI Group’s robotics specialist) and the Vision Systems area; the latter is currently a vertical element of the Rigid Packaging Business yet provides cross-business expertise in the process control and AI fields.

SACMI

SACMI Digital Innovation & Automation HUB

Drivers

Sustainability plays a pivotal role in any modern approach to innovation; alongside automation and digitalization, it has a major role to play in enhancing corporate competitiveness.

The enabling technologies on which the HUB works therefore seek to achieve a dual objective: •

•

Using these technologies to reduce the environmental impact of the machines (especially the consumption of energy, raw materials, etc.) At governance level, using these technologies as a ‘picklock’ to digitalize the company and thus improve internal processes concerning sensitive issues; this may also involve the development of dedicated software/apps.

By definition an across-the-board operation involving the various Businesses, the hub facil-

itates the grounding of digital innovation and automation. It works on specific projects - sometimes in coordination with external partners such as universities and research bodies - and, more generally, on the diffusion of IoT technology both within the company and over the full range of SACMI machines and plants (a strategy that focuses on offering customers digital and automation-related solutions alongside the machines themselves). In practical terms, much of the attention focuses on those aspects of digital innovation that improve systems management from a data-driven perspective (i.e. taking process data as the basis for decisions that are as objective as possible).

The Internet of Things from an ESG perspective Initially developed to help automate processes and thus boost quality and productivity, today’s Internet of Things prioritizes reducing the environmental impact of production processes and seeks to augment broad-spectrum sustainability (i.e. environmental, social and organizational). At hardware level, development is largely driven by automation that uses today’s most widespread industrial standards (Beckoff and B&R). The software field, instead, is much more open and challenging. Here, where large software houses offer in-Cloud data analysis services, the ability of individual companies to develop

software, in whole or in part, and so keep data knowledge and control in-house, is vital. On the practical side, this means assigning the hub some of the functions of an actual software house to develop and test various applications in the field.

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Integrated Annual Report 2022

Main ongoing projects with ESG goals In 2022, the IPREL team and the Innovation Lab Department worked on, among other things, SACMI machine/plant simulations and/or digital twins, the aim being to analyze and improve efficiency in terms of both productivity and potential energy savings.

110

Noteworthy projects included: • • • •

• • •

definition of new IE2 (high efficiency) electric motor standards. optimization of digital twin models for the Tiles line. optimization of layer configuration for picking stations. development of models/software to optimize sanitaryware kiln loads (load optimization and full loads reduce specific consumption). a new production control-tracking system (mainly for the Tiles sector). re-engineering of hw/sw solutions to relocate supply chains (indirect energy savings). ICT-enhancing work for internal document management and the clear display of production progress, allowing for early corrective action to reduce waste and consumption.

For 2023, the IoT project will focus on achieving energy-saving goals on tile kilns and dryers. This involves developing advanced dashboards

that, by correlating finished product quality data, work cycles and machine settings, create specific consumption reports for each product type; the reports also indicate which areas of the process could potentially be adjusted to obtain further efficiencies. The ‘family’ of projects focusing on Artificial Intelligence is also significant. One of the most noteworthy, coordinated with Protesa’s Renewable Energy Management Division, concerns the correct positioning, sizing and installation of photovoltaic systems to optimize their performance and efficiency. The various Digital HUB facilities also contribute to several projects on which SACMI partners with the regional, national and European innovation ‘ecosystem’ (see par. 3.4 for a summary of the main completed and ongoing projects) and with Universities and Research Institutions, Regional and National Competence Centers and Clusters.

SACMI

SACMI Digital Innovation & Automation HUB

IoT training, digital services, automation of internal processes

Established in December 2022, the facility will, in 2023, lend its support to the SACMI Academy, especially as regards IoT Academy training courses, designed to build up interdisciplinary skills and roles and expand the pool of ‘corporate digital skills’.

In terms of developing specific applications and methodologies for the various Businesses, 2023 will see the implementation of two main project groups: •

•

upgrading of in-Cloud digital services (customer service) in order to develop proactive customer assistance services to improve machine efficiency. process automation control on SACMI plants to reduce downtime, improve production and, more generally, implement data measurement systems (monitoring) that allow identification of efficiency-enhancing action.

The switch towards making ‘data-driven’ decisions applies, first and foremost, to the SACMI product range (both installed and new machines), and then the company's internal processes. With regard to the former, monitoring of service performance across the various businesses was

launched and a 5-year roadmap (2023-2027) for the adoption of new systems was established. In parallel, a shared cross-BU methodology was defined to highlight the value of such services when presenting offers to customers. On the internal processes front, 2022 saw the presentation of the SAM (supervise analyze measure) platform, designed to assess the efficiency of such processes, starting from the machine tool department. Current projects and the roadmap itself are based on the decision to have a single opensource technological platform on which the various applications will be implemented. This responds to the initial objective of exploiting the advantages of digitalization and automation in line with the most widespread hw/sw standards, but with the challenge of keeping ‘data’ expertise in-house and using it to achieve the Group's sustainable growth goals.

New applications, new methods and a single technological platform to make data-driven decisions

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111

SACMI

3.2

R&D and Innovation

The Laboratories 113

In addition to the Digital Innovation & Automation HUB, which is a mainstay of SACMI innovation in the digital and automation fields, SACMI's governance of innovation pivots around the Imola Research Center and the various R&D Laboratories within the Business Units.

Coordination between the various technological consultancy, customer support and training facilities is increasingly cohesive. New Decoration Lab, supported by the Emilia-Romagna Region, now fully operational.

The Research Center of Imola Founded in 1989, this facility is the powerhouse of SACMI innovation. With almost 300 highly specialized technicians and researchers, its direct research lends support to customers at every stage of product development, driving the evolution of the ‘innovation ecosystem’ in the company, in the community and in partner companies. The SACMI Research Center is on the National Register of research laboratories drawn up by the Italian Ministry of University and Research. While organized as a set of technological labs and research units within the individual Business Units and Group companies, it also takes on the task (as in the case of the SACMI Innovation Lab) of achieving across-the-board R&D Automation goals for all the Businesses.

SACMI Tiles Lab This Lab engages in cutting-edge aesthetic research on ceramic products in connection with the ongoing development of machines, especially forming

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Integrated Annual Report 2022

and decoration technologies. This places SACMI in a position to offer customers innovative product design services to convert aesthetic needs into high-quality industrial products made with modern sustainable technologies. The Lab is equipped with state-of-the-art instruments and highly qualified technical personnel. It offers customers comprehensive technological facilities (e.g. analysis and characterization of raw materials and body recipes). It provides problem-solving services, on-site assistance, specialist training in the use of SACMI machines and plants, plus product development and market analysis services.

SACMI Innovation Lab

Like the Tiles Laboratory, the SACMI Sanitaryware Laboratory and pilot plant offer a full range of services, from body/glaze formulation to mold-making, all the way to the finished product. More specifically, the Laboratory offers technological support: this consists of comprehensive know-how on raw materials and body recipes and advanced services for sustainability (R&D to optimize water, energy and raw material consumption). This is followed by on-site assistance at the plant start-up, industrialization and testing phases and Digital Product Development services that span from creation of model and mold to industrial testing on the pilot plant.

Operational since 2017 and officially inaugurated in 2019, the SACMI Innovation Lab was established to develop and disseminate 4.0 enabling technologies throughout the company in the vast field of Automation R&D, digital simulation and software development. Co-funded by the Emilia-Romagna tender to attract investment in advanced Industry 4.0 sectors, the Laboratory follows the development of innovative process control systems that seek to improve product quality, efficiency and process sustainability. The Laboratory develops advanced IoT methods and skills that have enormous potential for application in the industrial automation field: much of the focus is on developing design and production ‘cyber-physical systems’ based on opensource platforms. Crucially, the facility - which has, since 2022, been a cornerstone of the new Digital Innovation & Automation HUB - acts as a bridge between public and private research and the wider business ecosystem; projects often start out with TRL (technological readiness level) surveys on the industrial applicability of research results.

SACMI Rigid Packaging-Beverage Lab

SACMI Digital Decoration Lab

This facility engages in research on materials used in rigid packaging (cap, preform, container) production processes. In recent years, the Laboratory has focused on developing ever-lighter, higher-performing caps and containers (lightweighting), guiding customers towards the adoption of new standards and working alongside the main international certifying facilities and bodies (e.g. CETIE).

The Lab is co-funded by the ‘Activity 5.1 Local competitiveness infrastructure development support’ regional tender, part of the Regional Manufacturing Projects Program. By expanding its equipment pool and skills set, it aims to establish a systematic engineering and applied research facility for the digital surface decoration field. The LAB was established in 2021 at the SACMI Tech headquarters in Casalgrande (Reggio Emilia). This is where SACMI concentrates its development of digital decoration technology (primarily for ceramics, but also metal). The focus of the facility, now fully operational, is the new area pilot plant area where SACMI's

SACMI Sanitaryware Lab

114

reducing the environmental impact of packaging by taking a 3Rs (reduce, reuse, recycle) approach.

In 2022, research work - also performed jointly with key academic institutions and industrial associations, - concentrated on new eco-compatible materials (recycled PET, cellulose, ‘hybrid’ plastics), reflecting the global trend towards

SACMI

customers and suppliers of raw materials (pigments, inks, materials) can run tests on materials. Again, the Lab’s mission centers on operating as a link between corporate businesses, suppliers and potential customers. However, it also acts in close connection with the regional

R&D and Innovation

research system to speed up response times and the transfer of innovation to businesses.

115

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Resources, projects, patenting 116

Research and development play a strategic role in a company like SACMI, which invests heavily to ensure customers can count on innovative products and effective services.

The Group remains fully committed to research. Over 4,700 patents now registered, nearly one for each employee.

In 2022, this area continued to play a pivotal role, with over 260 people involved in almost 150 projects of varying scope and size. Projects designed to promote a ‘circular economy’ should be highlighted here. These mainly concern the Rigid Packaging area (with the search for more sustainable, easier-to-recycle materials for containers) and efforts to mitigate climate change. The latter involves the ongoing development of plant engineering solutions for the Tile sector that are designed to reduce CO2 emissions (e.g. replacement of fossil fuels in kilns by investigating hydrogen and electric heating alternatives). Further projects aim to reduce the amount of water used in production processes and allow its complete re-use by way of innovative ultra-filtration systems (Whiteware and Tiles area). SACMI continues to enjoy flourishing partnerships with numerous Italian and European research institutions/universities. It also takes part in projects financed at regional, national and European level. The importance of research and innovation is also evident in the high number of new patent applications: in 2022, 40 inventions were registered by the parent company, SACMI Imola, alone.

SACMI

R&D and Innovation

4,709 patents, including 262 new patent applications registered in 2022 alone

117

R&D – Resources and projects* 2020

2021

2022

Resources allocated to R&D (in thousands of euro)

295

287

266

N. of projects assigned to R&D

114

154

147

N. of man months

1,204

1,192

1,172

N. of man months/projects

10.56

7.74

7.97

2020

2021

2022

Patent applications (overall number)

4,176

4,447

4,709

N. of patent applications filed in the year

123

271

262

Active patents (overall number)

1,935

1,899

2,062

*For the data in the graphs the boundary refers to SACMI Imola

Patents

Patenting costs incurred by SACMI Imola SC in 2022, which included maintenance and consultancy costs for the Business Units, amounted to 3,145,000 euro, up from the 2,740,000 euros incurred in 2021.

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Integrated Annual Report 2022

3.3

Partnerships

Membership associations 118

SACMI plays an active role in several associations to promote the principles of cooperation, a culture of quality and innovation, and sustainability.

International partnerships are increasingly important as they drive forward the sharing of research results and the industrialization of new sustainable processes/ materials.

More specifically, SACMI adheres to Legacoop, Legacoop Produzione e Servizi, ACIMAC (Association of Italian Ceramic Machine and Equipment Constructors), UCIMA (Union of Italian Constructors of Automatic Packaging Machines), AMAPLAST (National Association of Manufacturers of Machines and Molds for Plastic and Rubber), UCIMU-Systems for manufacturing and is a member of ANFIMA (National Association of Manufacturers of Metallic and Related Packaging). Furthermore, SACMI works alongside pan-European and transnational professional associations that seek to promote advanced research and training in their respective industries. SACMI is a member of the Italian Ceramic Society (I.Cer.S.). Founded in 1972, the latter is a key reference point for the worldwide dissemination of Italian ceramic technology and plant engineering know-how. It also adheres to the Brussels-based European Powder Metallurgy Association (EPMA), which unites key players in the European sintered products industry. Participation as a member of the Association Council involves SACMI in the development of further training and research projects, together with leading European universities and research facilities. Since 2019 SACMI has sat on the board of AIM (Italian Association of Science and Macromolecule Technology), a non-profit association that promotes training and development in the polymers and macromolecules field.

SACMI

Once again, this is a key partnership that will involve us in innovative research projects on, for example, new bio-compatible materials and the development of higher-performance, less energy-intensive processes. SACMI advances the dissemination of international standards in the Rigid Packaging field through its membership of CETIE, the international association that promotes, on a voluntary basis, innovation and technical standardization in the sector. SACMI is a partner of Plastic Recyclers Europe. It is also a member of ABMI (Association of Beverage Machine Industries).

Partnerships

Again at European level, SACMI is a partner of A.SPIRE (Sustainable Process Industry through Resource and Energy Efficiency). This public-private cross-sector partnership focuses on innovative management of resources and energy efficiency in manufacturing processes across multiple fields, ceramics included. Together with the European Commission, SPIRE puts forwards research-innovation agendas and finances international research and development projects.

119

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Research consortia 120

Collaborative research, regional and national clusters. SACMI is also a partner of the new ‘Circular and Sustainable Made in Italy’ project, funded by the National Recovery and Resilience Plan (PNRR).

SACMI works with several key research institutes and consortia. These include the Bi-Rex Competence Center of Bologna (Big Data Innovation & Research EXcellence), Mist-ER (Mechatronics, Biomedical and ICT industrial research and technology transfer lab) and the InterMech Mo.Re, CRIT Research Interdepartmental Center (consortium based in Vignola, founded as a vehicle for regional manufacturing excellence to promote collaborative innovation, technological scouting/research and lend support in accessing the best national/EU funding opportunities). SACMI is one of the private founding bodies of the Circular and Sustainable Made in Italy foundation, established in late 2022; the foundation is responsible for implementing and managing the ‘3A Italy’ Extended Partnership, funded as part of the National Recovery and Resilience Plan (PNRR). The Extended Partnership involves private companies, universities and public bodies. It aims to co-finance basic research projects in areas concerning economic, environmental and social sustainability, the circular economy, and the digitalization of materials, products, services, processes, factories and production chains, the main focus being on ‘Made in Italy’ industries. SACMI is an associate of the National Smart Factory Cluster. The latter (which includes companies, business associations, local government bodies, universities and research bodies/institutes) seeks to actuate a research- and innovation-based strategy to sharpen the competitiveness of the Italian manufacturing system. Moreover, since 2021 it has been a member of two new Regional Clusters. These aim to strengthen the ability of the Emilia-Romagna innovation system to engage in collaborative research and technology transfer as defined in the Regional Intelligent Specialization Strategies: CLUST-ER MECH (which seeks to hone competitiveness in the mechatronics and engine sector) and CLUSTER INNOVATE (which focuses on service innovation).

