Biesse S p A : QUARTERLY REPORT AT 31 MARCH 2024

Quarterly Report as at 31 March 2024

Biesse S.p.A.

QUARTERLY REPORT AS AT 31 MARCH 2024
THE BIESSE GROUP	3
BIESSE GROUP STRUCTURE	3
BIESSE GROUP PROFILE	4
INTRODUCTION	4
ALTERNATIVE PERFORMANCE INDICATORS	4
FINANCIAL HIGHLIGHTS	5
COMPOSITION OF CORPORATE BODIES	8
DIRECTORS' REPORT ON OPERATIONS	9
GENERAL ECONOMIC OVERVIEW	9
BUSINESS SECTOR REVIEW	11
OUTLOOK	12
MAIN EVENTS	13
INCOME STATEMENT	14
STATEMENT OF FINANCIAL POSITION	16
SEGMENT REPORTING	17
CERTIFICATION PURSUANT TO ARTICLE 154-BIS, PARAGRAPH 2 OF THE CONSOLIDATED LAW ON FINANCE
(TUF)	18

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THE BIESSE GROUP

BIESSE GROUP STRUCTURE

The following companies belong to the Biesse Group and are included in the scope of consolidation:

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BIESSE GROUP PROFILE

The Biesse Group is an international manufacturer of integrated lines and machines for the processing of wood, glass, stone, plastics and composites. Founded in Italy in 1969 and listed on the Euronext STAR segment of the Italian Borsa Italiana stock exchange, the Group supports the business development of its customers in the furniture, supply & construction, automotive and aerospace sectors. Today, about 80% of consolidated revenues are made abroad thanks to a constantly growing global network with 12 production sites and more than 20 showrooms worldwide. Thanks to the expertise of our 4,400 employees, we inspire leading companies in their sectors and the most respected names in Italian and international design to unlock the potential of every material.

With respect to the consolidated financial statements for the year ended 31 December 2023, it should be noted that on 29 January 2024, the acquisition of the entire share capital of GMM Finance S.r.l., the holding company at the head of the GMM Group, which includes the companies GMM S.p.A., Bavelloni S.p.A. and Techni Waterjet Ltd., as well as their respective Italian and foreign subsidiaries, active in the fields of machine tools for processing stone, glass and other materials, was completed.

Therefore, the Biesse Group's economic and financial situation at 31 March 2024 is affected by the line-byline consolidation of the GMM Group. For consolidation purposes, the accounting acquisition date was assumed to be 1 January 2024; The first-time consolidation balance sheet is therefore represented by the GMM Group's balances as at 31 December 2023, the reference date for the 'Purchase Price Allocation' (PPA) process required by IFRS 3. IFRS 3 requires that at the acquisition date, the difference between the cost of the combination - equal to the provisional price paid for the acquisition - and the fair value of the identifiable net assets acquired, including contingent liabilities, be determined. As at 31 March 2024, the allocation of the cost of the combination illustrated above (PPA) is still to be considered provisional; pursuant to IFRS 3, the accounting for business combinations can be finalised within twelve months from the date of acquisition. Assuming the net assets of the acquired Group as an expression of the net fair value of the assets and liabilities acquired, a positive consolidation difference emerged due to the provisional price of € 69 million. This difference, provisionally determined, is recorded as 'goodwill' in the asset item of the consolidated balance sheet and reclassified under 'Intangible Assets'. In line with the provisions of IFRS 3, the aforementioned difference and, more generally, the publicly disclosed balance sheet and income statement will be subject to restatement once the fair value of the assets and liabilities acquired has been definitively determined.

INTRODUCTION

The Biesse Group's consolidated quarterly report as at 31 March 2024, unaudited, has been prepared pursuant to Article 154-ter, paragraph 2 of the Consolidated Law on Finance and in accordance with the recognition and measurement criteria established by the International Financial Reporting Standards (IFRS).

Accounting standards and recognition criteria are consistent with those of the Financial Statements as at

31 December 2023, to which reference should be made. Furthermore, it should be noted that:

• the quarterly financial statements have been prepared using the discrete approach, according to which the reference period is considered to be a discrete accounting period. In this respect, the income statement items for the period are recognised in the quarterly income statement on an accruals basis;
• the financial statements underlying the consolidation process are those prepared by subsidiaries with reference to the period ended 31/03/2024, adjusted, where necessary, to align them with the Group's accounting policies.

