Pag. 3 di 246

Dear Shareholders,

the separate financial statements, which we submit for your review and approval, in 2023 report “Total revenues” of Euro 518.4 million and a net loss of Euro 5.6 million, after current and deferred taxes for a net positive total of Euro 6.7 million.

The Board of Directors of the Parent Company Aquafil SpA, in accordance with the accounting rules, prepared also the Aquafil Group financial statements for 2023, which report “Total revenues” of Euro 571.8 million and a Group net loss of Euro 25.8 million.

Both financial statements were prepared in accordance with international accounting standards issued by the International Accounting Standards Board (IASB), endorsed by the European Union as required by Regulation No. 1606/2002 issued by the European Parliament and European Council and adopted with Legislative Decree No. 38/2005.

INTRODUCTION

The Parent Company Aquafil SpA availed of the option contained in Legislative Decree 32/2007 which permits companies which must prepare consolidated financial statements to present a single Directors’ Report for the separate and consolidated financial statements and therefore greater attention was focused in the Report, where appropriate, on the most significant matters concerning the companies included in the consolidation scope.

In accordance with Directive 2014/95/EU and as required by Italian Legislative Decree No. 254/2016, the consolidated non-financial report (NFR) is published separately from this Directors’ Report.

GENERAL INFORMATION OF THE PARENT COMPANY AQUAFIL SPA

Pag. 4 di 246

Registered Office: Via Linfano, 9 - Arco (TN) - 38062 - Italy

Telephone: +39 0464 581111- Fax: +39 0464 532267

Certified e-mail:pec.aquafil@aquafil.legalmail.it

E-mail: info@aquafil.com

Website: www.aquafil.com

Share capital (at the approval date of the financial statements at 31.12.2023):

•Approved: 50,522,417.36

•Subscribed: 49,722,417.28

•Paid in: 49,722,417.28

Tax and VAT number: IT 09652170961

Trento Economic & Administrative Registration No. 228169

There are no changes relating to the name of the entity preparing the financial statements or other means of identification with respect to the end of the previous year.

Company duration: 31/12/2100

CORPORATE BOARDS

Board of Directors at December 31, 2023

CHIARA MIO Chairperson (*)

GIULIO BONAZZI Chief Executive Officer

Pag. 5 di 246

GIOVANNI STEFANO LORO Director

FRANCO ROSSI Director

SILVANA BONAZZI Director

FRANCESCO BONAZZI Director

FRANCESCO PROFUMO Director (*)

ILARIA MARIA DALLA RIVA Director (*)

PATRIZIA RIVA Director (*)

(*) Director declaring independence in accordance with Article 147-ter, paragraph 4 of the CFA and Article 3 of the Self-Governance Code

Control and Risks Committee

PATRIZIA RIVA Chairperson

FRANCESCO PROFUMO Member

CHIARA MIO Member

Appointments and Remuneration Committee

FRANCESCO PROFUMO Chairperson

PATRIZIA RIVA Member

ILARIA MARIA DALLA RIVA Member

Supervisory Board

Pag. 6 di 246

FABIO EGIDI Chairperson

KARIM TONELLI Internal member

MICHELE PANSARELLA External member

Board of Statutory Auditors

STEFANO POGGI LONGOSTREVI Chairperson

BETTINA SOLIMANDO Statutory Auditor

BEATRICE BOMPIERI Statutory Auditor

Independent audit firm

PRICEWATERHOUSECOOPERS S.p.A. – Trento (Italy), Via della Costituzione 33

The Board of Directors will remain in office until the approval of the financial statements for the year 2025 and the Board

of Statutory Auditors will remain in office until the approval of the financial statements for the year 2023. The independent audit firm was appointed for the 2017-2025 period.

For full details on the Corporate Boards, reference should be made to the Corporate Governance and Ownership Structure Report,

drawn up in accordance with Article 123-bis of Legislative Decree 58/1998 and available on the Aquafil Group website.

Pag. 7 di 246

CONSOLIDATION SCOPE

The Group is composed of the Parent Company Aquafil SpA and 21 companies consolidated on a line-by-line basis as a result of direct or indirect control. In addition to these are the associated companies Nofir AS and Poly-Services Sas, as well as the joint venture Acca S.p.A., which are valued at equity.

Production is carried out at 21 plants located in Europe, the United States, South America, Asia and Oceania.

GENERAL AND ECONOMIC OVERVIEW

Climate change

A screenshot of a computer screen

Description automatically generated

Pag. 8 di 246

The Aquafil Group passionately pursues its environmental, social and governance policy and takes an active role in the community in which it operates.

The Group’s organisational structure has evinced a long-standing interest in the environmental impact of processes and products, and continuously assesses possible avenues for improvement, with an approach firmly focused on sustainability and circularity.

In particular, this structure considers the consequences of climate change for its activities, processes and local organisations, the risk of which is consistently monitored and assessed. It can thus be stated that no significant impacts are currently expected on operating activities in the regions where the Group operates.

For further information regarding the Aquafil Group's sustainability goals and policies, please refer to the Non-Financial Report pursuant to Legislative Decree No. 254 of 2016 published on the Group's website at the same time as these financial statements.

Implications of the COVID-19 pandemic and the Russia-Ukraine and Israel-Palestine conflicts

On May 5, 2023, the World Health Organisation officially declared the health emergency over. This had begun on March 11, 2020, when it was first declared a pandemic.

The conflict between Russia and Ukraine that began on February 24, 2022 has brought severe repercussions to Europe in terms of economic instability, resulting in significant inflation for the broad range of products - caused particularly by the sudden unavailability of imports from Russia and Belarus of the products subject to sanctions and the high price levels of energy components - and increased shipping costs by sea and on land. As illustrated in the Directors’ Report relating to the previous year, the Group does not have a dependence on particular products and/or suppliers/clients in these areas which may impact upon operations. No direct consequences were therefore felt from the stoppage of import/exports of the products and businesses subject to limitations having definitively interrupted suppliers already in October 2022.

Pag. 9 di 246

The armed conflict between the State of Israel and Hamas that began on October 7, 2023 led Israel to declare a state of war and invade and take control of the Gaza Strip, where the Palestinian organisation's bases are located.

The economic consequences of the war, and its continuation to date with no peaceful solution in sight in the immediate future, have not demonstrated significant impacts on the markets in which the Aquafil Group operates for the time being, nor have they affected the procurement of goods and services, which are not usually sourced from those areas.

The effect for the entire European economic area that the slowdown in goods traffic through the Suez Canal, which may be related to the Israeli-Palestinian conflict, may bring during 2024 to international trade and the availability of products from or destined for Far Eastern markets, which as of today cannot be quantified in terms of magnitude and duration, is to be evaluated.

SIGNIFICANT EVENTS IN 2023

The Group’s key events in the year included:

1.Acca SpA: On January 18, 2023 through its subsidiary Aquafil Chile SpA, a joint venture was

created with the company Atando Cabos SpA called ACCA SpA, with registered office in Santiago, Chile, and share capital of CLP 1 million. The company has the corporate purpose of acquiring, storing and recycling fishing nets, nautical ropes and other plastic waste;

2.Aquafil SpA dividend distribution: On April 27, 2023, the Shareholders' Meeting of Aquafil SpA

approved the distribution of dividends totalling Euro 12.3 million, which were paid out on May 10, 2023, with coupon date of May 8, 2023;

3.Treasury share purchases: as part of the treasury share purchase plan approved by the

Shareholders’ Meeting on October 20, 2021, it should be noted that, in January 2023, Aquafil continued to purchase shares up to the 1,278,450 treasury shares held, equal to 2.4961% of the share capital. The authorisation by shareholders had a validity of 18 months from the date of the related resolution and therefore authorised the purchase, in one or more tranches, of ordinary shares up to a maximum number which, taking account of the ordinary shares which may be held in portfolio by the company and by its subsidiary, does not total more than 3% of share capital;

Pag. 10 di 246

4.Aquafil Jiaxing Co. Ltd share capital increase: on May 8, 2023, the parent company Aquafil

SpA paid in the remaining portion of the share capital subscribed and not yet paid of the subsidiary Aquafil Jiaxing Co. Ltd for a total amount of Euro 1,348 thousand. Following the final payment, the entire share capital of the company Aquafil Jiaxing Co. Ltd has therefore been fully paid-in;

5.Karun World LTD: in May 2023, the stake in the company Karun World LTD, with registered

office in Warwick (Great Britain), was recognised for Euro 150 thousand, equal to 1.83% of the share capital. The company is engaged in the environmentally-sustainable production of eyewear from the collection of waste materials, such as rope or fishing nets recovered from the coasts and mountains of Patagonia;

6.Tax assessment FY 2017: with regard to the audit referring to the 2017 fiscal year involving

the parent company Aquafil S.p.A., on May 15, 2023, the case was initiated for the recovery of taxation for a total of Euro 853 thousand. On September 4, 2023, the Company reached an IRES and IRAP settlement agreement, which did not involve any payment to the tax authority due to the offsetting against the period's losses, and amounts to Euro 187 thousand. For further details, reference should be made to the “Contingent liabilities” paragraph of the Explanatory Notes.