SACMI

Partnerships

Universities and research bodies Over 100 partnerships with universities to develop strategic business projects. Research facilities belonging to the worldwide SACMI company network involved in several joint projects with foreign institutions.

SACMI has about 100 partnerships with universities, institutes and research consortia in Italy and other countries. At university level, SACMI has close research ties with: Alma Mater Studiorum of Bologna (Departments of Civil Engineering, Chemistry, Environment and Materials, Industrial Engineering, Electrical power and Information, CIRI MAM, UNIBO Inter-departmental institute of Industrial research). It also enjoys valuable partnerships with the Università di Modena e Reggio Emilia (UNIMORE) Politecnico di Milano, the Università Cattolica del Sacro Cuore and LIUC, the universities of Parma, Università del Piemonte Orientale, Università Politecnica delle Marche, and the universities of Ferrara, Padua, Trento, Salerno, Cassino, Lecce, Sassari, Palermo, Pavia, Brescia, Università del Salento, Università di Bolzano and Università della Calabria. SACMI works with CNR (National Research Council). More specifically, it partners with CNR ISTEC (technology of ceramic materials) and CNR INO (National Optics Center). It also works with Bologna Ceramic Center, EcamRicert (Vicenza), Iseven Servizi (Modena) which performs microbiological analysis in the plastics-packaging field, SSV (Experimental Glass Station), AlmaPlasma (Unibo spin-off concerning plastic surface treatment), the CRA center (Rome, dairy sector) and the National Agency for New Technologies, Energy and Sustainable Economic Development (ENEA). SACMI also engages with several foreign institutions, such as the German Fraunhofer Institut (structural strength and reliability of systems department), IREQ (steels, large components), KIMW (Kunststoff Institut Lüdenscheid), the University of Wageningen, the Spanish ITC (Instituto de Tecnología Cerámica), the French Université Grenoble Alpes, the University of Magdeburg and Montreal Polytechnic. There are also internal synergies with Alpha Ceramics (a Germany-based Group company operating in the advanced ceramics and new materials sectors) and the Laboratory/Competence Center of German subsidiary Sama Gmbh (tableware).

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121

Integrated Annual Report 2022

3.4

Main ongoing funded projects

122

SACMI is involved in numerous R&D projects, co-organized with national and international partners. More specifically, these projects are co-financed by the Region of Emilia-Romagna, the Ministry of Enterprise and Made in Italy (MIMIT), the Ministry of Universities and Research (MUR) and national Competence Centers. Further projects are supported by the European Commission via the Horizon Europe program.

A key set of crossBusiness Digital Innovation projects sees IoT virtualization generating new opportunities for sustainable plant design and management.

These projects generally run for several years. The most significant to be financed during 2022 include:

Ceramics In the Ceramic sector, SACMI is a partner of the Caliper (Horizon 2020) program to train personnel expert in the experimental and computational techniques needed to develop ‘granular calibration’ technology based on 3D imaging methods; here, SACMI has provided partners with a pilot line at its Ceramic Laboratory, allowing them to perform calibration testing of a DEM calculation model at industrial scale. The Facto project, instead, concerns the development of ‘predictive’ ferrous material corrosion models (e.g. the steel used in hydraulic turbines and indus-

SACMI

Main ongoing funded projects

123

trial machinery) and involves partnerships with four Canadian universities, alongside the Polytechnic University of Milan and the University of Ferrara. The project aims to establish ‘additive manufacturing’ design criteria that maintain component efficiency over time.

vative ‘one-step’ machining techniques for such parts that are faster and more reliable than conventional ones.

SACMI is also an associate of the Tusail project, dedicated to the development, application and validation of ‘upscaling’ methods for particulate systems; this project aims to train highly specialized personnel with interdisciplinary skills (physics, engineering, computer science and mathematics) transferable at cross-sector level both in higher education and industry.

In the Computer Vision Systems Area, SACMI was involved in the IQONIC project (part of the Horizon 2020 program) for the development of electronic 'noses' that detect contaminants on opto-electronic components.

Advanced Materials SACMI took part in the CPM project, part of the MISE-Horizon 2020 PON co-financing scheme, which focuses on the construction of complex gears by compacting metal powders. Project goals include the development of a technique that maximizes density near the sides of the sintered teeth and the refinement of further inno-

Rigid Packaging

Through the ML4VI project, SACMI is helping to develop machine learning techniques for virtual inspection and quality control; here, AI is being used to develop automatic machine learning and deep learning techniques that begin with imaging of the product and measurement of its physical-dimensional characteristics. The technique is designed to be as adaptive as possible to cope with changes in the product family to be inspected. The project is supported by the BiRex competence center and aims to reach level TRL7 (re-applicability of the approach in an ‘unknown’ scenario, a key challenge given the enor-

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Integrated Annual Report 2022

mous potential of such techniques across a vast swath of 4.0 manufacturing fields). FIBER-CAP (part of the MIMIT ‘Agreements for innovation’ tender), instead, focuses on technology for the sustainable dry molding of rigid packaging caps made from 100% recyclable natural fiber. This project aims to overcome current limitations on fiber treatment and dry forming processes. It also centers on functionalization of materials, design and construction of molds/ molding machines (with CCM technology) and their integration into the industrial process.

Digital Innovation

124

SACMI is, together with Bi-Rex, involved in SS4SP, which investigates design-technological solutions to improve plant cybersecurity; this approach is vital to allow the introduction of new services and features while maximizing plant security and resilience. Another ongoing SACMI-led project is Deepmon (Dynamic Edge Computing for Plant Monitoring). This concerns machine data control and management systems on cloud/edge-ready platforms that are more adaptive, scalable and fully controllable as regards the ‘distributed’ configuration of the support and the relative algorithms. Big Data is also the focus of BD4M, which aims to develop methods to analyze and structure the vast quantities of machine-fed data that are beyond the scope of current analytics capacities (especially as regards the heterogeneity of data/ applications and analysis of unstructured data). Further Big Data projects in which SACMI is a partner aim to integrate IoT connectivity via a 5G wireless network and reduce latency times (Seawall project) to effectively virtualize control of parts of the production line. The national MUR (Ministry of University and Research) plan provides, instead, the framework for Ok-Insaid, a further data analytics project for the development of a new collaborative approach between ‘cloud’ and ‘edge’ levels; once

again, the goal is to develop effective models and methods for collecting and structuring industrial data in a way that makes it truly useful (i.e. information applicable at operational level for systems monitoring, remote assistance on machines, etc.). Again in partnership with Bi-Rex, SACMI is working on Flexcobot, a project to develop collaborative robots that can be used on small component manufacturing and assembly systems. Similarly, Ergologico is an applied research project that aims to create a ‘collaborative station’ (man + robot) management and feed system by combining advanced handling (AGV) systems with full automation of picking and feeding. Another Bi-Rex project, AM-MEC, concerns additive manufacturing in mechanical production chains. It aims to define a new model of process integration for the mechanical industry by introducing the concept of design/re-design and techniques to predict any 3D print deformation. Lastly, in the Advanced Logistics field we have the Intrace Indoor Traceability project, an innovative system for tracking and analyzing logistics flows inside factories using cutting-edge sensors and hw/sw solutions. Further cross-business projects in 2022 saw the involvement of Iprel, the Group's manufacturing software house. For example, Iprel works on Scream, a project to develop distributed/ customized analytics to aid decision-making processes on manufacturing machines and infrastructure (iTools development-testing).

SACMI

Main ongoing funded projects

SACMI Tech For SACMI Tech – the company that has, since 2020, merged the facilities and skills of Cmc, Intesa and Nuova Sima – note: The ‘Under control: Made in 4.0’ project. Its aim: to create a new, all-Italian digital control technology based on IoT architectures, the ambition being to set a new plant management standard. Ultimately, the goal is to translate process control into services and standards that are universally applicable to customer companies. Such services and standards aim to be sustainable from both an economic and a technical feasibility perspective and allow for the production of ‘fully customized’ large semi-finished ceramic slabs of variable thickness (3 - 30 mm). Digital Decoration Lab. Following an upgrade/expansion of the facilities and the purchase of instrumentation (completed in 2021), the Lab began operations on the new pilot line, on both tiles (dry and wet digital decoration, next-gen ecological water-based inks) and metal packaging (DMD, digital metal decoration). The goal is to expand the Lab’s role as an international printing and digital decoration research center. In short: a place in which to test new ideas and verify what really works for companies, in synergy with customers, partners, research bodies, technology transfer centers and the other labs already present in SACMI.

125

SACMI Forni & Filter In 2022 SACMI Forni & Filter launched the Amazzonia project to reduce the CO2 emissions that stem from ceramic manufacturing. Its goal: to implement solutions that reduce environmental impact, especially in terms of heat consumption (analysis of technological cycles, new ‘green’ fuels, optimized plants and raw materials, new processing techniques linked to in-depth energy research). More specifically, the project focuses on kilns and dryers, exploring innovative technological solutions and power sources (renewable, electrical) and creating prototypes. Ultimately, the aim is to validate any attainable environmental benefits via LCA (life-cycle assessment).

Gaiotto Gaiotto continued to develop advanced industrial robot programming techniques. Selected as part of the Emilia-Romagna investment attractiveness tender (Italian Regional Law 14/2014), this project aims to build a new generation of robots that are easier to program and capable of moving and even ‘thinking’ like humans, thus extending the number and type of robotic applications the SACMI range provides to the different businesses.

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Open innovation projects 126

2022 completed the SACMI Innovation Lab co-financing phase, part of a tender to attract investment in advanced Industry 4.0 sectors within Emilia-Romagna.

SACMI is a key partner of the regional research ‘ecosystem’. Projects include the development of adaptive production systems, intelligent molds and advanced sensors.

As part of its mission to align the research community more closely with industrial applications from an open innovation perspective, the Lab oversaw various activities in 2022, such as:

University of Bologna Close collaboration saw the launch of a research project to optimize anthropomorphic robot trajectories with the University of Bologna (Department of Electrical Energy and Information Engineering). Then, with the Department of Computer Science and Engineering, the Lab was involved in two doctorates on computer vision and knowledge injection. It also collaborated with ALMA AI (Unibo's AI research institute). SACMI also collaborated with DIFA (Department of Physics and Astronomy) on a project exploring new sensors for the process industry, engaging in two university thesis projects.

InterMech - Mo.Re. With InterMech - Mo.Re, the interdepartmental research center on Advanced Mechanics and Motor Engineering of the University of Modena and Reggio Emilia, the Lab is supporting two industrial doctorates in the user experience design field. In the robotics-intralogistics field, Gaiotto is working on

SACMI

Main ongoing funded projects

a project alongside Tecnopolo di Reggio Emilia - Industria Tecnologica Italiana.

University of Ferrara With the University of Ferrara, the Lab cooperates with the Department of Physics and Earth Sciences (sensors and semiconductors based on nano-structured metal oxides for environmental and industrial applications) and with the Department of Computer and Automation Engineering. Various in-the-field projects with MistER - Smart Innovation are in progress. These include the production of sensors that continuously measure the moisture content of ceramic raw materials and the development of intelligent molds for SACMI machines (especially CCM cap presses) that have predictive diagnostics and anti-counterfeiting functions.

127

Regional clusters With regional Clusters (Clust-Er Mech), SACMI works with the Advanced Materials, Industrial Automation, Big Data & Analytics Departments. in the Smart Factory Cluster, instead, SACMI partners on various projects such as the development of high-efficiency adaptive production systems.

CRIT With CRIT, SACMI does technological scouting and take part in numerous round tables on Automation & Robotics, Advanced Materials, Big Data and other topics.

Bi-Rex In addition to already-completed projects, 2023 will see SACMI continue working with Bi-Rex to establish an internal work group that will, over three years, ascertain the viability of developing projects in several areas of potential interest to SACMI Business Units.

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R&D Automation projects - the 'life cycle thinking' approach 128

Further projects by SACMI Innovation Lab some completed, some in progress - include an interesting set of activities that take a 'life cycle thinking' approach: these aim to expand the sustainability concept within manufacturing from a broader perspective, taking into account the product’s economic-productive impact and, therefore, its environmental and social impact over its entire life cycle.

The main project families are hardware, digital printing, automation software, data analytics and industrial simulation: at their core lie new hw/sw architectures for machine/ robot governance and industrial simulation (digital twin) software.

Underlying these activities is a ‘digital’ approach to defining large datasets in order to define sustainability and incorporate it into products and production processes. The paper ‘Sustainability and Industry 4.0: definition of a set of key performance indicators for manufacturing companies’, published by the University of Modena and Reggio Emilia, highlights some of the projects carried out by the Lab. For 2022 and this current year, the following stand out:

RDAE projects – Embedded Hardware These projects have various aspects: redesign of machine electrical components (microchips) to overcome current issues (longer lead times, price volatility, obsolescence), new APD architecture for deep digital multi-color printing, production of a new spark tester to measure cap integrity (rigid packaging)

SACMI

and the design of a continuous-flow moisture meter for raw materials (tiles) in collaboration with MistER. Further studies on CCM machine molds-tools focus on better control of force, vibration, pressure and temperature parameters and assessment of THz technology (sub-TeraHerz Imaging Unit material scanning).

RDAD Projects – digital printing The Lab continued its enhancement of CRONOs software for the control of graphics on ceramic lines. This included feasibility analysis of ‘on-thefly printing’ algorithms and new highly ‘responsive’ hardware architectures (in collaboration with SACMI Tech).

RDAS Projects – Automation SW Some of the most noteworthy activities in this project family include studies on refactoring of the particle size distribution measurer for ceramic powders (GMS measurer). On the Tiles front, the search continued for more efficient, economical systems to measure slip technological parameters while scouting projects investigated integrated vision systems in automation-robotic environments (e.g. TwinCat Vision, Mapp Vision).

