Somec S p A : Intermonte Roadshow - Milano, 17 aprile 2024

FY 2023 RESULTS

Intermonte Roadshow Milan, 17 April 2024

1. COMPANY OVERVIEW
2. FY2023 FINANCIAL HIGHLIGHTS ANNEX

SOMEC GROUP

IS ONE OF THE WORLD'S

LEADING EXPERTS IN THE

CONSTRUCTION OF COMPLEX

TURNKEY PROJECTS

30 companies specialising in the engineering, design and deployment of complex turnkey projects in civil and naval sectors. A group of excellences operating in an integrated

and synergetic manner, according to strict quality and safety standards while guaranteeing a high level of customisation and specific know-how on the processing of different materials, a key requirement when delivering high value-added projects.

In over 40 years of history, the Group's footprint spans

12 countries and 3 continents, employing more than 1,000 people. Somec has been listed on the Italian Stock Exchange since 2018.

We are loyal and reliable	We are the hub of Italian	We are a group that strongly
partners of excellence,	construction quality,	believes in freedom as a key
thanks to project management	an aggregator (company	value enjoyed by every
and engineering capability,	and knowledge) of all those	individual, be it an engineer,
expertise in materials and	extraordinary skills recognised	specialist technician or craftsman,
the craftsmanship used	around the world for complex	to continually seek out innovative
to realise projects.	and highly specialised	solutions and processes,
	construction projects.	which characterise every project
		in order to facilitate the most
		successful outcome.

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A WORLD OF COMPANIES

specialising in three macro segments

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FROM LOCAL COMPANY TO INTERNATIONAL GROUP

1978

Year of foundation

2013

Oscar Marchetto acquires the majority stake of Somec.

Giancarlo Corazza and

Alessandro Zanchetta, members of the board,

become shareholders

1993

Somec enters the

marine glazing business

2016-17

Somec enters the business of marine and professional

kitchen equipment with

the acquisition of Oxin and Inoxtrend

At the same time, Somec creates Hysea, entering the

business of marine interiors

2005

The company adds another challenging business:

the marine refitting

2018

Somec is listed on the

Italian stock exchange (AIM)

Somec acquires Fabbrica, entering the building façades

business in the US

2019-21

Somec has become a Group and continues its expansion

strategy through the

acquisitions of TSI, Gico, Primax, Pizza Group, Skillmax

and launches Fabbrica Works

2022	2023
Somec acquires Bluesteel and, as		Somec continues its
an extension of its luxury		business and geographic
interiors and architectural		diversification strategy
elements division, establishes
Mestieri and completes the		Somec acquires Gino Ceolin,
acquisition of Budri and Lamp		through its direct
Arredo		subsidiary Mestieri
It strengthens its presence
in the United States by
creating Pizza Group USA
and Mestieri USA	5

PROJECT CYCLE

The operation model is common to all of Somec Group's business areas and sets itself apart thanks to the development of original systems and the in-house management of the entire production process. As a result, Somec Group differs

from the majority of those competitors who only operate as contractors and do not manufacture.

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PRE-SALES

The most complex phase,

which includes references, preliminary engineering

with the analysis of customised

solutions for each design specification, a quotation, and an implementation schedule.

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SELECTING MATERIALS	INSTALLATION
Somec Group works	With more than 300 major
with different materials	projects delivered, tested
depending on the sector.	and approved, Somec Group
The sourcing, selection,	is a reliable provider of installed
negotiation, ordering and	turnkey solutions.
receiving of materials such
as items in aluminium, glass,
steel, timber or marble are the
key to imaginative customisation.

A Group of companies with strong common

points and synergies.

In-house designing and manufacturing enable the

exploitation of deep synergies and put the Group in the leading

side of the high-end segment of the markets.

6 phases are common

to all of the Group's orders,

in line with a continuous

cycle of improvement led

by management and directed at margins and scalability.

The marine and civil engineering DNA that has

formed in some companies

over years of accreditation and complexity, assists Somec

Group in being a reliable partner in new projects.

DESIGN

The solutions formulated

in the pre-sales phase are designed in detail, completing the customisation and reducing complexity.

Somec Group plays a crucial role in finding common ground between stakeholders in the project

i.e. architects, customers and general contractors.

PRODUCTION

With numerous production facilities and material processing plants close to installation sites, production easily meets

agreed delivery timescales. Every component is made using a customised approach and

produced to the utmost perfection.

AFTER-SALES

In whichever market

Somec Group is operating, refits on completed works and scheduled maintenance are part of every order cycle.

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6

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INTERNATIONAL PRESENCE

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BUSINESS MODEL RISK & OPPORTUNITIES

RISKS

SUPPLY CHAIN & INFLATION

• • • Increasing in raw materials cost and shortage
  • Geopolitical crisis, pandemics and climate risks
  • • Transport, logistic and planning issues
• Currency exchange rates (USD) and interest rates

ORDER EXECUTION

• • Additional costs and charges related to orders for the execution, in particular for installations
  • • Failure in recognition of variations from the client
• Risk of delays in the execution of the works or failure to achieve the contractual quality and quantity standards

OPPORTUNITIES

MARKET OPPORTUNITIES

• Increasing in demand in the naval segment. In 2023, 33 million of passengers compared to 19 million in 2019 (considered a record year)
• Stabilization of raw material and energy cost
• Development in the US market of luxury

IMPROVEMENT OF THE OPERATIONAL MODEL

• Long-termorder visibility with rapid response during the execution
• Fragmentation of risk with reduced customer contraction thanks to the diversification on the operational segments
• Enforcement of financial management control and internal reorganization
• Increasing in demand in Mestieri operational segment moving to a strong contribution from the civil interior especially in the US market
• Focus on new orders and activities with high-marginality

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1. COMPANY OVERVIEW
2. FY2023 FINANCIAL HIGHLIGHTS ANNEX

NON-RECURRING EVENTS

MAIN IMPACTS ON GROUP'S PROFITABILITY IN 2023

THE CONTEXT

• TSI project worth 14 million, concluded in the last quarter of 2023 concerning the design, production and installation of various types of private and common areas in a cruise ship
• Existing order at the time of the acquisition of TSI, contracted by the previous management
• Critical issues during the execution in the last quarter of 2023 with a consequent compression of installation times; and a negative impacts on the quality of the product acquired and on the performance of the installation on board

• Bluesteel (acquired in 2022 to enter the UK market) operating in the market of glazing sector, was revised, in conjunction with the closure of the year, some positive variations recorded on a contract signed in 2019 (prior the acquisition) & completed in 2023
• An adjudication procedure has been established for the issue's resolution of the dispute

IMPACT

• Shifting from a 'standard contract' to a 'tailor- made contract' with a consequent increase in raw material costs and costs related to the installation and finalisation of the work (e.g. personnel costs)
• Contraction of work (2 months vs 6 months) due to delays in the shipyard led to a negative impact on the quality of the work resulting in client's final remarks
• Increasing in overall cost of 4.5 €mln

• Total impact of this project is -1.0€mln

ACTION UNDERTAKEN & FUTURE RISK MITIGATION

• Reorganization of the subsidiary, with new qualified management leading the operations
• Improvement on group cost control of the existing orders on a proper timely basis
• No more orders contracted prior the acquisition of the subsidiary, to be executed, focusing on new orders and activities with high-margin according to Somec operation model

• New organisational structure
• No more backlog referred to orders contracted by the previous management.

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