7.Aquafil S.p.A. / Aqualeuna Gmbh: the company aqualeuna GmbH, which was the subject of a

tax audit by the Federal Tax Office (“Bundeszentralamt fur Steuern”), division of Leuna (Germany), received in May 2023 from the Finanzamt Merseburg office notification of the closure of the audit for the tax periods 2018 and 2019 and the subsequent assessment and settlement notices for the company's income tax. For further details, reference should be made to the “Contingent liabilities” paragraph of the Explanatory Notes.

8.Poly-Service Sas:on August 7, 2023, Aquafil S.p.A. and Politecnici Srl incorporated the

company Poly-Service SAS, based in Lyon (France), with share capital of Euro 10,000. Aquafil holds a 45% interest, with Politecnici S.r.l. holding 55%. The corporate purpose of the company is the design, production and marketing of plastics, rubber, nylon and related products, in addition to semi-finished, finished and recycled products based on plastics, particularly nylon, in addition to the collection of post-consumer plastics, rubber, nylon and related products and subsequent processing into secondary raw materials;

9. Aquafil UK Ltd: on September 22, 2023, Aquafil UK Ltd. began the process of ceasing its

manufacturing operations, which will be reabsorbed by other European Group companies, resulting in the collective redundancy of 35 employees.

Pag. 11 di 246

AQUAFIL ON THE STOCK MARKET

At December 29, 2023, the Aquafil share price (ISIN IT0005241192) was Euro 3.44, down approx. 44% on December 30, 2022 (Euro 6.14), against an increase in the STAR segment of the Italian Stock Exchange of approx. 3%.

The Aquafil share generally declined in the period, between a minimum of Euro 2.08 (on October 23, 2023) and a maximum of Euro 6.30 (on January 12, 2023).

The average traded volume in the year was 62,874 shares, with a maximum daily volume (traded on October 13, 2023) of 365,025 shares and a minimum daily volume (traded on January 23, 2023) of 1,089 shares.

AQUAFIL GROUP AND PARENT COMPANY FINANCIAL HIGHLIGHTS

Definition of alternative performance indicators

Gross operating profit (EBITDA)

This is an alternative performance indicator not defined under IFRS but used by company management to monitor and assess the operating performance as not impacted by the effects of differing criteria in determining taxable income, the amount and types of capital employed, in addition to the amortisation and depreciation policies. This indicator is defined by the Aquafil Group as the net result for the year adjusted by the following components:

•income taxes,

•investment income and charges,

•amortisation, depreciation and write-downs of tangible and intangible assets,

Pag. 12 di 246

•provisions and write-downs,

•financial income and charges,

•non-recurring items.

Adjusted EBIT

Calculated as EBITDA, to which the accounts “amortisation, depreciation and write-downs” and “provisions and write-downs” are added. Adjusted EBIT differs from EBIT in terms of the non-recurring components and other charges, as specified in the notes to the “Parent Company Key Financial Highlights” table.

Net Financial Position

On April 29, 2021, Consob issued “Call to attention No. 5/21” in which it highlighted that the new “ESMA Guidelines” of March 4, 2021 replaced on May 5, 2021 those of preceding Consob communications. In particular, guideline No. 39 requires that financial statement disclosure includes the following definition of net financial debt:

A.Liquidity

B.Other liquidity

C.Other current financial assets

D.Liquidity (A+B+C)

E.Current financial debt (including debt instruments but excluding the current portion of non-current financial debt)

F.Current portion of non-current financial debt

G.Current financial debt (E + F)

H.Net current financial debt (G - D)

I.Non-current financial debt (excluding current portion and debt instruments)

J. Debt instruments

K.Trade payables and other non-current payables

Pag. 13 di 246

L.Non-current financial debt (I + J + K)

M.Total financial debt (H + L)

Application of the new definition of debt according to the above format has not resulted in any change to the Group’s Net Financial Position for the year under review or for the preceding comparative years.

Key Group Financial Highlights

in Euro thousands

2023

2022

Profit for the year

(25,849)

29,151

Income taxes

(143)

7,717

Investment (income)/charges

(90)

(23)

Amortisation, depreciation and write-downs

49,635

47,851

Provisions and write downs/(releases)

(1,002)

180

Financial items (*)

20,002

4,484

Non-recurring items (**)

4,946

2,901

EBITDA

47,500

92,261

Revenues

571,806

684,074

EBITDA margin

8.3%

13.5%

in Euro thousands

2023

2022

EBITDA

47,500

92,261

Amortisation, depreciation and write-downs

(49,635)

(47,851)

(Provisions and write downs)/releases

1,002

(180)

Adjusted EBIT

(1,133)

44,229

Revenues

571,806

684,074

Adjusted EBIT margin

(0.2)%

6.5%

(*) Comprises: (i) financial income for Euro 1.1 million, (ii) interest expense on loans and other bank charges for Euro 19.1 million, (iii) customer cash discounts for Euro 2.8 million and (iv) net exchange gains for Euro 0.8 million.

(**) Comprises: (i) non-recurring charges related to the expansion of the Aquafil Group for Euro 0.6 million; (ii) restructuring charges of Euro 3.0 million; (iii) legal consultancy and extraordinary administrative costs of Euro 0.5 million; (iv) non-recurring costs of Euro 1.1 million, mainly incurred by Aquafil UK Ltd following the notice of cessation of production activities, as stated above

Pag. 14 di 246

and (v) other non-recurring income of Euro 0.3 million. Reference should be made to paragraph 8.14 of the Notes to the consolidated financial statements.

For an analysis of the highlights indicated above, reference should be made to the paragraph “Group operating performance” below.

Key Group balance sheet and financial indicators

(in Euro thousands)

At December 31, 2023

At December 31, 2022

Consolidated Shareholders' Equity

125,253

175,402

Net Financial Position

248,537

247,885

NFP/EBITDA

5.232

2.687

The comments on the movements in the Net Financial Position are reported in the “Group balance sheet and financial position” paragraph.

Parent Company Aquafil SpA Key Financial Highlights

(Euro thousands)

2023

2022

Net profit/(loss) for the year

(5,641)

15,930

Income taxes

(6,701)

3,625

Investment income and charges

(16,487)

(183)

Amortisation, depreciation and write-downs

10,466

10,711

Provisions and write downs/(Releases)

(773)

360

Financial items (*)

19,579

6,975

Non-recurring items (**)

2,142

922

EBITDA

2,585

38,340

Revenues

518,444

694,343

EBITDA margin

0.5%

5.5%

(Euro thousands)

2023

2022

EBITDA

2,585

38,340

Amortisation, depreciation and write-downs

(10,466)

(10,711)

Pag. 15 di 246

(Provisions and write downs)/releases

773

(360)

Adjusted EBIT

(7,109)

27,269

Revenues

518,444

694,343

Adjusted EBIT margin

(1.4)%

3.9%

(*) Comprises: (i) financial income for Euro 2.2 million, (ii) interest expense on loans and other bank charges for Euro 19.1 million, (iii) customer cash discounts for Euro 2.4 million and (iv) net exchange losses for Euro 0.3 million.

(**) Comprises: (i) non-recurring charges related to the expansion of the Aquafil Group for Euro 0.6 million, (ii) company restructuring charges of Euro 1.1 million, (iii) legal consultancy and extraordinary administration costs of Euro 0.1 million and (iv) other non-recurring charges of Euro 0.3 million. For further details, see paragraph 9 of the Notes to the Separate Financial Statements.

The income statement figures of the Parent Company report revenues and acquisition costs which differ from the consolidated financial statements as including inter-company purchase and sales activities undertaken by Aquafil SpA with the investees, which however in the consolidation process are eliminated. Therefore, the margins on revenues are not representative of the company’s actual profitability. Operating income and the net result also do not incorporate the positive income statement results of the subsidiaries, in view of the investments’ valuation method adopted. For all other detailed information, see the section “Group operating performance” below and the Notes to the separate financial statements of the Parent Company.

Key balance sheet and financial indicators of the Parent Company Aquafil SpA

(Euro thousands)

At December 31, 2023

At December 31, 2022

Shareholders’ Equity

102,432

120,679

Net Financial Position

316,934

298,938

The net financial position of the Parent Company Aquafil SpA does not reflect the real debt of the company as not taking account of liquidity available in the bank accounts of the subsidiaries at year-end (Euro 85 million). Funding from the financial system in fact was undertaken largely by the parent company, which plays a financial support role for all of the subsidiaries. The only funding line undertaken by subsidiaries is the loan taken out in July 2020 by Tessilquattro SpA for a total of Euro 5 million.

Pag. 16 di 246

For all other detailed information, reference should be made to the separate financial statements of the company.