Main ongoing funded projects

RDAS Projects – Industrial simulation In 2022, the LAB continued to develop the plant digital twin (especially the body preparation, powder storage and pressing, warehousing and handling, processing and sorting phases). It also contributed to the complete virtual commissioning ecosystem project (in-the-loop hardware-software development, ML interoperability-automation). Note also the project with BMR on the Leviga and Supershine machines (optimal crossbeam speed calculation for homogeneous surface coverage, satellite head rotation speed modeling), plus quality control-focused technological scouting. 129

RDAS Projects – Data analytics The design of experimental molds for cellulose caps involved investigation of cause-effect relationships between values monitored during forming and any detected defects. A further project concerns the analysis of wear-related data on slitting tools (i-Slit) for tethered applications. On BMR Leviga, process modeling was used to obtain data that extends the utility of the simulator.

RDAS Projects – Robotics

Also deserving of a special mention is the Industrial MLops study on machine learning model life-cycle management methods and technologies in an industrial context, including any edgecloud integration (SACMI Smart Care service).

In robotics, the LAB collaborated in the study and market launch of new off-line programming software for sanitaryware robots (Smart Off Line NG); in a similar context, it also worked on the industrialization of kiln car load optimization software.

Lastly, a study that takes a deep learning approach to metal forming focuses on increasing the predictive power of images by limiting the necessary data set. Further big data projects in partnership with Bi-Rex are ongoing (above all in the IoT/edge-cloud computing area).

The chapter describes the performance of all SACMI Group companies, with the exception of patent-related costs and the data in the ‘R&D resources and projects’ corporate table which refer only to SACMI Imola SC.

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Wealth generated and distributed

Integrated Annual Report 2022

4.1

Wealth generated and distributed by SACMI Imola SC

132

The ‘economic value’ attributed to SACMI's core activities is identified through the calculation of Wealth Generated and Distributed (i.e. the wealth created by the company in carrying out its daily business).

Wealth Distributed is a basic element for assessing the Company's economic and social impact. It also helps evaluate the wealth generated and distributed to certain categories of subjects who have, via their involvement, contributed to producing it and/or count, in any case, among the Organization’s key stakeholders. The Retained Value, instead, represents that part of economic resources retained within the Company for its own sustenance and sustainability over time.

million to -6 million with respect to the previous year.

During 2022 SACMI Imola SC generated revenues of 1.12 billion euros, an increase of 19% compared to the previous year. This amount constitutes the total of all the wealth generated; analogously, items relating to operating costs, personnel, remuneration of capital and in-company investment also increased by an average of 25% compared to 2021. The only exception concerns the item relative to remuneration of public administration, which dropped from 12

The company prepares its financial statements in the form and content laid out in the international accounting standards (IAS/IFRS) issued by the International Accounting Standards Board and approved by the European Union, including all interpretations of the International Financing Reporting Interpretations Committee (IFRIC) and in compliance with the provisions pertaining to art. 9 of Italian Legislative Decree (D. Lgs) 38/2005.

In total, wealth distributed came to 1,060 million euros, 21% higher than in 2021. Lastly, retained wealth was almost 57 million euros, down by 6% compared to the previous year.

Economic performance reporting criteria

SACMI

Wealth generated and distributed by SACMI Imola SC

The Financial Statement up to 31st December 2022 - consisting of the Financial and Asset Situation, Income, Total Income, Cash Flow and Changes in Net Equity statements - is audited by Deloitte & Touche S.p.A. in compliance with art. 14 of Italian D. Lgs. 27.1.2010 n. 39 (art. 2409-ter of the Italian civil code) and art. 15 of law n. 59 of 01/31/1992 on cooperatives. For the purposes of this Report, the data contained in the aforementioned financial statements has been reclassified in the Added Value and Distribution framework in which economic value directly generated and distributed (EVG&D) is determined on the accrual basis in line with the provisions of GRI standard 201-1 of Sustainability Reporting Standards (GRI Standards), issued by the Global Sustainability Standards Board in 2016 and in force since 1st January 2018. Taxes have been calculated with specific reference to legislation governing cooperatives. The Cooperative is subject to the tax regime envisaged for cooperatives other than prevailingly mutual assistance cooperatives. Consequently, the estimate of the tax burden was calculated by tax-relieving 90% of the amount allocated to the legal reserve, equal to 30% of the profit (thus tax-relieving 27% of profit) and 3% of the profit to be allocated to mutual aid funds for the promotion and development of Cooperation.

133

Wealth generated and distributed (euro) 2020

2021

2022

Revenues

683,001,556

941,139,102

1,117,945,696

Total wealth generated

683,001,556

941,139,102

1,117,945,696

Operating costs

502,316,807

735,418,683

883,852,386

Remuneration of personnel

79,994,649

88,945,501

93,978,295

Borrowed and risk capital

36,265,451

40,646,396

69,352,056

Tax

- 6,001,398

12,074,502

10,393,782

Investment in the community

1,818,104

2,355,099

2,541,550

Total wealth distributed

614,393,612

879,440,181

1,060,118,068

Wealth retained by the organization

68,607,943

61,698,921

57,827,628

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Integrated Annual Report 2022

4.2

Approach to taxation

134

With regard to taxation, SACMI acknowledges its responsibilities towards investors, governments, suppliers, employees and the various Italian and foreign communities where it operates.

This approach ensures regulatory and accounting obligations are met in a balanced way. In Italy, SACMI adopts procedures for detecting, measuring, managing and controlling tax risks. Compliance is ensured at all company levels by taking prompt corrective action with respect to any shortcomings and/or issues. The process of determining taxes stems from and begins with a proper, truthful representation of the financial statements in compliance with accounting standards; it continues with identification and monitoring of any changes to tax regulations over time in order to implement proper and timely submission of returns to tax authorities. At international level, SACMI adopts Transfer pricing policies compliant with OSCE guidelines by preparing a master file, a local file and applying country by country reporting. There are no advance pricing agreements (APAs)

nor are there any ongoing Mutual Agreement Procedures (MAP). SACMI also benefits from tax incentives such as R&D credit and Patent box. With regard to the latter, SACMI has concluded an agreement for the five-year period 2015-2019 and is waiting to sign a renewal for the period 2020-2024. To ensure proper management of customs aspects, SACMI has delegated the supervision of export procedures to its subsidiary Italiansped which handles the logistics of all the Group companies. With regard to governance, clear roles and responsibilities in relation to tax risks have been defined within the various sectors of the organization. The Group Tax Manager reports to the Administration Department Manager who, in turn, reports to the CFO and the Board of Directors. SACMI tax policy is based on the utmost collaboration with tax authorities, with which it has no pending disputes. Additionally, while no

SACMI

Approach to taxation

tax control framework is currently in place, the Emilia-Romagna DRE (regional tax office) has always shown itself willing to discuss any relevant issues with the Organization.

Country by country report

2020

2021

2022

Number of employees

1,102

1,117

1,177

Revenues from sales to third parties

549,834,003

724,894,682

903,044,994

Revenues from intragroup transactions with other tax jurisdictions

148,906,356

187,330,254

173,094,726

Profit/loss before taxes

25,064,608

61,455,905

57,754,634 135

For the data in the graphs the boundary refers to SACMI Imola

The chapter refers only to the performance of the parent company, SACMI Imola SC.

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Suppliers

Integrated Annual Report 2022

Suppliers

138

SACMI works with suppliers according to the principles of openness, equity and fairness.

Quality, lasting partnerships, growth and mutual development are the cornerstones of the SACMIsupplier relationship. The upswing in machine and spare part purchases continued throughout 2022. Purchases from local suppliers up by 40%.

Relations with strategic suppliers that produce units or machines made to SACMI specifications rely on a partnership principle based on the mutual enhancement and sharing of know-how. The need to reduce time-to-market has streamlined collaboration and steadily driven optimization in terms of quality and competitiveness. SACMI is provided with a wide range of goods and services by over 2,000 suppliers. More specifically: • raw materials • machine parts or machines made to SACMI specifications • commercially available components or machine parts purchased from catalogue • machines made by suppliers as per their own design • consultancy, investment and other services (transport, logistics, packaging), the latter mostly outsourced and provided internally.

SACMI

Suppliers

Purchase volumes sub-divided by type (up to 31.12.2022) 15%

51%

Third party machines

Services

Raw Materials

Commercially available components

SACMIdesigned machines/ parts

18% 139

Machine and spare part purchasing trends (euro) 245,000,000

272,000,000

315,000,000

2020

2021

2022

350,000,000 300,000,000 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 0

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Integrated Annual Report 2022

Purchase volumes by geographical area (euro) 500,000,000

2020 2021

450,000,000

2022

400,000,000 350,000,000 300,000,000 250,000,000 200,000,000 150,000,000 140

100,000,000 50,000,000 0

2020

2021

2022

Foreign

Italy

Emilia Romagna

Imola

Foreign

57,000,000

Italy

89,000,000

Emilia-Romagna

236,000,000

Imola

84,000,000

Foreign

68,000,000

Italy

160,000,000

Emilia-Romagna

328,000,000

Imola

113,000,000

Foreign

82,000,000

Italy

181,000,000

Emilia-Romagna

491,000,000

Imola

126,000,000

For the data in the graphs the boundary refers to SACMI Imola.

SACMI

Supply chain partnerships Products designed by SACMI differ enormously in terms of their complexity and size and are characterized by specific market positioning in terms of performance/quality/price. Suppliers, identified on the basis of product type, may differ in terms of the technology they use and their size. Nevertheless, they are all organized in such a way as to guarantee quality control, monitoring of the various stages of production and, consequently, cost control and prompt delivery. They share a desire to invest in their company, see it grow and meet the needs of both customers and markets. This approach means SACMI provides the best possible quality while ensuring its products retain their market competitiveness. By way of the same logic, this approach has allowed the Organization to strengthen its international leadership over the years, contributing to the generation of shared value in communities. SACMI has always preferred not to hold shares in suppliers of made-to-specifications parts as it does not wish to alter a balance, built up over the years, that enhances their entrepreneurship; it favors relationships based on transparency and mutual respect for customer-supplier/partner roles. At the same time, the plant engineering sector continues to benefit from a policy of carefully targeted takeovers, sometimes involving long-standing suppliers; this has allowed SACMI to increase its direct oversight capacity in various sectors deemed strategic.

Know-how transfer SACMI has built solid partnerships with many suppliers. They have been selected because they are organized in a way that provides the Group with supporting skills throughout the production process, can apply R&D results rapidly and have effective IT systems. As part of a Supplier Relationship Management program, which aims to speed up the transfer of commercial and technical information, SACMI has developed Business-to-Business IT tools that allow automated mailing of purchase or-

Suppliers

ders, technical drawings and shipping info to key suppliers.

Quality assessment SACMI has personnel who monitor supplier quality to ensure products are consistently of the highest standard, whether made internally or externally. The resulting flexibility has allowed us to meet customer needs in terms of both volumes and observance of delivery times. Suppliers of products made according to SACMI’s specifications are, instead, subject to 4-monthly appraisal (this involves Purchasing, Quality Control and Assembly services). Should findings highlight any issues, corrective action is decided on together with the supplier; should problems persist the supplier is piloted towards a repositioning in terms of product complexity and volume. For plant engineering providers too, greater stability of the supplier pool (both third-party and Group firms) increases the importance of ‘ongoing’ performance monitoring. All SACMI companies or branches that work with suppliers are asked to make appraisals via appropriate indicators such as quality and the level of service. The result is a performance chart that provides an intuitively understandable ‘snapshot’ of the supplier or a relative view via comparison with previous years’ results

Scenarios and trends in 2022 The volume growth that began the previous year continued into 2022. However, there were also growing material procurement difficulties due to disrupted delivery times and a generalized increase in costs. Most additional costs were energy-related and driven by rising inflation (in Italy rates approached 10%). On a global market where almost all the main component manufacturers had established systems designed to let them produce with increasingly small inventories, longer delivery times for many parts has prevented them from keeping pace with rising demand. This situation has created bottlenecks in almost all manufacturing sectors, triggering a ‘domino effect’ of increasing

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142

complexity. However, as we move deeper into 2023 the situation is slowly improving, although some supply issues still persist (e.g. microchip availability remains poor). Another tangible risk encountered in 2022 was excessive dependence on unreliable supplies. To ensure continuity of production, it thus became necessary to establish direct lines of communication with key component makers in order to pilot allocation of the limited available quantities. Where technically possible, alternatives have been approved. Furthermore, SACMI began careful monitoring of strategic mechanical/electrical unit suppliers to ensure fast interception of any issues, including those of a financial nature. Fast-growing volumes, the need to procure material well in advance as a result of longer lead times and difficulties in completing assemblies exerted considerable pressure on cash requirements; it was thus necessary to make assessments of a financial nature, also in order to agree on solutions and action plans.

Code of ethics, sustainability assessment The SACMI Statute states: ‘The Cooperative respects the principle of diversity in culture, race, gender, age, and other aspects; in pursuing its goals, it guarantees equal rights and opportunities for all’. This policy also applies to suppliers. Their selection always begins with an in-company inspection and a meeting with the owners to verify not just production-related aspects but compliance with values such as freedom of association, openness to negotiation and, obviously, the non-use of child labor. The Purchasing Department is responsible for verifying compliance with the above, also throughout the supply chain. Supplier selection always includes a fact-finding visit to the company and a meeting with the owners to check production aspects and ensure the company observes the principles outlined above. Since early 2022, the SACMI Group has enacted a policy of further-reaching, improved Sustainability management. One of the first steps towards more responsible supply chain management was the drafting of a Sustainable Procurement Policy. Hence the need to assess and monitor

the entire production process and Supply Chain: for this reason the SACMI Group has entered into an agreement with CRIBIS, a CRIF Group company. This agreement involves suppliers joining Synesgy. The latter is a global digital platform which, via compilation of a self-assessment questionnaire, rates suppliers’ overall commitment to environmental, social and governance issues by integrating evaluation of service, affordability and quality aspects. Specifically, assessment relates to: • Environmental: water, energy, waste and environmental certification • Social: personnel management, certification and standards, relations with stakeholders and the community • Governance: framework and composition, certification and standards. Synesgy applies a methodology based on international sustainability standards, including the Global Reporting Initiative (GRI), the UN Global Compact and the Carbon Disclosure Project. At operational level, the improvement process began with sharing of the Sustainable Procurement Policy, Quality, Safety and Environment Policy and the Code of Ethics with suppliers. Subsequently, the questionnaire was shared via the platform. Out of all the involved suppliers, over 650 have registered on the platform. Of these: 38% have completed and sent the questionnaire 53% are in the process of compiling the questionnaire 9% have registered on the platform but have not yet begun compiling the questionnaire Suppliers who did not complete the questionnaire were sent a reminder, offering them all the necessary support. Subsequently, to ensure all suppliers are ‘on board’, a second reminder will be issued to those who have still not registered. Furthermore, all SACMI Group Purchasing Offices were given training sessions illustrating the project goals and explaining how the platform operates. This training was done to put all Purchasing Offices in a position to respond quickly should suppliers request detailed information on the project.