ALTERNATIVE PERFORMANCE INDICATORS

Management uses some performance indicators, which are not identified as accounting measures under the IFRS (non-GAAP measures), to better assess the Biesse Group's performance. The criterion applied by the Biesse Group to set these indicators might not be the same as that adopted by other groups, and the indicators might not be comparable with those set by the latter. These performance indicators, which were set in compliance with the Guidelines on performance indicators issued by ESMA/2015/1415 and adopted by CONSOB with its communication No. 92543 of 3 December 2015, refer to performance in the accounting period covered by this Annual Report on Operations and the previous year used for comparison.

Performance indicators are to be regarded as complementary to and not a substitute for financial data prepared in accordance with IFRS. Hereafter is a description of the main indicators adopted.

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• Adjusted EBITDA (Adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation): this indicator is defined as the Profit (Loss) for the period before income taxes, finance income and expense, exchange rate gains and losses, amortisation of intangible assets, depreciation of property, plant and equipment, impairment losses on fixed assets, allocations to provisions for risks and charges, as well as costs and revenues arising from transactions that Management considers as non-recurringrelative to the Biesse Group's ordinary operations.
• Adjusted EBIT (Adjusted Earnings Before Interest and Taxes): this indicator is defined as the Profit (Loss) for the year before income taxes, finance income and expense, exchange rate gains and losses, impairment losses on fixed assets, as well as costs and revenues arising from transactions that Management considers as non-recurringrelative to the Biesse Group's ordinary operations.
• Operating Profit or EBIT (Earnings Before Interest and Taxes): this indicator is defined as Profit (Loss) for the year before income taxes, financial income and expenses, and foreign exchange losses and gains.
• Net Operating Working Capital: this indicator is calculated as the total of Inventories, Trade receivables and Contract assets, net of Trade payables and Contract liabilities.
• Net Invested Capital: this indicator represents the total of Current and Non-Current Assets, excluding financial assets, net of Current and Non-Current Liabilities, excluding financial liabilities.
• Net financial position: this indicator is calculated in compliance with the provisions contained in Communication No. 5/21 of 29 April 2021 issued by Consob, which refers to the ESMA Recommendations of 4 March 2021.

FINANCIAL HIGHLIGHTS

	31 March	% on	31 March	% on	Change %
	2024	sales	2023	sales
Euro 000's
Revenue from sales and services	195.801	100,0%	209.515	100,0%	(6,5)%
EBITDA adjusted(1)	16.801	8,6%	27.969	13,3%	(39,9)%
EBIT adjusted (1)	7.648	3,9%	16.464	7,9%	(53,5)%
EBIT (1)	6.614	3,4%	18.401	8,8%	(64,1)%
Net result	2.847	1,5%	12.330	5,9%	(76,9)%

Ebitda margin adjusted

15.0%

10.0%13.3%

8.6%

5.0%

0.0%

03/24 03/23

Ebit margin adjusted

8.0%

6.0%

7.9%

4.0%

3.9%

2.0%

0.0%

03/24 03/23

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Statement of Financial Position

31 March		31 December
2024		2023
Euro 000's
Net invested capital (1)	264.506	168.495
Equity	266.808	261.448
Net financial position (1)	2.302	92.953
Net operating working capital (1)	84.024	41.682
Order in take	297.448	282.320

1. The criteria for determining amounts relating to interim results and aggregate equity and financial data are described in the
   Directors' Report on Operations and the Notes to the Financial Statements.

Euro 000's

Net Financial Indebtedness

100 80

1. 93.0

20	2.3
0
12/23	03/24

Euro 000's

Net Operating Working Capital

100
80
60	84.0

1. 41.7

0

12/23

03/24

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Personnel (*)

	31 March	31 December
	2024	2023
Number of employees at period end	4,274	3,924

Number of employees

4,400
4,200
4,000				4,274
4,120	4,072
	3,965	3,924
3,800
3,600
03/23	06/23	09/23	12/23	03/24

• includes agency workers.

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COMPOSITION OF CORPORATE BODIES
Board of Directors
Chairman	Roberto Selci
Chief Executive Officer	Massimo Potenza
Non-executive director	Alessandra Baronciani
Lead Independent Director	Rossella Schiavini
Independent Director	Massimiliano Bruni
Independent Director	Federica Ricceri
Independent Director	Cristina Sgubin
Board of Statutory Auditors
Chairman	Paolo De Mitri
Standing Statutory Auditor	Giovanni Ciurlo
Standing Statutory Auditor	Benedetta Pinna
Alternate Statutory Auditor	Silvia Muzi
Alternate Statutory Auditor	Maurizio Gennari
Control, Risks and Sustainability Committee
Rossella Schiavini (Chairman)
Federica Ricceri
Massimiliano Bruni
Remuneration Committee
Federica Ricceri (Chairman)
Rossella Schiavini
Related-Party Transactions Committee
Rossella Schiavini (Chairman)
Cristina Sgubin
Independent Auditors
Deloitte & Touche S.p.A.