GROUP OPERATING PERFORMANCE

The 2023 Income Statement compared with the previous year is reported below:

CONSOLIDATED INCOME STATEMENT

(in Euro thousands)

Note

2023

of which non-recurring

2022

of which non-recurring

Revenues

8.1

571,806

209

684,074

1,160

of which related parties

283

435

Other revenues and income

8.2

8,902

676

13,031

218

of which related parties

Total revenues and other revenues and income

580,708

885

697,105

1,378

Cost of raw materials and changes to inventories

8.3

(291,620)

(269)

(317,815)

(480)

of which related parties

Service costs and rents, leases and similar costs

8.4

(126,907)

(2,065)

(168,472)

(1,581)

of which related parties

(524)

(465)

Labour costs

8.5

(125,034)

(3,004)

(126,875)

(1,565)

Other costs and operating charges

8.6

(3,644)

(493)

(4,038)

(653)

of which related parties

(70)

Amortisation & write-downs

8.7

(49,635)

(47,851)

(Provisions and write downs)/releases

8.8

1,002

(180)

Increase in internal work capitalised

8.9

6,271

5,687

Operating Profit/(loss)

(8,859)

(4,946)

37,561

(2,901)

Financial Income/(Charges) from Investments

of which related parties

183

Financial income

8.10

1,022

4,869

Financial charges

8.11

(19,041)

(8,368)

of which related parties

(146)

(140)

Exchange gains/(losses)

8.12

796

2,783

Profit/(loss) before taxes

(25,992)

(4,946)

36,868

(2,901)

Income taxes

8.13

143

(7,717)

Net profit/(loss)

(25,849)

(4,946)

29,151

(2,901)

Minority interest profit/(loss)

Group net result

(25,849)

(4,946)

29,151

(2,901)

Basic earnings/(loss) per share

8.15

(0.51)

0.57

Diluted earnings/(loss) per share

8.15

(0.51)

0.57

Revenues

2023 Consolidated revenues decreased on the previous year by Euro 112.3 million (16.4%), from Euro 684.1 million to Euro 571.8 million.

Pag. 17 di 246

This decrease can be attributed to multiple factors: reduction in quantities sold throughout the year (down 4.7% on the previous year), a different sales mix (less fibres but more polymers) and a decrease in average sales price due to their alignment with lower raw material costs. Please see below for further details.

Other Revenues and Income

Other revenues and income amounted to Euro 8.9 million with a decrease of Euro 4.1 million compared to December 31, 2022 (Euro 13 million). The decrease in mainly due to increased tax credits for government contributions for electricity intensive and natural gas intensive companies meeting the regulation’s requirements, received by Aquafil SpA and by Tessilquattro SpA in the previous year.

Raw material costs

Raw materials, ancillaries and consumables amount to Euro 291.6 million, decreasing Euro 26.2 million on the previous year (8.2%). The decrease is mainly due to a quantity effect and a price effect and was impacted by the high unitary stock values in 2022, despite the reduction in raw material costs during 2023.

Service costs and rent, lease and similar costs

Service costs and rent, lease and similar costs amounted to Euro 126.9 million, decreasing Euro 41.6 million on 2022 (Euro 168.5 million).

The reduction, related to the lower production volumes, was particularly significant in terms of transport and utility costs which significantly declined in 2023. Reference should also be made to the table in the Explanatory Notes.

Labour costs

Labour costs totalled Euro 125.0 million, decreasing Euro 1.8 million on 2022 (Euro 126.9 million). Labour costs, net of non-recurring components, account for 21.3% of revenues, compared to 18.3% in 2022. The average workforce for the Group decreased by 6 employees, from an average of 2,795 in 2022 to 2,789 in 2023.

Pag. 18 di 246

Reference should also be made to paragraph 8.5 of the Explanatory Notes.

Other costs and operating charges

Other costs and operating charges amounted to Euro 3.6 million compared to Euro 4 million in 2022, decreasing by Euro 0.4 million. The percentage of these costs and charges on total revenues remained substantially in line with the previous year (0.6%).

Increases for internal work

Increases for internal work amounted to Euro 6.3 million, substantially in line with 2022 (Euro 5.7 million). For further details, reference should be made to paragraph 8.9 of the Explanatory Notes.

EBITDA

EBITDA was Euro 47.5 million, decreasing Euro 44.8 million (48.5%) on 2022 (Euro 92.3 million).

The EBITDA Margin in 2023 was 8.3%, compared to 13.5% in 2022.

The decrease is mainly attributable to the effect of the high unit cost of raw materials arising in 2022 for approx. Euro 22 million, in addition to the decrease in quantities sold.

Amortisation, depreciation and write-downs

Amortisation, depreciation and write-downs of Euro 49.6 million increased by Euro 1.8 million on 2022 (Euro 47.9 million). This figure, substantially in line with the preceding period, relates to the straight-line amortisation and depreciation of fixed assets.

Pag. 19 di 246

Provisions and write downs/releases

"Provisions and write-downs/releases" present a positive balance of Euro 1.0 million, compared to a negative Euro 0.2 million at December 31, 2022. The movement is due to an updated analysis of the collectability of trade receivables outstanding at the balance sheet date.

EBIT

The 2023 EBIT was a loss of Euro 8.9 million compared to a profit of Euro 37.6 million in 2022 (down Euro 46.5 million). The movement is mainly due to the reduction in EBITDA.

Financial Management Result

Net financial charges of Euro 17.1 million were reported in 2023, compared to net charges of Euro 0.7 million in 2022. The increase is mainly due to higher interest charges on mortgages and bank loans and the negative fair value measurement of derivatives (IRS). For further details reference should be made to paragraphs 8.10 and 8.11 of the Explanatory Notes.

Income taxes

Income taxes reported income of Euro 0.1 million compared to income tax charges of Euro 7.7 million in 2022. For further details reference should be made to paragraph 8.13 of the Explanatory Notes.

Pag. 20 di 246

Consolidated Result

The Group net loss was Euro 25.8 million, compared to a net profit of Euro 29.1 million in 2022.

Breakdown of revenues by region and product line

The breakdown of revenues by region and product line is presented in the following table (Euro millions) and also in percentage terms, alongside an analysis of the movements against the previous year:

BCF (fibre for carpet)

NTF (fibre for fabrics)

Polymers

TOTAL

YTD 2023

YTD 2022

Change

Change%

YTD 2023

YTD 2022

Change

Change%

YTD 2023

YTD 2022

Change

Change%

YTD 2023

YTD 2022

Change

Change%

EMEA

184.6

217.9

(33.3)

(15.3)%

71.4

103.3

(31.9)

(30.9)%

39.2

51.8

(12.6)

(24.3)%

295.2

372.9

(77.8)

(20.9)%

North America

148.1

166.1

(18.0)

(10.8)%

29.7

31.9

(2.3)

(7.2)%

4.9

4.0

0.8

20.7%

182.7

202.1

(19.4)

(9.6)%

Asia-Oc.

87.0

100.3

(13.3)

(13.2)%

4.2

4.1

0.1

3.5%

0.8

1.4

(0.6)

(45.6)%

92.0

105.8

(13.8)

(13.0)%

RoW

0.8

0.1

6.6%

1.2

2.5

(1.4)

(54.2)%

0.0

172.3%

2.0

3.3

(1.3)

(40.0)%

TOTAL

420.6

485.0

(64.5)

(13.3)%

106.4

141.8

(35.4)

(25.0)%

44.8

57.2

(12.4)

(21.6)%

571.8

684.1

(112.3)

(16.4)%

The comparison indicates the following:

1.revenues in EMEA amounted to Euro 295.2 million, decreasing by 20.9% (Euro 77.8 million) in 2023 compared to the previous year, mainly due to a decrease in quantities sold (5.8% decrease), a different sales mix, and lower sales prices on all product lines. Specifically, the BCF product line saw a 15.3% decrease due to lower selling prices and lower quantities sold. The NTF product line contracted 30.9% due to the combined effect of lower selling prices and lower quantities sold. Finally, the polymers product line shows a decrease of 24.3%, mainly due to the reduction in quantities sold;

Pag. 21 di 246

2.North America revenues totalled Euro 182.7 million, compared to Euro 202.1 million in the previous year, decreasing Euro 19.4 million (-9.6%), with a decrease of 4.2% in quantities sold. For the BCF product line revenues decreased Euro 18.0 million compared to the previous year (10.8%), mainly due to lower volumes and sales prices. The NTF line saw a reduction of Euro 2.3 million (7.2%), mainly due to the decrease in quantities sold in 2023 (9.1%), in addition to lower sales prices;

3.Asia and Oceania revenues amounted Euro 92.0 million, compared to Euro 105.8 million in the previous year, a decrease of Euro 13.8 million (13%). For the BCF product line revenues decreased Euro 13.3 million compared to the previous year, mainly due to lower volumes (1.8%).

Finally, ECONYL® brand revenues accounted for 49.6% of fibre revenues in FY2023 compared to 43.5% in the previous year.