SACMI

Suppliers

Local ancillary industries and integration in the local manufacturing hub 143

Being located in a key mechanical engineering area with outstanding entrepreneurial credentials, it is only natural that SACMI should favor local suppliers. Many of the strategic suppliers with whom the Cooperative has established decades-long relationships are located here. The results are evident in the quality of the products and the ability to anticipate market needs. This has not, however, impeded exploration of new industrial hubs in Italy and abroad to track down specific skills and pre-empt production problems. In 2022 goods and services totaling 880 million euro were purchased (32% more than in 2021). Induced economic and employment growth in the region continued, confirming SACMI’s role as a key developer of communities in Emilia-Romagna. In 2022 the value of purchases from local suppliers (Emilia-Romagna region) reached 617 million euro (an increase of 40% compared to 2021). Purchases of machines from third party suppliers and subsidiaries continues to account for a significant proportion of total volumes With regard to materials only (machines and spare parts), 2022 generated purchases to the value of 315 million euros (up by 16% with respect to 2021).

The chapter illustrates how the entire SACMI Group has performed vis-à-vis qualitative data linked to corporate procedures and processes (quantitative data refers to SACMI Imola SC only).

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Social performance

Integrated Annual Report 2022

6.1

146

Our people

Composition and characteristics1

to the 16 SACMI companies within the reporting boundary, the situation has now stabilized and, at the end of 2022, there were at 3,055 employees, 98% of them on permanent contracts. These companies also have a quota of non-employee workers: in 2022 there were 107, most of them agency workers.

People play a vital role in SACMI's corporate organization and success. The cornerstones of corporate policy for employees are: stability and continuity of employment, development of human resources, measures designed to safeguard health and safety.

On 31/12/2022 the parent company SACMI Imola SC had 1,177 employees (60 more than in 2021), of whom 1,169 were on permanent contracts (99.3% of the total, compared to 95% in 2021). Note also that 96 people were hired in 2022, against 36 outgoing resignees.

SACMI safeguards and contributes to the development of human capital in the areas where it operates by creating employment. Over the last few years, SACMI Group employees have increased steadily in number. With regard

Employees by contract type and gender 2022 Women

Men

Total

Permanent contract

499

2,495

2,994

Temporary contract

Total employees

514

2,541

3,055

1 In this section, unless otherwise specified, the term ‘companies of the SACMI Group’ (also ‘the SACMI Group’ for brevity) refers to the 16 Italian companies within the reporting boundary (see Methodological Note).

SACMI

Our people

Employees by type of work and gender 2022 Women

Men

Total

Full time

430

2,530

2,960

Part time

Total employees

514

2,541

3,055

Employees by geographical area (on 31.12.22) 147

23%

22%

Imola

Other areas of Italy

Emilia Romagna

55%

Employees by profession and gender 2022 Women

Men

Total

Managers

Executives

138

150

Office workers

486

1,409

1,895

Factory workers

924

938

Total

514

2,541

3,055

Percentage

16.82%

83.18%

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Integrated Annual Report 2022

Employees by profession and age 2022

148

<30 years

30-50 years

>50 years

Total

Managers

Executives

150

Office workers

269

1,066

560

1,895

Factory workers

191

454

293

938

Total

460

1,590

1,005

3,055

Percentage

15.05%

52.05%

32.90%

In 2022, there were 108 workers belonging to vulnerable groups. Women account for almost 17% of the total SACMI workforce. Virtually all of them are employed in office duties; while this is not a large

SACMI Group companies have achieved a balanced spread of professions; in 2022, 2.36% of the corporate population were managers, 4.91% executives, 62.03% office workers and 30.70% blue-collar workers.

New hires and turnover by gender 2022 Number of new hires

Number of resignations

New hire rate

Turnover rate

Men

226

137

8.89%

5.39%

Women

12.06%

6.03%

Total

288

168

9.43%

5.50%

Number of new hires

Number of resignations

New hire rate

Turnover rate

< 30 years

162

35.22%

6.96%

30-50 years

109

6.86%

5.53%

>50 years

1.69%

4.78%

Total

288

168

9.43%

5.50%

New hires and turnover by age 2022

SACMI

Our people

New hires and turnover by geographical area 2022 Number of new hires

Number of resignations

New hire rate

Turnover rate

Imola

2.78%

2.63%

Emilia-Romagna

148

8.83%

5.07%

Rest of Italy

121

17.54%

9.42%

Total

288

168

9.43%

5.50%

proportion it nevertheless reflects the general situation in a sector (mechanics and mechatronics) where female participation is, for historical and cultural reasons, generally low. The vast majority of SACMI Group managers (about 58%) come from Emilia-Romagna, Veneto and Lombardy, underscoring the company’s close ties with the local community. About 3% of the company population are parttime workers who have taken advantage of work-life balance and parenting support policies. High worker loyalty is also reflected in the average age (in 2022 52% of the corporate population were aged between 30 and 50, 15% under 30 and 33% over 50) and the length of service in the company (23% have been with SACMI for between 16 and 25 years, 19% have been in service for over 25 years). All SACMI employees are covered by collective bargaining agreements: the National Collective Agreement for Cooperative Metalworkers applies to all employees of the parent company SACMI Imola SC, while the National Collective Agreement for Metalworking Industry Employees or the National Collective Agreement for Transport and Logistics Workers applies to all subsidiary employees. All executives are covered by the National Collective Agreement for Industrial Executive Workers (refer to Italian text for original-lan-

guage contract definitions). The use of Codes of Ethics, Organization, Management and Control Models and periodic monitoring by Supervisory Bodies allows companies in the SACMI Group to identify any discriminatory conduct that might be inconsistent with corporate conduct principles/rules and, therefore, require disciplinary action. No cases of discrimination were recorded in the reference period. In 2022, 288 new hires joined SACMI (226 male), 56% of whom were aged below 30. Over the same period there were 168 resignations.

Skills enhancement Personal and professional growth, framed by the respect, willingness to listen and feedback principles established in the governance model, lie at the core of SACMI HR policy. In February 2023, the new Academy at SACMI Imola was inaugurated: 400 m2 set aside training, an investment of some 2 million euro. Offering practical, flexible spaces that are well suited to ‘collaborative training’, the facility is designed to act as a growth driver and a catalyst for the exchange of ideas and expertise. During 2022, the SACMI Academy delivered over 42,262 hours of training to about 2,500 employees of Italian companies in the SACMI Group.

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The Academy in numbers • • • • •

42,000 training hours in 2022 2,500 persons involved 100 certified instructors 400 m2 set aside for training purposes €2 million invested

150

More specifically, in 2022 each employee received an average of 13.83 hours of training. In general, skills enhancement at SACMI follows both a bottom-up model (listening to workers’ needs, perceived quality of work, areas for improvement) and a diffused top-down model. In other words, the aim is to ensure that key development skills are acquired and coordinated by team leaders, not just management, as they’re the ones in direct contact with workers and have the task of helping to build harmonized teams. The adoption of new digital tools - alongside the growing number of roles in the organization requiring their use - has become crucial, as it allows training to be delivered in a way that’s structured, transparent, homogeneous and, last but not least, in synergy with everyday manufacturing tasks. With regard to the parent company, SACMI Imola SC, 29,096 training hours were provided in 2022, an increase of 72% compared to 2021 (the sum of language and technical-specialist skills training, plus training hours provided under the apprenticeship schemes that play a key role in the organization).

SACMI

Our people

151

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Integrated Annual Report 2022

Training delivered to employees * 2022

Number of training hours delivered to employees

42,262

Avge training hours per employee

13.83

Plus 16,120 safety and environmental training hours: see ‘Health and Safety’ section.

Training by gender 2022

152

Total number of training hours for female employ-ees

7,509

Total number of training hours for male employees

34,753

Avge training hours per female employee

14.61

Avge training hours per male employee

13.68

Training by profession 2022 Total number of training hours for Managers

1,281

Total number of training hours for Executives

2,022

Total number of training hours for Office workers

29,947

Total number of training hours for Factory workers

9,013

Avge training hours per Manager

17.79

Avge training hours per Executive

13.48

Avge training hours per Office worker

15.80

Avge training hours per Factory worker

9.61

SACMI favors a goal-oriented diffused leadership model based on the corporate principles and values of solidarity, ethics, listening and teamwork.

Talent acquisition Attracting resources on the labor market that match SACMI's needs is central to the compa-

ny's employer branding and talent acquisition strategy. This strategy extends beyond the recruitment of new talent to include all actions that favor high employee retention rates. Upstream from the implementation of SACMI's employer branding strategy lies the employee value proposition (EVP), the definition of which was based on over 30,000 interviews with high school and university students. It emerged from these interviews that potential new hires are at-

SACMI

tracted by flexibility, access to training and scope for professional growth. This result, combined with internal assessment - to understand how SACMI combines technological prowess with the right mindset - led to the definition of the value proposition, endless innovation, the drivers of which are internal training and the multi-dimensional interdisciplinary nature of personal-professional development opportunities.

Train the trainers

Our people

my assigned role in the company, which paths I should - or could, voluntarily - take to hone those skills). Three cornerstones of the initiative: • identification of goals • definition and dissemination of a culture of feedback • dissemination of the performance appraisal system, operational as of 2022 in all Group companies.

Me@SACMI

Passing on company skills is a key part of the Academy's training programs. Inter-generational development is a SACMI hallmark. Hence the ‘Train the trainers’ program, which has led to the certification of over 100 internal trainers. This ensures the technical/motivational skills of experienced personnel are put to good use both in routine training and, above all, during onboarding of new hires.

December 2021 saw the launch of ‘me@SACMI’: an internal digital platform where workers can see which training courses are available (recommended on the basis of skills specific or complementary to their job) and sign up to them. This platform can also be used to rate the courses attended, providing useful feedback for other colleagues.

Leadership talks

Performance management

Launched in 2023, this open-to-all-employees initiative offers a series of inspiring talks on diffused leadership, personal-professional effectiveness and teamwork. This is part of a wider strategy to streamline intra-company skills transfer in accordance with SACMI principles and values, with particular emphasis on an inclusive, collaborative leadership style. Held in April, the first talk, in Auditorium 1919, was attended by over 700 people (300 in person, the rest online).

In 2022, managers and other members of personnel completed their performance management training (a system to assess performance and ensure it aligns with the organization's goals). Participants received a total of over 9,600 training hours. This approach, which focuses on knowing both ‘how to be’ and not just ‘how to do’, is consistent with the governance-level ‘leadership and listening’ model and aims to introduce a culture of feedback, inclusion and performance.

Talent management Mapping of the skills required within the company - both hard and soft skills - preceded the drawing up of training programs and helped define them. Together with the introduction of a performance assessment framework, this allowed SACMI to establish key competences and, in parallel, identify any gaps requiring targeted individual/team training. Over 3,200 positions with critical skills were mapped. The initiative also included fact-finding surveys and personalized profiling (e.g. what my skills are, what they should be with reference to

“Leading by values” Designed together with the Bologna Business School, this 2-day 3-module course was aimed at members of the organization who have team coordination and leadership roles. Some 100 people attended the course, subsequently going through a follow-up process to test the effectiveness and the margins for improvement of the collaborative model. As the name implies, ‘Leading by Values’ looked beyond the attainment of goals: it also placed emphasis on the methods - which need to be compatible with SACMI’s principles and values - used to achieve them. It focused, in equal measure, on the technical, organizational and

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behavioral (collaborative logic inter-sector and inter-company) skills needed to implement growth strategies and, therefore, define interdisciplinary training programs according to a model that is cohesive and uniform throughout all SACMI Group companies.

Project management The SACMI Academy’s 2023 goals include implementation of a ‘project management’ module, coordinated by the PMO (project management office) and co-designed with Turin Polytechnic. This aims to deliver homogeneous intergroup management of orders, any issues and their res-

154

SACMI

olution. A further aim of the module is to broaden the target for the Academy's programs, which will, in future, be open to both SACMI stakeholders and customers.

Academy Digital & IoT In keeping with the line taken in 2021, the Academy continues to focus on enhancing in-company employment of tools that streamline the digital transition. This means training on key aspects such as collaborative co-working. However, it also means instilling a far-reaching, interdisciplinary digital mindset that aligns with the organization’s goals.

Our people

Mapping of critical skills has also led to the definition of an organizational sustainability strategy that includes ‘replacement plans’: preventive training that takes into account the expected ‘population dynamics’ within SACMI (retirements, new business needs, etc.) in order to continuously improve SACMI's ability not just to manage but also plan current and future needs.

Schools and Universities Training is the lifeblood that feeds the organization’s growth: with the Academy, SACMI extends such training to customers, the other companies in the SACMI network in Italy and worldwide, to universities and schools. This approach - which seeks to make the most of ongoing partnerships between SACMI and the world of education - aims to attract new talent to fill key positions in the company, in keeping with the needs, strategies and programs outlined above.

For 2022 the SACMI project portfolio consisted of: • • • • •

62 in-company university thesis projects 7 PhDs (doctoral thesis) 26 internships 56 school-age work experience projects 16 active partnerships, from high schools to degree courses

Total: 167

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Remuneration policies

156

All SACMI employees receive support to promote their personal development and well-being. This takes the form of, for example, professional training and, in parallel, equal opportunities and pay without any form of discrimination. Given this, the remuneration policy regards everyone in the company, senior managers included. The awarding of bonuses, defined by an internal Group policy, stems from individual performance in terms of reaching assigned goals. During 2022, all SACMI roles were assessed according to an international method. Roles were clustered into skill-specific bands and, for each band, a market positioning curve was drawn up to evaluate internal and external equity with respect to guaranteed pay (Total Guaranteed Compensation). This methodology, linked to formalized performance assessment, provided managers with support in prioritizing and evaluating 2022 salary increases, in line with the remuneration model defined for each company. The entire process was made easier thanks to a dedicated IT tool that allows salary growth to be planned according to individual performance and market-related individual remuneration positioning. The salary model and the remuneration policies connected to it have been approved by the highest decision-making bodies of each SACMI company. Moreover, they approve, on a year-by-year basis, the remuneration budget, in keeping with the company's economic and financial plan.

Company Benefits and Welfare Putting people first: to give substance to this concept, SACMI has defined various benefits of both a financial and social nature. Such initiatives aim to improve the personal well-being of employees and their families and meet some of their extra-work needs.

Supplementary health care Every SACMI employee and his/her family members who are dependents are covered, free of charge, by a supplementary health care policy, the cost of which is met in full by the company.

Employees can extend coverage to non-dependent family members by paying a small monthly fee that is deducted from wages. In 2022, 1,180 employees and 1,462 family members were covered by the policy (this data refers to SACMI Imola).