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DIRECTORS' REPORT ON OPERATIONS

GENERAL ECONOMIC OVERVIEW

GLOBAL ECONOMIC TREND

Global economic growth moderated at the turn of the year, as the tightening of monetary policy was transmitted to the economy. Globally, real GDP growth is estimated to have declined to 0.8 per cent in the fourth quarter of 2023 from 1.0 per cent in the third quarter, and overall economic activity is estimated to have increased by 3.5 per cent in 2023, i.e. a trend similar to the previous year and the average growth rate observed over the past decade. The latest available data suggest that global consumption growth is moderating, as the positive factors affecting consumer spending gradually fade away. Relative tensions in labour markets remain, although gradually easing in the major advanced economies, as evidenced by the decline in the ratio of available jobs to unemployment, while nominal wage growth is also gradually declining. In addition, excess savings reserves accumulated during the pandemic were largely used up. In February, the global composite Purchasing Managers' Index (PMI) rose slightly, as a result of expanding activity in both the manufacturing and services sectors; this signal should, however, be considered in the light of a broader set of updated data, which continue to indicate an overall contraction in global activity. The slight slowdown in growth this year reflects the fact that the positive factors that had underpinned consumer spending in the advanced economies in the post-pandemic period continue to fade. The effects of past monetary policy tightening as well as high uncertainty due to geopolitical tensions contributed to these developments. Overall, real GDP growth worldwide is projected to be 3.2 per cent both in the current year and in the period 2025-2026, which is slightly lower than the level observed in the last decade. Compared to the projections of December 2023, world growth for the current year has been revised upwards, mainly due to the carry-over effect of the improved US performance. The disruptions in maritime transport in the Red Sea could act as a brake on the recovery of global trade in goods, although their impact at present is considered limited. Transit volumes through the Red Sea have dropped significantly, as shipping companies are avoiding that stretch of sea, diverting their vessels to the route around the Cape of Good Hope. So far, however, global supply chains on the whole have remained strong: in the current year, delivery times of suppliers lengthened only slightly on a global scale, remaining in line with historical averages and well below the levels observed in 2021 and 2022, when global supply chains were under severe strain. Several mitigating factors are at play; firstly, the unused transport capacity seems large, in a context where worldwide demand for goods is relatively modest and the merchant fleet has seen an increase in size. Secondly, port congestion levels around the world remain largely unchanged, indicating the existence of sufficient capacity to accommodate diverted ships. Finally, large inventories in the manufacturing sector are helping to cushion the impact of longer lead times on production. However, risks to inflation and international trade will persist if the turmoil in the Red Sea intensifies and proves to be long- lasting.

UNITED STATES

Growth in the US remains solid, but is expected to weaken in the current year. High-frequency indicators, such as consumer confidence and retail sales, provide mixed signals on consumer spending in early 2024, after the good results achieved in the fourth quarter of 2023. The increase in consumer credit defaults indicates that household budgets are under increasing pressure, with the relative savings rate at a low level of 4 per cent. The restrictive monetary policy stance of the Federal Reserve System also continues to exert negative effects on economic activity. Labour market conditions, while remaining tight in historical terms, are gradually easing and wage growth has declined slightly, albeit still at a high level. Headline inflation measured by the CPI fell slightly in January to 3.1 per cent, due to energy prices, while 12-month core inflation remained stable at 3.9 per cent. The prices of essential services recovered, mainly due to a new acceleration of the non-housing components. A sector-by-sector breakdown of personal consumption expenditure (PPS) inflation shows the effective transmission of the Federal Reserve's monetary policy during the current tightening cycle, with interest rate-sensitive sectors showing a larger decline than those not affected.

JAPAN

In Japan, real GDP fell unexpectedly in the last quarter of 2023. Economic activity declined again in the fourth quarter by 0.1 per cent, following the downwardly revised 0.8 per cent contraction observed in the third quarter. This reflects the relatively generalised weakness of domestic demand. Growth is likely to turn positive in early 2024, supported by higher values of survey indicators, especially for the service sector, and rising consumer confidence. Overall 12-month inflation in January 2024 stood at 2.2 per cent, higher than market expectations, but lower than the levels observed towards the end of last year. The cooling of headline inflation mainly reflects the development of the food component and the decrease in energy prices. Core inflation measured by the CPI in January also declined, to 2.6 per cent, from 2.8 in December.