GROUP BALANCE SHEET AND FINANCIAL SITUATION

The following table reclassifies the consolidated equity and financial position of the Group at December 31, 2023, and December 31, 2022.

GROUP BALANCE SHEET AND FINANCIAL SITUATION

in Euro thousands

At December 31, 2023

At December 31, 2022

Change

Trade receivables

26,206

28,553

(2,347)

Inventories

189,493

260,808

(71,315)

Trade payables

(116,006)

(126,840)

10,834

Tax receivables

1,619

580

1,039

Other current assets

14,644

15,861

(1,217)

Other current liabilities

(20,846)

(25,163)

4,317

Net working capital

95,110

153,800

(58,690)

Property, plant and equipment

251,604

247,469

4,135

Intangible assets

19,080

21,596

(2,516)

Goodwill

15,103

15,647

(544)

Financial assets

1,558

1,850

(292)

Net fixed assets

287,345

286,561

783

Employee benefits

(5,104)

(5,192)

Other net assets/(liabilities)

(3,561)

(11,883)

8,322

Net Capital Employed

373,790

423,287

(49,497)

Cash and banks

157,662

110,682

46,980

ST bank payables and loans

(77,841)

(60,481)

(17,360)

Pag. 22 di 246

M-LT bank payables and loans

(225,658)

(202,234)

(23,425)

M-LT bond loan

(57,391)

(70,301)

12,910

ST bond loan

(13,258)

(13,108)

(150)

Current loans

5,703

9,964

(4,262)

Other financial payables

(37,753)

(22,407)

(15,346)

Net Financial Position

(248,537)

(247,885)

(652)

Group shareholders' equity

(125,253)

(175,401)

50,148

Minority interest net equity

(1)

Total shareholders' equity

(125,253)

(175,402)

50,149

In the consolidation process, the balance sheet items expressed in foreign currencies were impacted by the write-back/write-down of opening balance sheet items in 2023 (currency translation effects) principally between the Euro the US and Chinese currencies: the changes in the balance sheet items compared to 2022 arose partly due to this factor.

Net working capital amounts to Euro 95.1 million, decreasing Euro 58.7 million on Euro 153.8 million at December 31, 2022.

The movement is mainly due to the reduction in the value of inventories, both in view of their quantity and the lower price of raw materials as previously illustrated.

Fixed assets at December 31, 2023 amounted to Euro 287.3 million, substantially in line with December 31, 2022 (Euro 286.6 million), due to the combined effect of:

1.net investment activities in tangible and intangible assets of Euro 55.2 million, including Euro 22.2 million regarding the increase in the year concerning the movement in goods recognised as per IFRS 16;

2.negative conversion differences and other minor items for Euro 4.8 million;

3.amortisation and depreciation in the year of Euro 49.6 million.

Investments in tangible assets are outlined in the Explanatory Notes and mainly concerned (a) the industrial and energy efficiency improvements at the Group’s facilities, (b) the industrial efficiency and energy improvement regarding the production of ECONYL® caprolactam and of its raw materials, in addition to the development of circularity-focused technologies, (c) the expansion of existing production capacity, (d) the improvement and technological upgrading of existing plants and equipment, and (e) the right-of-use as per IFRS 16.

Pag. 23 di 246

The increase in intangible assets is mainly due to (a) development costs for textile fibre samples, which comply with the criteria set out by IAS 38, (b) costs incurred to roll out and improve the digitalisation of the Aquafil Group and (c) the acquisition by Aquafil Carpet Collection, as set out in the Notes to the financial statements.

Shareholders' Equity decreased by Euro 50.1 million, from Euro 175.4 million to Euro 125.3. million, substantially due to the consolidated net loss of Euro 25.8 million and the negative exchange differences from the translation of the financial statements expressed in currencies other than the Euro for Euro 11.5 million, the distribution of dividends for Euro 12 million, the purchase of treasury shares for Euro 0.6 million and the effect from the application of IAS 19 for Euro 0.2 million.

The Net Financial Position (net debt) at December 31, 2023 amounted to Euro 248.5 million, compared to Euro 247.9 million in the previous year, increasing Euro 0.6 million. The main factors are explained in detail in the consolidated cash flow statement, where we mainly note the generation of cash from operating activities of Euro 39.6 million, the generation of cash from Working Capital of Euro 63.7 million, the decrease in other assets and liabilities of Euro 7.8 million, in addition to Euro 2.7 million of derivatives with negative fair value included in "Net changes in current and non-current financial assets and liabilities”, cash absorption for net investments of Euro 33.2 million, the payment of net financial charges of Euro 15.3 million, the payment of taxes and use of provisions of Euro 10.7 million, the non-cash change related to the application of IFRS 16 of Euro 22.2 million, the payment of dividends of Euro 12 million, as well as the purchase of treasury shares of Euro 0.6 million Euro.

Group company current account liquidity, diversified by region and institution, increased from Euro 110.7 million at December 31, 2022 to Euro 157.7 million at December 31, 2023.

During the year new loans totalling Euro 100 million were agreed. A breakdown of the bank debt is provided in the Notes.

The short-term credit lines granted to the Group companies were available for a total amount at period-end of Euro 69.8 million, and all the relative lines remain substantially unused.

Pag. 24 di 246

INTERCOMPANY TRANSACTIONS AND TRANSACTIONS WITH RELATED COMPANIES

Inter-company transactions

Aquafil Group operations directly involve - both in terms of production and distribution - the Group companies, which are assigned, interconnected and depending on the case, the processing, special processing, production and sales phases for specific regions.

The main activities of the various group companies and principal events in 2023, broken down by each of the three product lines, were as follows.

BCF (Bulk Continuous Filament for textile floor covering) Line

The core business of the Aquafil Group is the production, re-processing and sale of yarn, mainly polyamide 6-based yarn, partly petroleum based and partly from regenerated ECONYL®, for the higher-quality end-markets. The Group also produces and markets polyester fibres for certain textile flooring applications.

The Group companies involved in the production and sales processes for this product line are the parent company Aquafil SpA, with production site in Arco (Italy), Tessilquattro SpA, with production based in Cares (Italy) and in Rovereto (Italy), Aquafil SLO doo, with facilities in Ljubljana, Store and Ajdovscina (Slovenia), Aquafil USA Inc. with two facilities in Aquafil Drive and Fiber Drive in Cartersville (USA), Aquafil Synthetic Fibres and Polymers Co. Ltd with facilities in Jiaxing (China), Aquafil Asia Pacific Co. Ltd with facilities in Rayong (Thailand), Aquafil UK, Ltd. with facilities in Kilbirnie (Scotland), limited to the first nine months of the year following the beginning of the process to conclude its production activities, as outlined in the “Significant events in 2023” paragraph, the commercial company Aquafil Benelux-France BVBA based in Harelbeke (Belgium) and the commercial company Aquafil Oceania Pty Ltd., Melbourne (AUS).

Group commercial operations for this product line are undertaken with industrial clients, which in turn produce for the intermediate/end-consumer markets, whose sectors are principally (a)

Pag. 25 di 246

the “contract” markets (hotels, offices and large public environments), (b) car floors and (c) residential textile flooring. Ongoing product and process technology innovation involves frequent updates to the yarns comprising the customer’s collection; the research and development is carried out by the internal development centre in collaboration with developers within client companies and architectural studies and designers upon the final users of carpets.

NTF Line (Nylon Textile Filament - Fibres for textile/clothing use)

The NTF product line produces and reprocesses polyamide 6 and 66 fibres, Dryarn® polypropylene microfibers for men’s and women’s hosiery, knitwear and non-run fabrics for underwear, sportswear and special technical applications. The markets concern producers in the clothing, underwear and sportswear sectors, on which the main clothing brands operate.

The production/sale of fibres for textile/clothing use is undertaken by the companies Aquafil SpA (Arco), Aquafil SLO doo with facilities in Ljubljana and Senozece (Slovenia), AquafilCRO doo, with facilities in Oroslavje (Croatia), Aquafil O’Mara Inc., with facilities in Rutherford College (North Carolina) and Aquafil Tekstil Sanayi Ve Ticaret A. S., with commercial operations based in Istanbul (Turkey).

The percentage of NTF polyamide-6 fibre made from caprolactam obtained from the ECONYL® regeneration process continues to increase, and the product is being increasingly well-received by clothing brands, that are always sensitive to environmental issues.

Nylon 6 polymer line

The Group produces and sells polymers and polyamide 6 for end segments, including “engineering plastics” (injection moulding).

The polymers are mainly produced/sold by Aquafil SpA, Tessilquattro SpA, Aquafil SLO doo and Aquafil USA Inc. Cartersville (USA).

ECONYL® regeneration process

A significant proportion of polyamide-6 fibres, for both the BCF and the NTF product lines, as well as for polymers, are produced using the caprolactam from regenerated ECONYL® , a logistical-production system which obtains top-quality caprolactam from the transformation of

Pag. 26 di 246

materials, and mainly recovered industrial (pre-consumer) polyamide 6 and/or (post-consumer) materials disposed of at the end of their life cycle.