Pension Fund SACMI workers with at least 10 years’ service can join the company's supplementary pension fund. The worker pays in a minimum percentage of the annual fee, while the rest is paid in directly by the company. In 2022 there were 684 SACMI Imola employees registered on the scheme, with the total fund pay-in of 4,771,490 euro being sub-divided into 1,990,326 euro paid in by SACMI, 104,754 euro paid in by employees and 2,676,410 euro concerning retirement-related severance pay.

Insurance policies Employees have a Life Insurance policy that pays an indemnity to heirs in the event of death and a policy covering permanent illness-related invalidity. For some years now there has also been an Accident Insurance Policy that pays an indemnity in the event of injury in or outside the workplace.

Inter-company day nursery SACMI gives employees' families the opportunity to access Il Nido di Cornelia inter-company nursery school at discounted prices. Managed by Seacoop, this is the first nursery in Emilia Romagna to be set up and promoted by several local companies, including SACMI. The building has an eco-sustainable design and the nursery has an official working arrangement with the Municipality of Imola.

Other benefits In 2020 the SACMI Group immediately took contractual measures to allow personnel to work from home. Starting in 2021, it also took steps to replace, in some Group companies, the traditional clock on/off system with an on-line office

SACMI

place booking and management system. In 2022, all 3,055 employees of the SACMI Group Italian companies made use of corporate welfare options. This measure made it convenient for employees to purchase vouchers (fuel vouchers, shopping vouchers, e-commerce purchases) on a dedicated digital platform.

Internal commissions (SACMI Imola) SACMI personnel enjoy a strong sense of belonging to the company. This takes the form of a series of employee-organized recreational, cultural and charity initiatives, involving the organization’s members and personnel in a wide range of activities. In 2022, reorganization of the SACMI Imola internal commissions was completed and new delegates for the period 2023-2025 were duly elected.

Cultural, Recreational and Publishing Commission (C.C.R.S.) Founded in 1968 on the initiative of members and employees, the Circolo Culturale Ricreativo SACMI (SACMI Cultural Recreational Club) was set up to promote cultural and leisure activities and, simultaneously, strengthen the sense of belonging to the Cooperative. The SACMI CCR experience is similar to that of various Cooperative Clubs established in Imola as part of the cooperative movement. Given the considerable involvement of local people and authorities, such experiences have often enhanced the town's civil and cultural heritage. Over the years, cultural and recreational activities have given rise to self-organized acts of charity, leading to continuous support for international missions, especially in Brazil, Ethiopia and Bolivia (getting people into employment, organizing long-distance adoption schemes and various community support programs). As part of the new three-year framework, the C.C.R.S. will also oversee activities previously carried out by the Press Commission, namely publication of La Ruota, the official house organ, which explores company issues and disseminates the values to which SACMI adheres. La Ruota pro-

Our people

vides updates on results, technological innovations, new products, and publishes news concerning personnel or ancillary industries.

“Cooperative Shareholders’ and Training Commission”. After a pandemic-induced hiatus in 2020, the period 2021-22 saw the Training Commission return to work with projects for employees, customers and stakeholders. These activities consist of organizing meetings that provide a better understanding of the individual company departments-businesses, including new machines and any prototypes. During the recently completed mandate, four meetings were organized: two dedicated to Rigid Packaging (Rigid Packaging Innovation Days and 70 years of business history), one in-person meeting at the ceramic laboratory and, lastly, another relating to innovation in the Whiteware BU that focused on the sustainability of our plant engineering solutions. A combination of in-person and online participation, successfully trialed during the latter stages of the pandemic, allowed us to widen the potential audience to employees of other SACMI Group companies, customers and stakeholders, including those outside the industry. During the three-year period, the Shareholders’ Commission promoted two-way dialogue with the Board of Directors. This was to ensure members play a proactive role in various matters and, more specifically, that they participate in the Statute/Internal Regulations renewal process. Approval of the new Statute and new Internal Regulations - the final draft of which was put forward following discussions between the Board of Directors and the entire cooperative membership - has, as of the three-year period 2023-25, resulted in a unified ‘Cooperative Shareholders’ and Training Commission’ which, as the name implies, will be actively involved in corporate training. The purpose of this new Commission is to: • promote initiatives that ensure the strengthening and continuity of cooperation principles among all employees, thus promoting greater awareness of cooperative identity and a deeper understanding of the company.

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• •

promote training for Members and Employees. promote events that lead to improved understanding of the company and the Group.

The Board of Directors can assign the Commission tasks pertaining to the above. To fulfil its role, the Commission coordinates with other corporate departments or personnel and, as with the Shareholders’ Commission, is made up of and elected by Cooperative Members only.

Health and safety

158

At SACMI improving health and safety in the workplace is not just a legal requirement: it is a cornerstone of the way our Parent Company and all subsidiaries do business, an aspect that has long been our hallmark. More specifically, SACMI is committed to continuous improvement of workplace health and safety, transforming its culture of social responsibility into an untiring quest for optimal worker-focused solutions. The companies instill a culture of safety at every organizational level, promoting responsible behavior by all those involved, directly or indirectly, in production processes. Attention to safety is not just limited to SACMI employees but is extended, on a daily basis, to all those who work in or visit company buildings or production plants: at the parent company SACMI Imola, the entry/exit monitoring system estimates that some 1,300 people are within the perimeter of the facility every day, of whom about 300-400 are from outsourcing companies or visitors. Commitment to employees’ health and safety is ongoing. This ensures all tasks are performed in a secure environment, in full compliance with internal and regulatory prevention-protection standards, the goal being to achieve continuous improvement. Some Group companies, such as SACMI Imola and SACMI Carpmec, have adopted Health and Safety Management System certification in compliance with ISO 45001; together with Quality System certification as per ISO 9001 and Environmental Management system certification as per ISO 14001, they ensure an effective and

efficient approach to aspects concerning workplace health and safety. Such certifications are renewed and updated annually. These management systems cover, in compliance with the relative standards, all workers (employees and third parties) at SACMI. All SACMI companies comply with Italian D.Lgs. 81/2008 and make all the relative provisions. Over the years the companies’ Prevention and Protection service has – with the constant support of qualified professionals and company health and safety bodies – made constant progress in multiple areas as required by Italian law. SACMI ha developed an in-depth understanding of all aspects involving technology, health and safety. Auditing of manufacturing departments and installation sites, performed periodically for workplace inspection purposes, has ensured proper assessment of risks associated with the use of machines, systems, substances and products. In general, a combination of auditing procedures ensures monitoring and reduction of all risk factors (e.g. use of electricity, mechanical dangers, workplace orderliness/cleanliness also via the 5S Lean method, electromagnetic fields, noise-related risks, emergency procedures, artificial optical radiation, vibration, manual load handling, explosive atmospheres, pressurized equipment, all lifting gear/tools/accessories etc.). Some SACMI companies, SACMI Imola SC included, have, via their Boards of Directors, approved their own quality-safety-environmental policy. This decision stems from their awareness that quality, safety and environmental sustainability are not just founding principles but major competitive advantages. For example, SACMI Imola SC has adopted internal procedures to ensure effective management of health and safety risks, including: • machine/plant design: monitoring of safety-related aspects via a Product Safety team • management of installation contracts (organizing the order, assembly, in-the-field checks) • management of services and contracts at installation sites and inside plants. SACMI companies have activated procedures that inform and train personnel on workplace health and safety matters in compliance with

SACMI

Our people

Safety and environmental training 2020

2021

2022

Investment in training (Euro)

105,157

158,951

212,272

Training hours/year (N°)

5,848

13,796

16,120

Individuals involved per year (N°)

1,482

2,248

2,368

the relative standards. This continues the long-standing practice of commitment to safety in terms of hours and employees involved. SACMI's commitment to prevention and protection training is ongoing and takes numerous forms: in 2022 investment in health and safety training totaled 200,000 euro. This involved a total of more than 16,000 training hours for more than 2,368 workers. In 2021 a corporate body that deals with all the Italian subsidiaries to organize safety and environmental training was established. This body is responsible for drawing up the Corporate Safety Training Plan, which establishes a list of the compulsory training required within each company. It also organizes training events at Group level, in concert with individual company Occupational Health and Safety officers. In 2022 safety and environmental training involved: • courses for new-hires • courses for supervisors and managers • general updating courses for all workers • courses on how to use company equipment (aerial platforms, fork-lift trucks, bridge cranes, electrical risks etc.) • courses for working safely in confined spaces • emergency team upgrade courses (fire-fighting, first aid, defibrillator use) • training courses concerning use of equipment and company procedures In 2022 the key Health and Safety investments included: • installation of new pollutant extraction systems for new production areas

• • •

redefinition of new production layouts renewal of fire detection systems investment in preventive safety checks on factory machines • investment in a new web application for managing safety data (training, medical examinations, risk assessment) Furthermore, routine renewal of periodic risk assessments continued, as did the consequent application of improvement measures. SACMI companies have opened multiple communication channels with all employees to ensure continuous improvements to workplace health and safety. SACMI aims to disseminate an inclusive culture of safety to which everyone can rightfully and responsibly make an active contribution. This objective is being pursued in all Group companies via meetings that involve all personnel from all departments, third parties included. The process includes: • periodic audits or meetings to share company performance info for each corporate area • periodic teamwork with Workers' Safety Representatives (in addition to meetings required by law) • an app to report safety/environmental concerns • periodic training courses (that also go beyond legal requirements) • regular newsletters • an intranet area providing safety, environment and sustainability information Several years ago, as part of ongoing improvements, SACMI created an app that lets employees independently report any ‘near misses’ or unsafe actions they may have observed. Reports are forwarded to the area contact in an anonymous format before being investigated.

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160

Tavolo 81 Imola Association The Associazione Tavolo 81 Imola promotes a culture of workplace health and safety in the Imola area. It was founded in 1999. Every year it organizes seminars, conferences and events on topical health and safety issues, illustrating how improvements can be put into practice. It also organizes training in schools in and around Imola. SACMI actively supports the Association, after having held its presidency until July 2021 on behalf of Legacoop Imola. During the year, the Association organized meetings on new topics, involving the various stakeholders (companies, supervisory bodies, consultants, trade associations). Their purpose was to analyze legislative changes, assess their ramifications, look at the requisite implementation methods and examine any problem areas. Three meetings were held in 2022: ‘Fire prevention in the workplace: new developments’ (organized at the SACMI IMOLA headquarters), ‘Communicating Safety’ and ‘The Black Factory - Brain Revolution’. Furthermore, SACMI Imola (through Legacoop Imola) nominates a person to sit on the board of Più Sicurezza Srl, a company that provides a wide range of safety-related worker training courses at a modern testing ground: the latter offers the settings, machines and equipment needed to simulate the main scenarios in various production industries.

SACMI

With reference to the parent company SACMI Imola, the 5S method has been applied in all manufacturing departments since 2018. Since the beginning of 2020, the project has been redefined by adding a safety section: 5S + 1 Organization and Safety. The project also involved all the facility’s contractors. The foundations of the project are: • Culture change: a goal shared by the lean (5S) philosophy and safety programs • Promotion of health and safety: engagement with all personnel to build greater safety awareness • Creating a leadership culture that naturally merges safety and productivity

The COVID-19 pandemic In January 2020 SACMI Imola immediately implemented a coordinated COVID-19 risk mitigation plan for all its Italian and foreign facilities. This last period has seen SACMI renew its commitment to minimizing infections by continuing to apply already-implemented measures, even

Our people

after the declaration of the end of the state of emergency. Such measures included: • Activation of a company COVID team • A fast-response communication strategy: this included establishment of a dedicated internal website, periodic updates to inform and involve, anti-contagion protocols both for factories and installation sites (in Italy and abroad), dedicated webinars • Maintenance of ‘work from home’ options • ‘Smart booking’ during the peak of the pandemic • COVID tests: agreements were made with various local labs. • Green Pass (Covid passport): in October 2021 automated Green Pass checks were established at company entrances. • Company vaccination campaign (June 2021) in collaboration with CEFLA SC, the local health authority and the Municipality of Imola (2000 doses administered to employees throughout the SACMI Group) These prompt actions minimized workplace infections, safeguarding employees, their families, and company productivity.

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Work-related accidents - Employees 2020

2021

2022

Recorded work-related accidents

Number of hours worked

4,295,175

4,991,163

5038,025

Work-related accident rate Number of accidents/hours worked *200,000

0.93

1.20

1.31

162

16 Over

thousand training hours on safety and the environment for 2,368 workers

200 Over

thousand euro of investment

SACMI

Our people

In 2022, thirty-three workplace accidents involving SACMI Group employees were recorded, with no fatalities. Thirteen non-employee workers were injured.

check-ups - specialist check-ups for those aged over 40. These benefits are extended to over-40s every two years, whatever their role, and to retired SACMI Imola employees.

Injuries mainly involved cuts and bruises on hands and legs. With regard to the parent company SACMI Imola, applying the principle of internal mutuality means that the cooperative also provides - in addition to legally required medical

SACMI is attentive to the safety of personnel travelling abroad. All workers have access to an urgent medical information and support system to solve any health matters or security problems that might occur overseas. The service is provided by a specialized company that updates information in real time and responds 24/7 to requests for assistance worldwide. A centralized travel booking system allows for the management of specific information for each destination and person. 163

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6.2

Cooperative membership

164

The distinguishing element of a cooperative, the principle of mutuality (also known as the principle of cooperation), lies in the economic relationship members have with the Cooperative (profit shares, membership loans etc.) and their role in its democratic processes.

SACMI Imola membership levels dropped slightly with respect to the previous year. Nine workers became members in 2022 (against 15 losses: 14 retirees and 1 death); they were selected on the basis of requisites such as a minimum of 5 years’ service, moral and professional qualities such as dedication and cooperative spirit, dynamism and professionalism. In compliance with Italian law 142/2001 concerning worker-members, profit shares are issued as per legal requirements and may take various forms such as an increase in the value of share capital (as a form

of capitalization and therefore self-financing for the company) and wage bonuses. Another key feature of the relationship between Cooperative and Member is the membership loan. This tool, which lets members invest in their own work and finance the activities of the cooperative, is managed according to rules drawn up by the Members’ Assembly. Compared to the previous year, its value increased by about 900,000 euro.

Number of members 2020

2021

2022

N. of members

381

382

378

% of members against total

35%

32%

SACMI

Cooperative membership

A further cooperative-specific feature is the application of basic democratic principles. These allow members to play a role in the decision-making process and take part in the Assembly and the election of the Board of Directors. During 2022 seven assemblies were held, with average attendance running at 85.79%. The corporate capital of the patent company in 2022 amounted to 38 million euro.