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UNITED KINGDOM

In the UK, economic activity declined again in the fourth quarter. Real GDP growth in the fourth quarter surprised on the downside, falling from -0.1 per cent to -0.3 per cent compared to the previous quarter. This contraction was driven by a drop in net trade, which in turn was due to a marked decline in exports of services. Negative results also affected private consumption and public spending, the latter as a result of the fallout from recurring strikes in the public sector. The composite PMI index, retail sales and confidence indicators all continued to rise in January 2024, signalling a recovery in UK growth performance: lower financing costs, rising real disposable income and a resilient labour market support domestic demand. In the labour market, tensions are gradually easing, although they remain intense by historical comparison. Vacancies have decreased, but the degree of rigidity in the labour market, measured in terms of vacancies per non-employed worker, remains higher than historical averages. The latest private earnings data suggest that nominal wage growth fell to 6.2 per cent in the three months to December, down from 6.6 per cent in the three months to November, and is expected to slow further. In January, overall and core inflation measured by the CPI remained stable at 4.0 and 5.1 per cent, respectively. Overall inflation is expected to fall in the coming months, approaching the Bank of England's 2% target, albeit only temporarily due to base effects from previous increases in energy bills in the regulated market.

CHINA

In China, recent activity indicators provide mixed signals, with the residential construction market adjusting. While the growth of industrial production over the twelve months increased slightly in December, to 6.5 per cent, the surveys show mixed signals for the first months of this year. The weakness of the residential construction sector is confirmed as a negative determinant of economic activity, affecting private consumption growth in particular. The adjustment in the residential real estate sector continued in 2024: indeed, sales of new homes fell sharply and construction of new homes remained stagnant at very low levels, along with real estate sales. These adverse trends are the backdrop to the severe volatility recently observed in the stock market, while consumer confidence has stabilised at historically low levels. Overall 12-month inflation measured by the CPI fell to -0.8 per cent in January, down from -0.3 in the previous month, mainly reflecting further declines in food prices. Twelve-month core inflation measured by the CPI excluding food and energy goods remained positive at 0.4 per cent. This low core inflation reflects a very subdued demand for consumption.

EUROZONE

Euro area output remained stagnant at the end of 2023, suffering from weak world trade, the decumulation of inventories and the transmission of the ECB's monetary policy tightening. Activity is expected to remain moderate in the short term and gradually recover later in the year, thanks to falling inflation, robust wage developments and strengthening foreign demand. Survey data continue to indicate little or no growth in the short term, but longer-termforward-looking indicators based on business surveys show some signs of recovery. Private consumption is still weak as consumers remain price-sensitive and postpone major purchases; it should, however, improve as real disposable income recovers. Order backlogs and the tightening of monetary policy are weighing on the short-term investment prospects of companies, although an improvement in investor confidence suggests that there may be a chance of a recovery later this year. By contrast, investment in residential construction is likely to remain weak. Although labour demand continues to slow down, employment increased further in Q4 2023, in step with the increase in the labour force. In the medium term, the recovery will also be supported by the gradual fading of the impact of restrictive monetary policy. This outlook is reflected in the macroeconomic projections for the euro area formulated by ECB experts in March 2024, which indicate annual real GDP growth of 0.6 per cent in 2024, rising to 1.5 and 1.6 per cent in 2025 and 2026, respectively. Compared to the December 2023 exercise conducted by Eurosystem experts for the euro area, the GDP growth outlook has been revised downwards for 2024, while it remains broadly unchanged for 2025 and 2026.

ITALY

In the last quarter of 2023, GDP in Italy continued to grow, albeit at a moderate pace. The drop in consumption was countered by a sharp increase in investment. The latter increased especially in the construction sector, which benefited from the acceleration of work in view of the reduction of tax incentives. The slow expansion of output continued in the first months of this year, with a positive contribution from services against the continued weakness of manufacturing. In the fourth quarter of last year, GDP expanded slightly over the previous period (0.2 per cent), driven mainly by growth in construction investment (3.8 per cent). On the other hand, household consumption decreased due to a significant drop in purchases of services, especially accommodation and catering; spending on non-durable goods remained stable, spending on durable goods rose. Value added increased strongly in construction, reflecting the acceleration in the completion of works in view of the gradual reduction of tax incentives; In contrast, activity remained broadly stable in both industry in the narrow sense and services. Based on the

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