The caprolactam monomer obtained at the Ljubljana plant from the ECONYL® process supports all three product lines - BCF, NTF and polymers - as an alternative raw material to that from fossil sources, for applications (a) in textile flooring with a specific sustainability focus, (b) in clothing and accessories, in particular at the request of the leading international fashion brands more dedicated to a concrete circular economy and (c) in the design and manufacture of innovative polyamide 6 based plastic products, instead of other plastic materials that, unlike polyamide 6, can not be restored to their original state by way of chemical regeneration.

The ECONYL® regeneration process is fed by recovering polyamide-6 textile flooring materials and fish netting at the end of their useful lives and a series of other industrial and consumer waste materials with high polyamide-6 content. The process is completed at the facilities of AquafilSLO doo in Ljubljana (SLO), while taking advantage of synergies within a single system of logistics and production across multiple Group companies. For the regeneration of textile flooring, certain stages of material collection and pre-treatment of used carpeting are carried out by the companies Aquafil Carpet Recycling (ACR) #1 Inc. in Phoenix, Arizona (USA) and Aquafil Carpet Collection (ACC) Inc., Phoenix, Arizona (USA), Miramar, Chula Vista and Anaheim (California). For the regeneration of fish netting, in the previous year the company Aquafil Chile SpA, Santiago (Chile) was incorporated in order to strengthen and consolidate the procurement of good quality polyamide 6 based fishing nets to ensure consistent and stable support for the ECONYL® regeneration process, while the collaboration continued with the company in which a minority interest is held Nofir AS in Bodǿ, Norway, a European leader in the collection and treatment of end-of-life fish netting.

Other assets

The Slovak company Cenon Sro (Slovakia) no longer carries out production activities, and as of

November 2, 2023, the process of voluntary liquidation of the company has been initiated, which does not bring substantial economic and financial effects for the Group.

Pag. 27 di 246

Aquafil Engineering GmbH, Berlin (Germany), carries out industrial chemical plant design and

supply for customers outside the Group and in part for Group companies.

Aqualeuna GmbH, with registered office in Berlin (Germany), does not conduct operations-

related activities and is solely the holding company, with a 100% stake, of Aquafil Engineering GmbH. The company currently has a tax dispute pending with the German Tax Agency, a detailed explanation of which may be found in the Notes.

The subsidiary Aquafil India Private Ltd (India) does not undertake operational activities.

During FY2023, the following companies entered the consolidation scope: Acca S.p.A, a joint

venture between Aquafil Chile S.p.A. and the other equal partner Atando Cabos S.p.A. with the corporate purpose of acquiring, storing and recycling fishing nets, nautical ropes and other plastic waste, and the company Poly-Service SAS, formed by Aquafil S.p.A. and Politecnici S.r.l.

of which Aquafil holds 45% of the capital and with the corporate purpose of designing, manufacturing and marketing plastics, rubber, nylon and related products, as well as semi-finished, finished and recycled plastic-based products. For further information, reference should be made to the Explanatory Notes.

With the other related companies to which reference is not expressly made, commercial operations are undertaken at arm’s length, in consideration of the features of the goods and services rendered.

Related party transactions

The transactions of the Aquafil Group with related parties, as defined by international accounting standard IAS 24, relating to the consolidated financial statements for the year ended December 31, 2023, are presented below. The Aquafil Group undertakes commercial and financial transactions with its related companies, consisting of transactions relating to ordinary operations and at normal market conditions, taking into account the features of the goods and services provided.

The Group has made available on its website www.aquafil.com, in the Corporate Governance section, the Related Parties Transactions Policy.

The Aquafil Group undertakes transactions with the following related parties:

Pag. 28 di 246

•Parent Company and other companies at the head of the chain of control (Parent Companies);

•other parties identified as related parties in accordance with IAS 24 (other related parties).

The transactions between the Parent Company, its subsidiaries outside of the consolidation scope and the Aquafil Group concern financial transactions, commercial leases and transactions for the settlement of accounts receivable and payable arising from the tax consolidation of Aquafin Holding S.p.A., which includes, in addition to Aquafil SpA, the company Tessilquattro SpA. and the company Bluloop Srl. The transactions are shown in the Explanatory Notes to the financial statements.

The transactions were executed at market conditions; for a breakdown of the income statement and balance sheet amounts generated by related party transactions included in the Group consolidated financial statements at December 31, 2023, reference should be made to the Explanatory Notes.

With the exception of that indicated above there were no other transactions or contracts with related parties which, with regard to materiality upon the financial statements, may be considered significant in terms of value or conditions.

RESEARCH AND DEVELOPMENT

Introduction

The Aquafil Group has a Research & Development unit that manages and oversees all product and process innovation applied mainly to BCF yarns, NTF yarns, PA6 polymers and the ECONYL® regeneration process.

Technological research, development and innovation undertaken in 2023 constitutes the natural continuation of the work carried out in the preceding years, and concerned the main stages of production and the materials used, from the production inputs to the by-products of polymerisation, spinning, reprocessing and, for ECONYL®, regeneration and recycling of materials.

Pag. 29 di 246

A number of projects - due to their complexity - last many years and are undertaken in collaboration with outside partners; other less complex projects present results in a short timeframe.

More specifically, R&D led to actions regarding efficiency, performance, product functioning, eco-design, recycling, use of auxiliary products from natural origins, the study of micro-plastics, the development of polymerisation processes, and the sectors with final product application, taking advantage of outside contributions coming in the form of market input, new technologies, new materials, and the use of solutions recommended by qualified research partners.

Research and Development carried out by the Aquafil Group in 2023 incurred operating costs and investment activity totalling Euro 10.7 million, corresponding to 1.9% of consolidated revenues.

Summary and description of the individual projects

Technological research, development and innovation concerned numerous projects, some of which began in 2023, while others began in prior years. The main projects are listed below:

1. "Ecodesign": identification of basic knowledge and technology for the creation of industrial prototypes of textile flooring designed at origin to be recognisable (through dedicated voluntary marking) and recyclable, and to recover the residual value of the materials at the end-of-use. The project is carried out in collaboration with carpet manufacturers and suppliers of the materials they use (e.g., primary backing, latexes, etc.) to create know-how that has industrial value.

The project also includes the identification and/or development of new technologies for separating multilayers in complex carpets, where standard grinding technologies cannot work, in critical flooring types such as (a) carpet tiles, where separation would lead to the creation of full product circularity and (b) rubber underlay carpets, where a new technology, characterised by its small and portable scale, has been identified and developed that would enable an on-site material pre-processing model, resulting in optimised reverse logistics costs.

Pag. 30 di 246

2. Within the EcoDesign activity, Aquafil participated in the European project CISUFLO (CIrcular SUstainable FLOor covering), an initiative for a total duration of 4 years funded by the European Commission under the Horizon 2020 programme and involving 23 partners, and which has the objective of identifying innovative EcoDesign flooring solutions and recycling technologies. Aquafil S.p.A. participates in two capacities: as a recycler of polyamide 6, with responsibility for assessing the effectiveness of new design criteria in terms of recyclability of developed carpet tiles, and as an innovator of the product (EcoDesign) and dedicated recycling technologies. In this regard, Aquafil has invested in the building of innovative machinery capable of separating the polyamide obtained from carpet tiles (carpet tiles), from rubber mats (rubber mats) and from woven carpets (aviation segment); a pilot plant was installed for this purpose. Furthermore, within the consortium, they are working for the development of innovative technologies for the separation and removal of glue mixtures and the relating inorganic loads from the ECONYL® regeneration products .

3. Continuation of the development and fine-tuning of process technology for the selection and recycling of end-of-life polyamide carpets, which is being conducted in both Slovenia by AquafilSLO and the USA by the companies ACR #1 Inc. and Aquafil Carpet Collection LLC in order to improve the quality of materials to feed the process of producing ECONYL® polyamide 6.

4. Development of flame-retardant carpets in association with certain customers, working on the individual components and especially on latexes. The combination of additives to meet the performance demands of the market, meaning a reduction in the weight of the finished product and passing the flammability tests required by the airlines.

5. Development of a BCF fibre with stain-resistant and water-repellent properties, based on existing products and introducing improvements in product performance, by validating options for surface treatments available on the market.

6. Development of new NTF fibres with high conductivity for application in the carpet industry, and testing of functionality by industrial partners in accordance with ISO standards.

Pag. 31 di 246

7. Study and engineering of polyamide 6 stabilising molecules aimed at increasing the UV and heat resistance for outdoor applications of nylon textile fibres (NTFs).

8. Along with industrial partners, joint development of new types of high resistance polyamide 6 fibres for specific technical applications.

9. Study of innovative auxiliary products, including those of a natural origin, aimed at improving the chemical and physical characteristics of BCF and NTF yarns.