Total corporate capital (euro) 38,500,000

38,400,000

38,000,000

50,000,000 40,000,000

165

30,000,000 20,000,000 10,000,000 0

2020

2021

2022

22,055,821

22,071,250

22,965,347

2020

2021

2022

Total membership loans (euro)

25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0

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6.3

166

Customers

SACMI aims to be the leading technological and market force in all the sectors in which it operates. The company is renowned for its capacity to design cutting-edge solutions that satisfy customers. SACMI is not just a mere supplier. Rather, it seeks to create partnerships with customers: this begins at the product design phase and continues with close support and training to ensure they get the best from the plant after installation and start-up.

This explains why most of SACMI's customers are long-standing ones. The company builds mutually rewarding customer relations on the basis of guaranteed product and service quality (reliable machines, plants and after-sales assistance etc.) and constantly strives to innovate and develop teamwork and partnerships. SACMI provides a vast range of products and services and, as might be expected, its customers are no less diversified.

Sales distribution by geographical area (on 31.12.22)

20%

17%

Italy

Other EU countries

Rest of Europe

Africa

Asia

America

20%

33%

2% 8%

SACMI

Some 86% of SACMI's business is done with foreign customers.

Partners in development Customer relations are built on a continuous quest for excellence and ceaseless quality control: this is why SACMI periodically monitors, directly and indirectly, customer satisfaction, the aim being to amass all elements that might be useful for improving goods and services. SACMI bases customer relations on the partnership principle, which aims to: • guarantee the effectiveness of control systems throughout the production process • provide consultancy and training on proper plant use • involve customers at the product design stage.

Customers

In 2022, the SPACE service was expanded with the launch of the SPACE UP App and the application of a QR code on all SACMI machines. By using the app to scan the on-machine QR code, customers can access both e-support services (remote or on-site assistance, requested via the app) and e-docs (online consultation of all updated machine documentation). Revamping services were also bolstered, starting with those SACMI machines (e.g. presses) that make up what is the global ceramic industry’s largest installed machine pool.

Customer health and safety To ensure customer health and safety, the SACMI Group takes all necessary measures to guarantee outstanding product safety. 167

After-sales service is a salient part of SACMI policy. Strengthened customer relations are needed to ensure maximum service efficiency and reliability. Recent years also saw the establishment - and gradual expansion to include new functions - of the on-line S.P.A.C.E. (SACMI Portal for Aftersales and Customer service Excellence) service. Its goal is to integrate on-line assistance, spare parts and support on a single platform, in synergy with innovative customer service packages provided by the parent company and other SACMI manufacturing and assistance facilities in Italy and abroad. In early 2022, additional services that innovate maintenance on SACMI machines and systems were launched and/or made ready. These include scheduled maintenance plans, ongoing monitoring of ‘system health’ and the provision of ‘preventive’ spare parts kits. More specifically, the year saw the launch of the new Smart & Secure Services (scheduled maintenance plans). These aim to provide customer support by optimizing SACMI plant/machine control and efficiency; the goal is to prevent problems before they can actually occur, quantify maintenance costs in advance and boost plant availability.

The Group applies internal procedures that ensure safe internal design and detect any deviation from mandatory standards. Such procedures guarantee that all machines and equipment comply with the EU Product Directive; compliance checks are also extended to the sale of machines provided by third-party suppliers. Furthermore, to ensure safety during installation on construction sites, in 2018 the SACMI Group set up a service that checks the documentation of all suppliers entering installation areas. The service aims to establish continuous dialogue with suppliers and customers to build a strong culture of safety, ensure it is applied daily and that it permeates every task. Through this service, the SACMI Group has significantly improved construction site safety in recent years. In parallel with checks on documentation, a further service sees site safety technicians inspect the work done by suppliers who operate on customers’ sites on the Group’s behalf. Both services use a software that allows data exchange between SACMI Group technicians, suppliers and customers. To oversee construction site safety properly, some Group companies have implemented

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Integrated Annual Report 2022

best practices, such as the drafting of coordination reports or periodic internal meetings. SACMI Group companies did not find any cases of non-compliance with standards concerning the health and safety impact of their products. Any non-conformities revealed during inspection of on-site installation services are periodically reassessed and analyzed. To take any reported operational non-conformities into account, a new KPI for evaluating providers of such services is being implemented.

168

2022 saw the launch of the SACMI

SPACE UP

app and the new Smart & Secure Service maintenance plans

SACMI

Customers

169

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6.4

Involvement in local communities

170

SACMI extends the cooperation principle into the wider world where it supports numerous local and global projects. This ongoing support is in keeping with its core values.

Over the last three years, SACMI has allocated over 2.25 million euro to support local and international charity projects, especially in education and health. This amount includes both resources pertaining to the income statement and disbursements from the cooperative fund, for institutions/projects approved at the time of allocating profits from previous years. Helping to provide training and personal care services, both in Imola and other parts of the world where SACMI operates, is a key part of community service, as are initiatives to support art, culture and sport. Deciding which projects to adhere to in a given year depends on the actual needs of local communities, needs that are identified by listening carefully to local people and the main charity associations who operate there. Key initiatives in 2022 included the donation of a next-gen electrosurgical unit to the Gastroenterology department of Imola Hospital. Applicable across multiple fields – general surgery, vascular surgery, laparoscopy, just to mention a few - this instrument enhances both the preci-

sion and quality of the surgeon’s work. The use of advanced digital technology means the electrosurgical unit exerts a specific on-tissue effect: this reduces risk of hemorrhage and safeguards adjacent tissues, improving both the quality of surgery and the patient's prognosis. This donation follows others in the Imola area over the last few years that have provided various hospital departments with vital scientific/ diagnostic equipment. In India, one of the most noteworthy projects was ‘Bringing smiles through education & improvement’, which relies on contributions from the local SACMI Engineering office and the Smile Foundation. This year saw the donation of over 60 tablets to children attending a school in Manipur, one of the country’s most remote districts. The goal is to support every child’s right to an education, regardless of their background: a must if individuals are to achieve their full social, professional and personal potential.

SACMI

This initiative follows several other global charity projects that have involved SACMI over the years, projects that have sought to uphold people’s most basic education and health rights, especially children’s. Other disbursements were made during the year, in continuity with previous ones. Many were made to associations that provide local health and care services: these include the ANT Foundation (free home care for cancer patients), Aism (multiple sclerosis), LILT (Italian league for the fight against cancer), Kasomay Onlus (scientific research into rare children’s diseases), Professione Medica (health training and education in schools), Italian Red Cross – Imola Section and Anteas Imola (services for the disabled or persons who are not self-sufficient). Health - above all, in the sense of human dignity - remained the focus of a set of initiatives to sustain various local associations: these included donations to the Fondazione Banco Alimentare Emilia-Romagna Onlus (food bank), Associazione No Sprechi Onlus (free meals for persons faced with hardship), the Diocese of Imola and

Involvement in local communities

PerLeDonne Onlus (for the protection of women against abuse). On the education and training fronts, 2022 saw SACMI finalize donations to the University of Bologna in support of local degree courses, specifically the course on Chemistry and Technologies for the Environment and for Materials (Faenza campus) and the Mechatronics course (Imola site). Research doctorates also received funding on the basis of a framework agreement with Unibo. These initiatives stand alongside ongoing projects SACMI has established with universities, schools and research centers in strategic business areas. The year again saw significant contributions to Imola’s main sports associations and local cultural organizations/activities (e.g. the company supported the Italian government’s ArtBonus initiative via a donation to the Fondazione Teatro Carani in Sassuolo).

Support provided to the national and international community by sector (euro) 2020

2021

2022

Health / Social

1,386,287

55,414

193,425

Art / Culture

2,000

12,000

101,000

Education

42,292

4,000

327,500

Sport / leisure

45,750

39,750

41,050

Total

1,476,329

111,164

662,975

Auditorium 1919 After acting as the SACMI ‘communications control room’ for stakeholders and markets alike during the pandemic, 2022 saw Auditorium 1919 host a series of in-person events: some for internal training purposes, others focusing on

the local community, education and the associations with which the company operates. Almost 70 events were held in 2022. Two of the most important public meetings concerned innovation in the rigid packaging sector (e.g. Pack Passion - PETnology Europe) and the Defranceschi event co-organized with Vini Buoni d'Italia

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172

SACMI

Involvement in local communities

for the 2022 awards for excellence. Close collaboration with ISIA, the Faenza University of Design, proved to be particularly rewarding in 2022. with the Auditorium hosting a special event to present the partnership. Later on in the year, the winning designs were selected before going onto be displayed at the industry’s most important trade fairs. Further events involving guest speakers covered several subjects. These ranged from Artificial Intelligence to the world of Mechatronics (for example, Mechatronics Day, attended by undergraduate and post-graduate students) and trends and technologies in the ‘Powder Metallurgy’ field, with a 2-day intensive training course dedicated to workers in the industry. Associations again had a pivotal role to play. For example, the Italian Association of Macromolecular Science and Technology held a ‘technological day’ in November on new materials for sustainable rigid packaging; this included talks by key figures from the world of research, university and business. Further events involved local bodies that deal with sustainable development and workplace safety (e.g. the meeting organized by the Tavolo 81 association). On 27 December the Auditorium also opened its doors to the athletes and managers of the Athletics Imola SACMI AVIS club. In 2022 the Auditorium continued to host dozens of company training events that explored specific technological aspects, dovetailing with the courses held in the new SACMI Academy training facilities. In general, then, the Auditorium continues to act as an internal training venue and a ‘control room’ where events and initiatives open to all stakeholders are organized.

The chapter illustrates the performance of those companies within the reporting boundary.

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173

Environmental Performance

Integrated Annual Report 2022

7.1

176

Management of environmental impact

A permanent feature of SACMI governance and a key company competitiveness factor, the Quality-Safety-Environment Policy aims to continuously enhance the sustainability of production processes.

SACMI sees environmental protection as fundamental, a key element of the way the company interacts with the outside world. Hence the implementation of highly environment-conscious processes and procedures, in compliance with laws and regulations, including those of a voluntary nature. The goal: progressive improvement via periodic analysis of work-related environmental risks and the planning of prevention and/or mitigation actions. No organization within the reporting boundary reported any significant environment-related negative impact. In general, the environmental impact of SACMI's manufacturing activities stems from use of energy in production processes and the relative in-atmosphere emissions, water consumption and waste production. In December 2019 the SACMI Imola SC Board of Directors approved the Quality-Safety-Environment Policy, making sustainability one of the company's key competitiveness factors. Note that SACMI is committed to the continuous improvement of all environmental safeguards and the implementation of production processes consistent with a circular economy. Over the next few years the Policy will be rewritten to make it applicable to all Group companies. Moreover, SACMI Imola SC addresses the impact issue via an ISO 14001-compliant environmental management system via which it meets the requirements set out in its Autorizzazione Unica Ambientale (AUA, or Unified Environmental Authorization). Furthermore, the SACMI Group recently adhered to the HERALab Imola Project, a stakeholder engagement initiative that seeks to identify projects to improve carbon neutrality, energy efficiency and renewable energy use. The project centers on needs in the Imola area and involves 7 Group companies.

SACMI

7.2

Energy and emissions management

The share of purchased electricity generated from renewable sources has steadily increased over the years. In 2002 it was 3.8% of the total. Energy from self-production reached 10,594,767 kWh.

SACMI has implemented monitoring of production-related electricity and fuel consumption, enabling analysis of environmental performance with a view to lessening environmental impact. Fuel consumption falls into two macro-categories, both of which can be classified as ‘non-renewable sources’: natural gas and diesel for the vehicle fleet. In 2022, a small percentage of petrol was also used to fuel some cars in the company fleet. During 2022, SACMI consumed 4,887,948 cubic meters of natural gas, 11% less than in 2021, and 608,709 liters of diesel, an increase on the previous year. In 2022, the energy produced by the combustion of natural gas and diesel totaled 179,584 GJ. For the SACMI Imola facility alone, energy consumption from combustion in 2022 consisted of 3,628,097 cubic meters of natural gas and 179,584 liters of diesel, giving a total of 136,671 GJ. During 2022, SACMI consumed 30,733,727 kWh of energy, of which 20,138,960 was purchased from suppliers and 10,594,767 self-generated. Compared to 2021, SACMI's energy needs dropped slightly by 1%. A total of 110,641 GJ of electricity was consumed in 2022 (76,330 GJ of which was used by SACMI Imola alone). Some purchased electricity comes from renewable sources. This share has increased steadily over the years: in 2022 renewables provided 3.8% of all the electricity purchased by the Group. Since 2021, SACMI Imola has been committed to purchasing a percentage of electricity produced exclusively from renewable sources and aims to raise that percentage moving forwards. In 2022, SACMI Imola purchased 533,000 kWh of energy generated from renewable sources.

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Integrated Annual Report 2022

Energy consumption (GJ) 255,963

290,849

271,496

350,000 300,000 250,000

73.4% 75.9%

72.7%

200,000 150,000 100,000 50,000

24.1%

26.6%

27.3%

2020

2021

2022

FUELS

ELECTRICITY

0 178

Electricity consumed (GJ) 98,318

111,268

110,641

68.2%

65.5%

38.8%

31.8%

34.5%

2020

2021

2022

140,000 120,000 100,000 80,000

61.2%

60,000 40,000 20,000 0

PURCHASED ELECTRICITY

SELF-GENERATED ELECTRICITY

SACMI

Energy and emissions management

Purchased electricity (GJ) 60,131

75,932

72,500

105,000 90,000 75,000 60,000

97.5%

96.2%

98.9%

45,000 30,000 15,000 0

1.1%

2.5%

3.8%

2020

2021

2022

ELECTRICITY PURCHASED FROM NON-RENEWABLE SOURCES

179

ELECTRICITY PURCHASED FROM RENEWABLE SOURCES

Self-generated electricity (GJ) 38,187

35,336

38,141

56,000 48,000 40,000 32,000

96.2%

95.6%

95.7%

24,000 16,000 8,000 0

3.8%

4.4%

4.3%

2020

2021

2022

ELECTRICITY SELF-PRODUCED WITH TRIGENERATION PLANT

ELECTRICITY SELF-PRODUCED WITH PHOTOVOLTAIC PANELS

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Integrated Annual Report 2022

Self-produced energy has two sources: most of it comes from the SACMI Imola trigeneration plant, the remainder from the photovoltaic panels (about 4.3% in 2022) installed at SACMI Imola, Tecnos, SACMI Molds&Dies and Euroelettra. The company trigeneration plant at SACMI Imola has been operational since 2016. Its primary purpose is to produce medium voltage power (15,000 V) which is then fed into the company power grid for self-consumption.

180

Electricity is produced by a gas-powered internal combustion engine. Some of the heat generated by the engine is recovered by drawing it from the exhaust fumes, engine cooling water and the engine lubricating oil circuit. The high temperatures of the above make it possible to heat water to 95°C and feed it into the company's heating systems. Moreover, excess hot water is used to chill water to 7 °C (by means of an absorption unit). This chilled water is then fed into air conditioning systems. In 2022 SACMI Imola produced 9,776,860 kWh of thermal energy.