10. Optimisation of the opacifier master batch production method in order to produce nylon textile filaments (NTF) by way of the development and application of technologically innovative solutions.

11. Research and development of ECONYL® PA6-based materials (with special additives developed in-house) that can be used in 3D printing. What sets these materials apart is that they can be regenerated using the ECONYL® process, without the need for pre-separation of the various components. The compound created was the subject of a patent application filed in November 2022, and is awaiting publication, expected in May 2024.

12. Study and development of “cast” nylon based on polyamide 6 ECONYL® with high mechanical performance, conducted in collaboration with the University of Trento’s Department of Mechanical and Industrial Engineering, to produce mono-material composite polymers that can be fully regenerated using the ECONYL® process;

A new mould was developed in 2023 to secure fibres with greater thermal control uniformity, in order to improve single-material composites. This has allowed various types of fibres to be tested in the Cast Nylon composite, both in terms of section and resistance. A scientific article has been published on this project in association with the University of Trento. A multipurpose pilot plant suitable also for moulding ECONYL® anionic rods and sheets was set up at Aquafil SpA.

Pag. 32 di 246

13. A standard methodology was developed to determine the microplastics present in various matrices (solids, liquids, gases). H1 2023 saw the draft version revised to its final editorial version, which was submitted for final ISO voting (duration 3 months). In H2 (September 2023) the final version of method ISO 4484-2:2023 was published and in November 2023 the relative UNI publication, UNI ISO 4484-2:2023 was released. The work permitted the publication of several scientific articles and making an important contribution to a few chapters of a book on the subject of microplastics.

14. “EFFECTIVE” project, coordinated by AquafilSLO and financed by the Circular Bio-based Europe (CBE, previously the Bio-Based Industries Joint Undertaking - BBI JU) public-private partnership between the European Union and a consortium of circular bio-economics enterprises and research centres) under the EU research programme Horizon 2020 aimed at developing fibres and films for consumer goods derived from bio-polyamides and bio-polyesters that fit within the circular economy. The project ended in February 2023, demonstrating the technical feasibility of producing bio polyamide 6 and 6.9 on a demo scale. Bio-Nylon 6 polymers have been successfully validated for the production of prototype textile flooring, textiles and sportswear (swimsuits and technical sportswear), and eyewear frames. Bio-PA6.9 polymers and PA6.9-6 copolymers were found to be useful materials for special applications (e.g. hot melt) due to their random structure and melting points that are much lower than standard polyamides. Some specific development of these particular copolyimides has therefore continued, especially for 3D printing applications.

15. “Organic caprolactam” project in collaboration with Genmatica Inc., in San Diego, California (USA). 2023 saw the completion of the validation tests of the bio polymer PA6 produced from bio-caprolactam, in the second campaign carried out in 2022 in the specially built demonstration plant at AquafilSLO. Product prototypes confirmed that the bio-polymer is usable both for spinning and Engineering Plastic using the standard machinery and conditions already used for traditional PA6. During the year, Genomatica and Aquafil have continued work to: a) improve yields and productivity of the microorganism which leads to the formation of the linear bio-intermediate 6-amino caproic acid (6-ACA); b) study the impact of byproducts in the linear intermediate on its cyclisation to caprolactam, and c) identify new bio-byproducts to stabilise the bio-polymer over time; d) optimise purification of raw bio-6-ACA, to obtain sufficient supply to improve the yield for industrial purposes in future cyclisation campaigns at the Ljubljana plant.

Pag. 33 di 246

16. Develop a technology to depolymerise PET: in 2023 in the Aquafil SpA plant, construction was completed of a innovative pilot plant for depolymerising PET in order to obtain the product “BHET”, similar to monomer (as it can be used for the polymerisation of new PET).

The procedure for obtaining REACH registration of BHET was also completed, and new analytical methods were developed to determine the quantities of BHET. The plan will be launched at the beginning of 2024 in order to optimise the process based on both the various source materials and based on the variety of colours used in the sectors that employ polyester (packaging, yarns for carpets, textile uses, etc.).

17. Development of a process to separate polymer fibres (as such and/or in the form of fabrics) from elastomers by means of liquid phases, avoiding the use of organic solvents. The process was found to be suitable for PA6, PA66 and PET-based fabrics and was therefore the subject of a special patent application filed in December 2022. The research and laboratory tests in 2023 led to the identification of parameters that must be optimised to improve the separation of elastomer, particularly from polyamide 6-based fabrics.

A project was launched to construct a specific industrial plan and the selection of the best technologies currently available is in progress.

Tests for the regeneration of PA6 fabrics were also carried out. This fabric can be derived from elastomer separation at the pilot plant, obtaining a standard quality monomer.

18. Research and development of processes aimed at the chemical recovery of polymers from polycondensation (polyamides and polyesters), also in composite form: this activity was undertaken in partnership with the University of Padua and the University of Trento and has produced two new patents held by Aquafil SpA.

In a parallel effort, in November 2023 a doctoral research degree course was lunched with the Department of Physics at the University of Trento on the topic of “Composition, structure and chemical recycling of polymers from polycondensation”. The work began with the analysis of the BHET obtained from PET regeneration, to identify any oligomers/impurities and will continue with analysis of the chemical structure of elastomer post-separation from the fabric.

Pag. 34 di 246

19. Development of a proprietary system (ATPD - Aquafil Technology Polymer Detector) for the on-field identification of various polymer classes with a specific algorithm developed for analysing the composition of various types of waste, with data traceability and cloud storage; the project had the objective of introducing the same system as the primary input control tool for plastic waste, with a view to reducing costs related to input control analysis while maintaining a high capacity for sorting various materials. Use of the tool was implemented at the plants of suppliers of materials for use in the ECONYL® regeneration process, reducing complaints and increasing transport efficiency. The check at the beginning of the load also allows the presence of materials that cannot be regenerated in the ECONYL® regeneration process to be minimised.

20. Identification, development and assessment of an appropriate pyrolysis technology for recovery and utilisation of by-products of the ECONYL® process, enabling the additional recovery of a monomer from the remaining portion of polyamide.

In 2023, a collaboration began to study the process and pyrolysis plant specifically dedicated to the residual material from the regeneration of polyamide 6.

21. Optimisation of polymerisation production processes, in order to reduce energy and water consumption.

22. As part of the ongoing improvement of the ECONYL® process, the caprolactam distillation and purification processes were optimised in order to reduce energy consumption and reduce the process by-products. In 2023, these studies enabled the start-up of a light by-product separation column, which reduces unblocking by improving monomer recovery. The purification and reuse processes of the water used for washing fishing nets were also redefined to reduce primary water consumption.

Finally, analysis and considerations were made of ECONYL® process technology data to identify correlations and cause/effect relationships between regenerated materials and properties of the final product. This seeks to create digital tools that can assist production management by increasing quality and minimising the quantities of product discarded based on quality parameters;

Pag. 35 di 246

23. Introduction of new processes designed to reduce costs relating to industrial water disposal at the AquafilSLO site of Ljubljana, working on both water reuse and reducing the variable cost share related to wastewater treatment.

Patent developments

The following is a list of the main patents that have been filed:

a) Patent on textile flooring waste treatment and recycling process.

Priority 17.07.2023.

The filing was made as a PCT international patent through the European patents office and the first opinion will be obtained by the end of 2024, to subsequently proceed with the extensions to the individual countries of interest.

b) Patent on the separation of elastomers from polymeric fabrics, with a particular focus on PA6 for recycling by means of the ECONYL® process.

Priority 09.12.2022, PCT filing 06.12.2023 (PCT/IB2023/062290).

In May 2023, the UIBM (Italiano Patent and Trademark Office) sent the opinion drawn up by the EPO and in December 2023, the responses were sent to the observations raised.

In December 2023, the PCT filing was made. International publication is expected to take place in June 2024, and entry into the national phases must be launched in the first half of 2025.

c) Patent on the composition of a compound for 3D printing that can be directly chemically recycled.

Priority 03.11.2022, PCT filing 31.10.2023 (PCT/IB2023/060952).

Pag. 36 di 246

In May 2023, the UIBM sent the opinion drawn up by the EPO, according to which all the claims are new and inventive. The PCT filing was therefore made in November 2023.

International publication is expected to take place in May 2024, and entry into the national phases must be launched in the first half of 2025.

d) Patent on the separation of fibreglass from polymers with a particular focus on PA6 for recycling by means of the ECONYL® process, with inventors Aquafil and University of Padua (Department of Industrial Engineering), but the exclusive property of Aquafil.

Priority 10.11.2021, PCT filing 10.11.2022 international publication WO/2023/084441.

International publication took place in 2023 (19.05.2023) and hence the ISA opinion has arrived. According to the opinion, all the claims are deemed new and inventive.

Entry into the national phases is planned for 2024 for the regions with high levels of availability of PA6 reinforced with fibreglass, in order to increase the sources of raw materials for ECONYL®: Europe, Eurasia (Russia and a further seven countries that were formerly part of the USSR), the USA, Canada, Brazil, China, Japan, South Korea, and India.

e) Patent on the catalyst synthesis for PET glycolysis, with inventors Aquafil and University of Padua (Department of Industrial Engineering), but the exclusive property of Aquafil.

Priority 17.05.2021, PCT filing 16.05.2022 international publication WO/2022/243832.

The national extensions were launched in the areas where polyester and processes for its chemical recycling play a key role; Europe, Eurasia, the USA, Canada, Mexico, Brazil, China, Japan, South Korea, Thailand, Indonesia, India, and Saudi Arabia.

In 2023, the opinions were received from the ISA (International Search Authority) and IPEA (International Preliminary Examining Authority) and in the first half the certification granting Italian patent was received (05.06.2023), following the responses given to the EPO (European Patent Office) opinion.

In the second half of 2023, the patent was published in Canada (18.10.2023) and Mexico (11.12.2023) and the subsequent publication will be that of South Korea in the short term.

Pag. 37 di 246

(f) Patent on the production process of a new multicomponent NTF fibre with reduced impact on GWP (global warming potential).

Priority and PCT filing 10.02.2021 international publication WO/2022/173379.

For the patent, the extension was launched in Europe, where, in 2023, publication was launched (20.12.2023)

g) Patent on synthesis of caprolactam from 6-ACA, principally designed for the production of caprolactam from raw material of plan origin, jointly owned by Aquafil and Genomatica.

Priority 28.12.2018, PCT filing 23.12.2019 international publication WO/2020/136547.

The national extensions were launched in the areas where there is production of caprolactam and available of renewable raw materials: Europe, Eurasia, the USA, Mexico, Brazil, China, Japan, South Korea, Thailand

In the two-year period 2021-2022, the patent was published in the countries of interest, whereas the first patents arrived in 2023: Eurasia (31.07.2023) and India (12.09.2023). In addition, Brazil has sent payment notifications for annual fees in connection with the patent grant.

h) Patent on improvements and optimization of solvent-free caprolactam purification technology.

Priority and PCT filing 15.12.2017, international publication WO/2019/117817.

For this patent, regional extensions were requested in the main areas where there are caprolactam production plants present, and in the two-year period 2020-2021 patents were obtained, in chronological order in the USA, Europe, Eurasia and Japan.

In 2023, a final opinion was received from the Chinese Patent Office. This followed the receipt of two opinions in 2022, which provided exhaustive answers and technical explanations, and in turn received a specific response. The patent was therefore also granted in China (12.05.2023), a key country for caprolactam production;

i) Patent on the recovery and separation of the waste components of end-of-life polyamide carpeting.

Priority and PCT filing 29.05.2017, international publication WO/2018/222142.

Pag. 38 di 246

For the patent, valid in the USA, a further patent application was made for additions to the same process, which led to the patent being granted in Europe (06.09.2023).

l) Patent on the recovery of copper from discarded fishing nets used to supply Econyl.

Priority and PCT filing 22.12.2016, international publication WO/2018/117978.

The patent was obtained in 2020 in the USA and in Japan, and in 2021 in China and Europe. The extension of the patent is currently under way to Chile and India (where the company is waiting for the patent office to carry out its work) and to Canada, where the patent grant is pending.

CORPORATE GOVERNANCE

For further information on corporate governance, reference should be made to the Corporate Governance and Ownership Structure Report, prepared in accordance with Article 123-bis of Legs. Decree 58/1998, approved by the Board of Directors, together with the Directors’ Report made available at the registered office of the company and on the Group website (https://www.aquafil.com/it/investor-relations/bilanci-e-relazioni).

Certain disclosure within the scope of the Corporate Governance and Ownership Structure report is covered by the “Remuneration Report” drawn up as per Article 123-ter of Legislative Decree 58/1998. Both reports, approved by the Board of Directors, are published in accordance with law on the company website

www.aquafil.com

OTHER INFORMATION

Management and co-ordination

Pag. 39 di 246

The Company is not subject to management and co-ordination pursuant to Article 2497 and subsequent of the Civil Code.

The parent company Aquafin Holding SpA does not exercise management and co-ordination over Aquafil as substantially operating as a holding company, without an independent organisational structure and, consequently, de facto does not exercise direct management over Aquafil SpA.

All of the Italian direct or indirect subsidiaries of Aquafil SpA have met the publication requirements under Article 2497-bis of the Civil Code, indicating Aquafil SpA as the company exercising management and co-ordination.

Treasury shares

At December 31, 2023, the Company holds a total of 1,278,450 treasury shares, comprising 2.4961% of the share capital, for a total value of Euro 8,612,054. 96,765 treasury shares were acquired in 2023, with a total equivalent value of Euro 597,523.

Group IRES (Corporate Income Tax) taxation procedure

Aquafil SpA is the consolidating company of the group taxation procedure, as chosen by Aquafin Holding SpA for the 2023-2025 three-year period in accordance with Articles 117 to 128 of Presidential Decree 917/1986, as amended by Legs. Decree No. 344/2003. Similarly, the companies Tessilquattro SpA and Bluloop Srl are consolidated companies within the Group taxation procedure, in accordance with the option exercised by Aquafin Holding SpA as consolidating company.

In preparing the interim financial statements of these companies, the effects of the transfer of the tax positions due to the consolidated tax accounts were taken into account; in particular, the subsequent accounts receivable from/payable to the consolidating company were recognised.

Pag. 40 di 246

Organisation, management and control model in accordance with Legs. Decree 231/2001

The Italian companies of the Aquafil Group have supplemented the organisation, management and control model as per Legislative Decree No. 231 of June 8, 2001, including the conduct code and operating procedures. Specifically, the Model provides for the drafting of a Code of Conduct, mapping of the corporate areas at risk, assessment of the control safeguards, and a disciplinary system to punish any offences. The Supervisory Board, appointed by the Board of Directors, is appointed to oversee its operation and update, and compliance with the law. The Model was adopted by means of a Board resolution in 2014 and was updated in 2023. It is application to Italian Group companies that have adopted it, whose employees may also use the whistleblowing system to report any offences. Over the last year, the model has been revised based on the extended catalogue of 231 offences provided for under Italian law. Specifically, three families of offences have been added to the list of predicate offences in the General Section of the Model: Crimes against cultural heritage; and Laundering of cultural property and devastation and looting of cultural and scenic heritage; Offences involving non-cash payment instruments. In relation to these offences, the Special Section of the Model has also been updated. This section describes the types of offence, risk areas and sensitive activities, and the existing safeguards, with general principles and specific protocols.

Application IFRS 17

It should be noted that from the analyses conducted, there are no transactions performed by the Group that fall under the scope of the new IFRS 17.

Impairment Test Procedure

Pag. 41 di 246

In order to conduct impairment tests for the purpose of verifying the recoverability of assets, as described below, the Parent Company has adopted specific, formal procedures as approved by the Board of Directors on February 15, 2019.

Article 15 of Consob Market Regulation No. (updated by Consob

Resolution No. 20249 of December 28, 2017): conditions for listing shares

of parent companies incorporated and regulated by the law of non-EU states.

In relation to the regulations concerning the conditions for the listing of companies that control companies constituted and regulated according to laws outside of the European Union and of significant importance for the purposes of the consolidated financial statements, it is reported that:• at December 31, 2023, the regulatory requirements of Article 15 of the Market Regulations apply to the Group's subsidiaries;

• appropriate procedures have been adopted to ensure full compliance with the aforementioned regulations.

RECONCILIATION BETWEEN THE PARENT COMPANY AND GROUP SHAREHOLDERS’ EQUITY AND OPERATING RESULT AT DECEMBER 31, 2023

A breakdown of the composition and movement of shareholders’ equity of the parent company and the Group consolidated financial statements at December 31, 2023 is presented in the following table:

(in thousands of Euro)

Shareholders’ Equity

Net Result

Pag. 42 di 246

Parent company net equity and net result

102,432

(5,641)

Consol. Adjustments on parent company

10,344

1,651

Elimination of carrying amounts of consolidated investments

Difference between Shareholders' Equity & Carrying amount

46,359

Pro-quota results of investees

(15,327)

Elimination of the effects of transactions between consolidated companies

Reversal of write-downs net of revaluations of investments

557

Inter-company dividends

(16,954)

Inter-company profit/(loss) included in inventories & other minor

(2,158)

9,865

Net equity and net result as per consolidated financial statements

125,253

(25,849)

Minority interest net equity and net result

Group net equity and net result

125,252

(25,849)

OUTLOOK

In 2023, Europe saw a rapid and major drop in the price of raw materials, which led to a significant mismatch between unit values of stock built up in 2022 and the market price, with a significant - although temporary - impact on the Group margin. The performance presented in this report reflects these trends but is in line with previous guidance.