Bike to Work project for companies in the Imola area Since Match 2023 all employees in the Imola area have been able to join the Bike to Work initiative. A joint project with the Municipality of Imola, it gives workers a monthly remuneration for each kilometer cycled to/from work, as verified by a special app. The initiative has a dual value: to promote a healthy, sustainable lifestyle and prevent tons of CO2 emissions by taking cars off the road, thus encouraging good sustainability practices in the area. Numerous Group employees have signed up, with some 3 tons of CO2eq being saved in the first two months alone.

Furthermore, companies within the reporting boundary self-produce some of their energy with photovoltaic panels. In 2022, the portion of energy produced by these panels totaled 453,315 kWh. Energy obtained from renewable sources that is not consumed is fed into the grid. In 2022, self-produced energy sold forwards came to 125,685 kWh. In 2023 the company expects to markedly increase its photovoltaic generation with a further 2 MW of panels on roofing in the SACMI Imola plant. Various energy efficiency-enhancing projects were implemented in 2022 (e.g. replacement of lighting fixtures with higher-performing LED devices, renewal of obsolete boilers, making 7000 m2 of indoor facilities at SACMI IMOLA more energy-efficient, replacing doors and windows in the Gaiotto Automation plant).

SACMI

Energy and emissions management

10,594,767 kWh of energy self-produced

2022 in

181

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Integrated Annual Report 2022

Emissions (ton CO2 eq) 18,711

21,700

20,340

28,000 24,000 20,000

12,306

11,496

11,165

16,000 12,000 8,000

9,394

8,844

2021

2022

7,546

4,000 0

2020

182

SCOPE 1 EMISSIONS

GHG (greenhouse gas) emissions originating from direct combustion (SCOPE 1) came to 11,496 tCO2eq in 2022. Indirect emissions (SCOPE 2) linked to the use of electricity came to 8,844 tCO2eq (calculated using a market-based approach). Total CO2 equivalent emissions were 20,340 tons.

SCOPE 2 EMISSIONS (MB APPROACH)

With regard to natural gas combustion, SACMI saw emissions fall by 10% compared to previous years; diesel-related emissions, instead, increased by 27% while emissions related to electricity consumption fell slightly compared to previous years.

Energy consumption (GJ) Fuels

Unit of measure

2020

2021

2022

Natural gas

181,183

196,198

175,403

Diesel for company fleet

13,196

17,173

21,953

Petrol for company fleet

Total fuels consumed

194,379

213,371

197,364

SACMI

Energy and emissions management

Electricity

Unit of measure 2020

2021

2022

Purchased electricity

60,131

75,932

72,500

of which from non-renewable sources

59,499

74,069

69,736

of which from renewable sources

632

1,862

2,764

Self-generated and consumed elec-tricity

38,187

35,336

38,141

of which photovoltaic

1,453

1,546

1,632

of which from trigeneration plant

36,734

33,790

36,509

Total electricity consumed

98,318

111,268

110,641

Total energy consumption 1

255,962

290,849

271,496

Emissions 2 from direct fuel combustion

Unit of measure 2020

2021

2022

Natural gas

t CO2 eq

10,178

11,021

9,851

Diesel for company fleet

t CO2 eq

988

1,285

1,643

Petrol for company fleet

t CO2 eq

–

0.50

Total energy consumption

t CO2 eq

11,165

12,306

11,496

Indirect emissions

Unit of measure 2020

2021

2022

Market-based approach 3

t CO2 eq

7,546

9,394

8,844

Location-based approach 4

t CO2 eq

4,352

5,496

5,247

Total emissions (MB approach)

t CO2 eq

18,711

21,700

20,340

Total emissions (LB approach)

t CO2 eq

15,517

17,802

16,743

Total energy consumption is calculated by summing the consumption of fuel, purchased electricity and the electricity self-produced with photovoltaic panels. This total does not include the electricity self-produced and consumed by the trigeneration plant because this energy consumption is already accounted for by consumption of the natural gas that powers the plant itself.

2 Emissions factor source: European Residual Mixes "AIB" Agg. 05.31.2022; DEFRA; ISPRA, Greenhouse gas atmospheric emission factors in the national electricity sector and in the main European countries. Edition 2020. n. 317/2020.0. 3 The Market Based approach is a method of calculating CO2 equivalent emissions (tons): it calculates emissions based on the electricity that organizations have chosen to purchase (or selected through lack of choice).. 4 The Location Based approach is a method of calculating CO2 equivalent emissions (tons) based on geographical location. It reflects the average emissions intensity of grids on which energy consumption occurs (using mostly grid-average emission factor data).

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7.3

Management of in-atmosphere polluting emissions

In-atmosphere emissions1 are generated by combustion reactions and specific production processes that occur at Group facilities. Emissions monitoring is regulated through specific authorizations, issued to individual plants. The bulk of emissions are produced by the parent company SACMI Imola. The data closely correlates with effective plant operation, itself a function of manufacturing requirements.

Other significant emissions Fuels

Unit of measure 2020

2021

2022

NOx

8,979

6,958

9,635

Volatile organic compounds (VOCs)

956

1,248

1,203

In-atmosphere particulate (PM)

1,824

2,113

1,562

Other standard categories of atmospheric emissions identified by the relative legislation

6,989

3,158

3,864

Total

18,748

13,476

16,264

Figures are obtained by examining the chemical analysis performed as per authorization requirements, estimating maximum authorized operating hours as a function of individual chimney flow rates. 1

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7.4

Management of water resources

The Group's commitment to the gradual reduction of water consumption continues. In 2022 the parent company SACMI Imola treated more than 20,000 cubic meters of water with the purifier.

Water resources used by SACMI companies within the reporting boundary are mainly attributable to civil use. In fact, only some of the companies within the reporting perimeter use water also for industrial purposes (e.g. SACMI Impianti, SACMI Molds&Dies and SACMI Carpmec). Water is used in industrial processes in, for example, the filtration tank and to reduce overspray on coating plants. In general, using water has no significant environmental impact. In SACMI Imola SC, water is used in production processes or production-related tasks inside the facility. The company’s overall goal is to gradually reduce water consumption. Using specific internal procedures for different company processes, SACMI Imola assesses the impact of water consumption and related discharges and implements improvements where possible (e.g. organizational changes, use of new control technology or measuring instruments, etc.). SACMI Imola uses, in certain manufacturing processes only, water resources as an incoming raw material or accessory. More specifically: • about a third of the water is used to produce emulsified waters, which, in turn, are used to reduce emissions in glazing processes in the Whiteware workshops and the resin department • a third of consumption is accounted for by company rest rooms • another third is accounted for by the industrial water used in plant cooling systems. Water is supplied from three wells authorized by the Emilia-Romagna Region. Further water supplies come from the local utility company through an industrial water pipeline and a drinking water pipeline. Groundwater use is monitored constantly and reported annually to the relevant bodies. The three wells have, in fact, an automatic aquifer level detection system. Water consumption must comply with authorized limits: monitoring is continuous and the data is

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sent to the supervising body. Discharge points on company premises can be divided into four different types, namely: • industrial discharges channeled to public sewers after purification • industrial discharges directly into public sewers • civil discharges • discharges dispersed into the ground through special ponds (rainwater following oil removal and de-sanding, and roof runoff). Industrial discharges channeled into public sewers after purification come from several departments: Ceramic Laboratory, Coating Department, Resin Department and the Whiteware and Modeling Laboratory. Water is sent to an octagonal holding/homogenization tank before being sent to the purification plant from where it is channeled into the public collection network. 188

comes from outdoor yards, rainwater and some refrigeration water. Civil discharge is sent directly into sewage networks that feed into the municipal purification plant; these effluents come from changing rooms, rest rooms and the company canteen (after degreasing). Water dispersed into the ground comes from outdoor yards and building roofs. Runoff from outdoor areas is collected in 3 de-oiling tanks; it is then conveyed, together with roof runoff, to the de-sanding tank and then, by overflow, into a pond for dispersal into the ground. In 2022, the quantity of water treated by the SACMI Imola purifier remained practically unaltered, increasing by just 2% (8,055 m3 against 7,901 m3 in 2021) despite a spike in the hours worked by the departments involved (70,380 hours against 56,799 in 2021).

Industrial waste discharged directly into sewers

Purified waters, SACMI Imola SC (m3) 2020

2021

2022

Cubic meters treated by the SACMI purifier

5,875

7,901

8,055

Hours worked by staff in DEP departments

61,983

56,799

70,380

2020

2021

2022

Water withdrawal

63,390

68,919

73,048

Water discharge

26,315

28,635

31,180

Water consumption

36,875

40,284

41,868

Water consumption1 (m3)

Water consumption has been calculated considering the following: as SACMI TECH was founded at the end of 2020 following the merger by incorporation into In.Te.Sa. di NuovaSIMA and Officina CMC, data is limited to 2021 and 2022; the well used to irrigate the greenery at SACMI Forni & Filter was not included in the calculation as it does not currently have a meter; moreover, for SACMI Forni&Filter, water consumption was calculated on the basis of average daily consumption data provided by the supplier, multiplied by 365; at SACMI Verona an estimated 75% of withdrawn water is discharged.

SACMI

Management of water resources

Water withdrawal (m3) 63,390

68,919

73,048

2020

2021

2022

80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

Overall, in 2022 SACMI companies within the reporting boundary withdrew 73,048 cubic meters of water (73 megaliters), a slight increase (+6%) compared to 2021. Similarly, water discharge also increased compared to the previous year (+9%). On the consumption front, SACMI recorded a 4% increase compared to 2021.

189

More specifically, in 2022 SACMI Imola SC withdrew 56,160 cubic meters of water (56 megaliters), 8% more than in the previous year. Likewise, water discharges also increased compared to 2021 (+27%).

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7.5

190

Circular economy

All Group companies are implementing projects to optimize use of materials, reduce waste and make good use of waste in accordance with the principles of the circular economy. In 2022 the share of ‘retrievable’ waste was nearly 95%.

Materials management The main goal of materials management is to reduce waste and thus optimize the use of both natural and economic resources. For this reason, some companies have already set up systems to ensure accurate material tracking and responsible procurement. SACMI Imola has moved towards materials/waste management systems that adopt models of high ecological efficiency and apply ‘circularity’ concepts to certain waste types. Materials and suppliers are selected in compliance with a sustainable procurement policy. With regard to the waste that stems from machining, a circularity project designed to retrieve and recycle metal chips is expected to be completed during 2023. Since 2022 other companies have implemented more finely targeted projects in order to optimize use of materials and reduce waste in accordance with circular economy principles.

Waste management SACMI produces numerous types of waste, some potentially hazardous. Several SACMI companies engage in experimental work. This can, depending on the machines being tested, lead to large swings in waste output. With regard to current waste production trends, SACMI seek to ensure its proper management and disposal and, subsequently, make it a resource rather than a burden. Some waste is separated out and resold; this reduces both production process residues and the relative management costs.

SACMI

Circular economy

Waste produced by the organization is handled and processed by specifically authorized third parties in compliance with national legislation. All persons in charge of the waste disposal/retrieval process are screened by the organization, which requests the relevant authorizations. For the majority of the companies, waste-related data is gathered using specific software. In 2022, 6,275 tons of waste were produced, most of it (83%) being sent on for recycling or retrieval. The percentage of waste sent on for

disposal was 17%, a decrease of 20% compared to the previous year. In 2022 about 7% less waste was produced compared to 2021. Hazardous waste accounts for about 10% of the total produced. The main types of waste are: oily emulsions, packaging (plastic, paper/cardboard, wood), metal waste in general, waste from machine testing (e.g. ceramic waste, plastic and metal caps, liquid waste from test drinks, etc.), waste

Waste production (tons) 2020

2021

2022

Total weight of waste pro-duced

4,462

6,703

6,275

of which hazardous waste

632

816

627

of which non-hazardous waste

3,830

5,887

5,648

8,000

191

2020 2021

7,000

2022

6,000 5,000 4,000 3,000 2,000 1,000 0 TOTAL WEIGHT OF WASTE PRODUCED (TONS)

OF WHICH HAZARDOUS WASTE

OF WHICH NON-HAZARDOUS WASTE

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Integrated Annual Report 2022

Total waste not directed to disposal (tons) 2020

2021

2022

3,642

5,343

5,181

preparation for reuse

recycling

other retrieval operations

preparation for reuse

recycling

398

481

478

other retrieval operations

3,213

4,815

4,684

3,612

5,295

5,162

2020

2021

2022

821

1,360

1,095

waste disposal facility

other disposal operations

569

683

546

602

768

608

incineration (without generating energy)

waste disposal facility

156

147

183

other disposal operations

444

303

219

592

486

Total waste not directed to disposal Hazardous waste not directed to disposal, sub-divided by:

Total hazardous waste not directed to disposal Non-hazardous waste not directed to disposal, sub-divided by:

192

Total non-hazardous waste not directed to disposal

Waste directed to disposal (tons)

Total waste directed to disposal Hazardous waste directed to disposal, by management method:

Total hazardous waste directed to disposal Non-hazardous waste directed to disposal, by management method:

Total non-hazardous waste not directed to disposal

SACMI

from maintenance work at production facilities. During 2022, SACMI received no sanctions of any kind for non-compliance with environmental regulations. Henceforth, there was no recourse to dispute resolution systems. The same applies for the previous two-year period. At the parent company, SACMI Imola, most of the non-recoverable waste produced consists of oily emulsions. Since this waste comes from the machine tools in the plant, the total quantity is strongly influenced by production patterns. For some years now SACMI Imola has been running a project to reduce such waste by optimizing production: this reduces the quantity of pure oil consumed and extends the lifespan of the emulsion. During 2022, these actions led

Circular economy

to a significant drop in the production of oily emulsions (approximately 426 tons compared to 504 in 2021), despite an increase in the number of working hours in the company's machining departments (approximately 266,000 hours against 253,000 in 2021).

193

The chapter illustrates the performance of those companies within the reporting boundary, with the following exceptions: 1. Defranceschi S.r.l. is omitted from the reporting boundary for matters relating to water resource management.

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Methodological note

194

For the fiscal year ending 31st December 2022, the SACMI Group has decided to draw up an Integrated Annual Report to render its disclosure of non-financial performance even more transparent. This document aims to transparently inform stakeholders of achieved results and share future goals with them. It aims to promote continuous comparison and improvement, providing an all-round view of the Group’s economic-financial and sustainability performance. The principles of reciprocal assistance, both internal and external, have been part of SACMI's DNA ever since its founding. Year after year, these principles take the form of practical action: from projects designed to safeguard the environment and enhance skills, to those that seek to provide new opportunities for communities both locally and internationally in the countries where the Group operates. Given the fast-changing nature of sustainability standards, as of this year the SACMI Group, with the drawing up of its first Group Integrated Annual Report, aims to take a path that ensures further improvements in relevant reporting prac-

tices. This move is designed to ensure increasingly higher quality and an appropriate strategic direction for its products; over the coming years the aim is to develop annual non-financial reporting and integrate it with the Consolidated Financial Statements to establish a starting point for further ESG activities. Since 2018, SACMI has published an Integrated Annual Report that combines the reporting of Group results, broken down into the various Business areas, with analysis of the sustainability performance of the parent company, SACMI Imola SC. As of 2022, the expansion of the reporting perimeter involves almost all the Italian companies in the SACMI Group, the goal being to extend it to the entire Global Network in the coming years.

Reporting boundary and period Data and performance reported therein refer to the fiscal year from 01/01/2022 to 12/31/2022 and are published annually in a document that separates it from financial information. Similarly, the items covered are presented in a way that ensures, as far as is possible, comparison with the

For a complete list of companies included in the reporting boundary please refer to the following section.

SACMI

Methodological Note

SACMI Imola Sc

Euroelettra Srl

Protesa SpA

Tecnos Srl

ItalianSped SpA

SACMI Impianti SpA

Iprel progetti Srl

SACMI Carpmec SpA

Defranceschi Srl

SACMI Packaging & Chocolate SpA

GAIOTTO Automation SpA

SACMI Forni & Filter SpA

SACMI Tech SpA

SACMI Verona SpA

SACMI Molds & Dies SpA

SACMI Beverage SpA

illustrates the performance of those companies within the reporting boundary, with the following exceptions:

previous two-year period so that all stakeholders can assess performance over time. Unless otherwise specified, the data/information in this Report refer to the reporting boundary that includes the above-listed SACMI Group companies, hereafter referred to as “SACMI Group or Group”: •

•

The section on ‘Responsible governance and value creation’ covers the SACMI Group's strategic guidelines and illustrates how the governance bodies of the parent company, SACMI Imola SC, operate. The ‘Innovation and Research’ section describes the performance of all SACMI Group companies, with the exception of patent-related costs and the data in the ‘R&D resources and projects’ which refer exclusively to SACMI Imola SC. In the ‘Wealth generated and distributed’ section the information refers only to the performance of the parent company, SACMI Imola SC. Data relating to economic value generated and distributed in 2020-2021 is subject to restatement. The section on ‘Suppliers’ shows how the entire Group has performed vis-à-vis qualitative data linked to corporate procedures and processes (while quantitative data refers to SACMI Imola SC only). The ‘Social Performance’ chapter illustrates the performance of those companies within the reporting boundary. The ‘Environmental Performance’ chapter

•

Defranceschi S.r.l. is omitted from the reporting boundary for matters relating to water resource management. Information on materials obtained from recycling concerns only Carpmec S.p.A., Sacmi Verona S.p.A., Defranceschi S.r.l and Protesa S.p.A.

Lastly, data and information contained in the ‘Letter from the President’ and ‘The SACMI Group’ chapter refer to the entire SACMI Global Network (for a list of companies see ‘SACMI around the world’).

Scope of the report The Annual Report has been drawn up as per the GRI Sustainability Reporting Standards (GRI Standards) issued in 2016 by the Global Reporting Initiative and subsequent amendments; such guidelines constitute the most widely used sustainability reporting standard at international level, as per the ‘In accordance with’ accounting option. The Report is drawn up according to the principles in GRI 1 Foundation, which defines the content and quality of the reporting: • accuracy, so that the reported information is sufficiently detailed to allow assessment of

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•

• •

• 196

•

the organization’s impact. complete, balanced information in order to represent the Company's sustainability performance in the most appropriate way and ensure the document offers a balanced view of both positive and any negative aspects. clarity of the way the gathered quantitative data and qualitative information is processed and presented, and of the underlying data/info calculation methods, thus allowing all stakeholders to make an objective, sufficiently complete appraisal of performance. comparability of data and information over time by using a three-year timescale. timeliness of the drafting and publication of the Annual Report, which will be on an annual basis in conjunction with the approval of the Financial Statements. verifiability, i.e. the implementation of a process of recording, compiling and analyzing information in a way that ensures the information provided is of a certain quality. sustainability context, presentation of the sustainability context in a broad and comprehensive manner (economic, social and environmental impacts at local, regional or global level).

The Annual Report is not subject to auditing by any third party.

Contacts and addresses Should you wish to make any comments or requests or offer any opinions or suggestions regarding this Annual Report please write to sostenibilita@sacmi.it. The Annual Report is available on the website: www.SACMI.com.

SACMI IMOLA S.C. Via Provinciale Selice 17/A, 40026 Imola (BO), Italy - Tel. +39 0542 607111

SACMI

Methodological Note

197

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GRI Content Index Statement of use

The SACMI GROUP has drawn up this non-financial information in accordance with the GRI Standards for the period from 01.01.2022 to 31.12.2022

GRI 1

GRI 1: Foundation 2021

GRI Sector Standard(s) applicabile

GRI SUSTAINABILITY REPORTING STANDARD

CHAPTER/PARAGRAPH REFERENCE

PAG.

GENERAL DISCLOSURES

198

GRI 2: General Disclosures 2021

2-1

Organizational details

1. The SACMI Group

14-21

2-2

Entities included in the organization’s sustainability reporting

Methodological Note

194-196

2-3

Reporting period, frequency and contact point

Methodological Note

194-196

2-4

Restatements of information

Methodological Note

194-196

2-5

External assurance

Methodological Note

194-196

2-6

Activities, value chain and other business relationships

1. The SACMI Group

14-21

2-7

Employees

6.1 Our people

146-163

2-8

Workers who are not employees

6.1 Our people 6.2 Cooperative membership

146-165

2-9

Governance structure and composition

2.1 Governance and organization

94-95

2-10

Nomination and selection of the highest governance body

2.2 Governing bodies

96-101

2-11

Chair of the highest governance body

2.2 Governing bodies

96-101

2-12

Role of the highest governance body in overseeing themanagement of impacts

2.2 Governing bodies

96-101

2-13

Delegation of responsibility for managing impacts

2.2 Governing bodies

96-101

2-14

Role of the highest governance body in sustainability reporting

2.2 Governing bodies

96-101

2-15

Conflicts of interest

2.3 Business integrity and control systems

102-105

2-16

Communication of critical concerns

2.1 Governance and organization

94-95

2-17

Collective knowledge of the highest governance body

2.1 Governance and organization

94-95

2-18

Evaluation of the performance of the highest governance body

2.2 Governing bodies

96-101

2-19

Remuneration policies

6.1 Our people

146-163

2-20

Process to determine remuneration

6.1 Our people

146-163

2-21

Annual total compensation ratio *

6.1 Our people

146-163

2-22

Statement on sustainable development strategy

Letter from the President

4-10

2-23

Policy commitments

2.1 Governance and organization

94-95

SACMI

GRI Content Index

2-24

Embedding policy commitments

2.1 Governance and organization

94-95

2-25

Processes to remedy negative impacts

2.1 Governance and organization

94-95

2-26

Mechanisms for seeking advice and raising concerns

2.1 Governance and organization

94-95

2-27

Compliance with laws and regulations

2.3 Control and certification systems

102-105

2-28

Membership associations

3.3 Partnerships

118-121

2-29

Approach to stakeholder engagement

1. The SACMI Group/Dialogue with stakeholders and materiality analysis

20-25

2-30

Collective bargaining agreements

6.1 Our people

146-163

3-1

Process to determine material topics

1. The SACMI Group/Dialogue with stakeholders and materiality analysis

20-25

3-2

List of material topics

1. The SACMI Group/Dialogue with stakeholders and materiality analysis

20-25

201-1

Economic value generated and distributed directly

4.1 Wealth generated and distributed

132-133

202-2

Proportion of senior management hired from thelocal community

6.1 Our people

146-163

204-1

Proportion of spending on local suppliers

5 Suppliers

138-143

MATERIAL TOPICS

GRI 3: Material topics 2021

GRI 201: Economic performance 2016 GRI 202: Market presence 2016 GRI 204: Provisioning practices 2016

CONTRASTING CORRUPTION GRI 3: Material topics 2021

3-3

Material topics management approach

2. Responsible governance and value creation

92-105

GRI 205: Anti-corruption 2016

205-2

Communication and training about anti-corruption policies and procedures

2.3 Business integrity

102-105

GRI 206: Anticompetitive behavior 2016

206-1

Legal actions for anti-competitive behavior, anti-trust, and monopoly practices

2.3 Business integrity

102-105

207-1

Approach to taxation

4.2 Approach to taxation

134-135

207-2

Tax governance, control, and risk management

4.2 Approach to taxation

134-135

207-3

Stakeholder engagement and management of concernsrelated to tax

4.2 Approach to taxation

134-135

207-4

Country-by-country reporting

4.2 Approach to taxation

134-135

3-3

Material topics management approach

7.5 Circular economy

190

3-3

Material topics management approach

7.1 Management of environmental impact

176

302-1

Energy consumption within the organisation

7.2 Energy and emissions management

177-183

302-4

Reduction of energy consumption

7.2 Energy and emissions management

177-183

GRI 207: Tax 2019

MATERIALS MANAGEMENT GRI 3: Material topics 2021

ENERGY EFFICIENCY GRI 3: Material topics 2021 GRI 302: Energy 2016

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GRI 303: Water and effluents 2018

303-1

Interactions with water as a shared resource

7.4 Management of water resources

187-189

303-2

Management of water discharge-related plants

7.4 Management of water resources

187-189

303-5

Water consumption **

7.4 Management of water resources

187-189

ENVIRONMENTAL RESPONSIBILITY GRI 3: Material topics 2021

GRI 305: Emissions 2016

3-3

Material topics management approach

7.1 Management of environmental impact

305-1

Direct GHG emissions (Scope 1)

7.2 Energy and emissions management

177-183

305-2

Indirect GHG emissions from energy consumption (Scope 2)

7.2 Energy and emissions management

177-183

305-7

Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions

7.3 Management of inatmosphere polluting emissions

185

3-3

Material topics management approach

7.1 Management of environmental impact

176

306-1

Waste generation and significant wasterelated impacts

7.5 Circular economy

190

306-2

Management of significant waste-related impacts

7.5 Circular economy

190

306-3

Waste generated

7.5 Circular economy

190

306-4

Waste diverted from disposal

7.5 Circular economy

190

306-5

Waste directed to disposal

7.5 Circular economy

190

308-1

New suppliers that were screened using environmental criteria

5. Suppliers

138-143

176

CIRCULAR ECONOMY GRI 3: Material topics 2021

GRI 306: Waste 2020 200

GRI 308: Supplier environmental assessment 2016

WORKING CONDITIONS, INTERNAL ‘CLIMATE’ AND WELFARE GRI 3: Material topics 2021

3-3

Material topics management approach

6.1 Our people

146-163

401-1

New employee hire and employee turnover

6.1 Our people/Composition and characteristics

146-149

401-2

Benefits provided to full-time employees that are not provided to temporary or part-time employees

6.1 Our people/Composition and characteristics

146-149

402-1

Minimum notice periods regarding operational changes

6.1 Our people/Corporate benefits and welfare

156-158

GRI 401: Employment 2016

GRI 402: Labor/ management relations 2016

WORKPLACE HEALTH AND SAFETY GRI 3: Material topics 2021

GRI 403: Occupational health and safety 2018

3-3

Material topics management approach

6.1 Our people

146-163

403-1

Occupational health and safety management system

6.1 Our people/Health and safety

158-161

403-2

Hazard identification, risk assessment and incident investigation

6.1 Our people/Health and safety

158-161

403-3

Occupational health services

6.1 Our people/Health and safety

158-161

403-4

Worker participation, consultation, and communication on occupational health and safety

6.1 Our people/Health and safety

158-161

403-5

Worker training on occupational health and safety

6.1 Our people/Health and safety

158-161

SACMI

GRI Content Index

403-6

Promotion of worker health

6.1 Our people/Health and safety

158-161

403-7

Prevention and mitigation of occupational health and safety impacts directly linked by business relationships

6.1 Our people/Health and safety

158-161

403-9

Work-related injuries ***

6.1 Our people/Health and safety

158-161

GRI 3: Material topics 2021

3-3

Material topics management approach

6.1 Our people

146-163

GRI 404: Training and education 2016

404-1

Avge hours of training per year per employee

6.1 Our people/Skills development

149-155

RESOURCE TRAINING

WORKING CONDITIONS, INTERNAL ‘CLIMATE’ AND WELFARE GRI 3: Material topics 2021

3-3

Material topics management approach

6.1 Our people

146-163

GRI 405: Diversity and equal opportunities 2016

405-1

Diversity in management and among employees

6.1 Our people/Composition and characteristics

146-149

GRI 406: Nondiscrimination 2016

406-1

Incidents of discrimination and corrective actions taken

6.1 Our people/Composition and characteristics

146-149

GRI 407: Freedom of association and collective bargaining 2016

407-1

Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

6.1 Our people/Composition and characteristics

146-149

GRI 408: Child labor 2016

408-1

Operations and suppliers at significant risk for incidents of child labor

5. Suppliers

138-143

GRI 409: Forced or compulsory labor

409-1

Operations and suppliers at significant risk of forced or compulsory labor

5. Suppliers

138-143

GRI 414: Supplier social assessment 2016

414-1

New suppliers that were screened using social criteria

5. Suppliers

138-143

GRI 416: Customer health and safety 2016

416-1

Assessment of the health and safety impacts of product and service categories

6.3 Customers

166-168

Material topics management approach

6.4 Involvement in local communities

170-173

Material topics management approach

2.3 Business integrity and control systems

102-105

6.1 Our people

146-163

RELATIONS WITH THE COMMUNITY GRI 3: Material topics 2021

3-3

STANDARDS/CODE OF ETHICS GRI 3: Material topics 2021

3-3

PARTNERSHIPS WITH SCHOOLS AND UNIVERSITIES GRI 3: Material topics 2021

3-3

Material topics management approach

* Requisites omitted: a, b, c. Reason: information unavailable. Explanation: SACMI undertakes to report the information relating to the ratio between the annual payments in the coming years. ** Requisites omitted: b. Data is expressed in cubic meters to allow for greater clarity. Reason: information unavailable. Explanation: information on water-stressed area is unavailable for this current reporting year. *** Requisites omitted: b. Reason: information unavailable. Explanation: Note that data relative to workers who are not employees has not been reported. Next year SACMI shall undertake to detail the types of injuries that occurred.

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201

Integrated Annual Report 2022

204

Coordination SACMI External Relations Design Momic Printed by Modulgrafica Forlivese Translation Steve Davies

ENDLESS INNOVATION SINCE 1919

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