Despite the uncertainty surrounding trends in raw materials, the company’s outlook for 2024–2025 is for volumes to grow across all three product lines. We expect the clothing-fibres market to recover in the EMEA and the United States, following the sharp downturn seen in 2023, as well as a new outlook for polymers, backed by the efforts of Engineering Plastics, and continuing growth in carpet fibres in the Asia–Pacific region.

Our goal is to reduce net debt by approximately Euro 50–60 million by 2025. This is to be achieved as a result of both increased EBITDA and broader optimisation efforts put in place throughout the period.

The company continues to monitor progress towards the targets of the business plan, including in light of the ongoing macroeconomic instability brought about by the current geopolitical uncertainty around the globe.

The initial months of the year are confirming the guidance presented last November.

Pag. 43 di 246

CONSOLIDATED BALANCE SHEET

(in thousands of Euro)

Notes

At December 31, 2023

At December 31, 2022

Intangible assets

7.1

19,080

21,596

Goodwill

7.2

15,103

15,647

Property, plant & equipment

7.3

251,604

247,469

Financial assets

7.4

534

831

of which parent companies, related parties, associates

318

Investments valued at equity

7.4

1,023

1,018

Other assets

7.5

426

of which parent companies, related parties

Deferred tax assets

7.6

18,545

11,519

Total non-current assets

305,889

298,506

Inventories

7.7

189,493

260,808

Trade receivables

7.8

26,206

28,553

of which parent companies, related parties

351

376

Financial assets

7.4

5,703

9,964

Tax receivables

7.9

1,619

580

Other assets

7.10

14,644

15,862

of which parent companies, related parties

5,854

247

Cash and cash equivalents

7.11

157,662

110,682

Assets held-for-sale

Total current assets

395,327

426,449

Total Assets

701,216

724,955

Share capital

7.12

49,722

Reserves

7.12

101,379

96,528

Group net result

7.12

(25,849)

29,151

Total parent share. equity

125,252

175,401

Minority interest shareholders’ equity

7.12

Minority interest net profit

7.12

Total consolidated net equity

125,253

175,402

Employee benefits

7.13

5,104

5,192

Financial liabilities

7.14

308,741

285,385

of which parent companies, related parties

3,217

5,262

Provisions for risks and charges

7.15

1,710

1,975

Deferred tax liabilities

7.6

13,324

9,237

Other liabilities

7.16

5,852

8,985

of which parent companies, related parties

Total non-current liabilities

334,731

310,774

Financial liabilities

7.14

103,161

83,146

of which parent companies, related parties

1,872

2,957

Current tax payables

7.9

1,219

3,630

Trade payables

7.17

116,006

126,840

of which parent companies, related parties

551

270

Other liabilities

7.16

20,846

25,163

of which parent companies, related parties

230

Total current liabilities

241,232

238,779

Total shareholders’ equity and liabilities

701,216

724,955

Pag. 44 di 246

CONSOLIDATED INCOME STATEMENT

(in Euro thousands)

Note

2023

of which non-recurring

2022

of which non-recurring

Revenues

8.1

571,806

209

684,074

1,160

of which related parties

283

435

Other revenues and income

8.2

8,902

676

13,031

218

of which related parties

Total revenues and other revenues and income

580,708

885

697,105

1,378

Cost of raw materials and changes to inventories

8.3

(291,620)

(269)

(317,815)

(480)

of which related parties

Service costs and rents, leases and similar costs

8.4

(126,907)

(2,065)

(168,472)

(1,581)

of which related parties

(524)

(465)

Labour costs

8.5

(125,034)

(3,004)

(126,875)

(1,565)

Other costs and operating charges

8.6

(3,644)

(493)

(4,038)

(653)

of which related parties

(70)

Amortisation & write-downs

8.7

(49,635)

(47,851)

(Provisions and write downs)/releases

8.8

1,002

(180)

Increase in internal work capitalised

8.9

6,271

5,687

Operating Profit/(loss)

(8,859)

(4,946)

37,561

(2,901)

Financial Income/(Charges) from Investments

of which related parties

183

Financial income

8.10

1,022

4,869

Financial charges

8.11

(19,041)

(8,368)

of which related parties

(146)

(140)

Exchange gains/(losses)

8.12

796

2,783

Profit/(loss) before taxes

(25,992)

(4,946)

36,868

(2,901)

Income taxes

8.13

143

(7,717)

Net profit/(loss)

(25,849)

(4,946)

29,151

(2,901)

Minority interest profit/(loss)

Group net result

(25,849)

(4,946)

29,151

(2,901)

Basic earnings/(loss) per share

8.15

(0.51)

0.57

Diluted earnings/(loss) per share

8.15

(0.51)

0.57

CONSOLIDATED COMPREHENSIVE INCOME STATEMENT

(in Euro thousands)

Notes

2023

2022

Profit/(loss) for the year

(25,849)

29,151

Actuarial gains/(losses)

(252)

724

Tax effect from actuarial gains and losses

(81)

Other income items not to be reversed to income statement in subsequent periods

(192)

643

Currency difference from conversion of financial statements in currencies other than the Euro

(11,511)

4,957

Total other components of comprehensive income

(11,703)

5,600

Comprehensive income/(loss)

7.12

(37,552)

34,751

Minority interest comprehensive income

Group comprehensive income

7.12

(37,552)

34,751

Pag. 45 di 246

CONSOLIDATED CASH FLOW STATEMENT

(in Euro thousands)

Note

At December 31, 2023

At December 31, 2022

Operating activities

Profit/(loss) for the year

7.12

(25,849)

29,151

of which related parties:

(367)

(57)

Income taxes

8.13

(143)

7,717

Financial (Income)/expenses on investments

(90)

(23)

of which related parties:

(90)

(183)

Financial income

8.10

(1,022)

(4,869)

of which related parties:

Financial charges

8.11

19,041

8,369

of which related parties:

146

140

Net exchange gains/(losses)

8.12

(796)

(2,783)

Asset disposal (gains)/losses

(177)

(183)

Provisions & write-downs/(Releases)

8.8

(1,002)

180

Write-downs of financial assets (receivables)

8.8

Amortisation, depreciation & write-downs of tangible and intangible assets

8.7

49,635

47,851

Cash flow from operating activities before working capital changes

39,597

85,410

Decrease/(Increase) in inventories

7.7

71,315

(83,469)

Increase/(Decrease) in trade payables

7.17

(10,834)

245

of which related parties:

281

(82)

Decrease/(Increase) in trade receivables

7.8

3,242

2,722

of which related parties:

(305)

Changes to assets and liabilities

(7,754)

(4,169)

of which related parties:

(5,837)

2,905

Net paid financial charges

(15,311)

(8,005)

Income taxes paid

(9,637)

(3,840)

Utilisation of provisions

(1,033)

(2,012)

Cash flow generated/(absorbed) from operating activities (A)

69,585

(13,118)

Investing activities

Investments in tangible assets

7.3

(29,157)

(34,864)

Disposal of tangible assets

7.3

608

384

Investments in intangible assets

7.1

(4,620)

(4,163)

Disposal of intangible assets

7.1

132

Aquafil Chile and Bluloop Effect

(146)

of which fixed assets

(37)

of which goodwill

of which liquidity

of which current assets

(109)

Investments in financial assets

7.4

(155)

(160)

Dividends received

183

of which related parties:

183

Cash flow generated by investing activities (B)

(33,221)

(38,634)

Financing activities

Drawdown non-current bank loans and borrowings

7.14

100,049

94,000

Repayment non-current bank loans and borrowings

7.14

(72,026)

(53,244)

Net changes in current and non-current financial assets and liabilities (including IFRS 16)

7.14

(4,818)

(19,462)

of which related parties:

(8,497)

(2,208)

Distribution of dividends

(11,992)

(6,046)

of which related parties:

(7,169)

(3,576)

Treasury share purchases

7.12

(597)

(5,470)

Cash flow from generated/(absorbed) by financing activities (C)

10,616

9,778

Net cash flow in the year (A)+(B)+(C)

46,980

(41,974)

Opening cash and cash equivalents

7.11

110,682

152,656

Closing cash and cash equivalents

7.11

157,662

110,682

Pag. 46 di 246

STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY

(in thousands of Euro)

Share capital

Legal reserve

Translation reserve

Share premium reserve

Listing cost reserve

FTA Reserve

IAS 19 Reserve

Treasury shares

Retained earnings

Net result

Total parent share. equity

Min. interest share. equity

Total consol. share. equity

December 31, 2021

49,722

700

(8,052)

19,975

(3,287)

(2,389)

(1,060)

(2,545)

88,367

10,670

152,101

152,102

Sale minority interest

Other changes

(5,470)

(5,405)

Allocation of prior-year result

558

10,112

(10,670)

Distribution dividends

(6,046)

Profit/(loss) for the year

29,151

Actuarial gains/(losses) employee benefits

643

Translation difference

4,957

Comprehensive income

4,957

643

29,151

34,751

At December 31, 2022

49,722

1,258

(3,095)

19,975

(3,287)

(2,389)

(417)

(8,015)

92,498

29,151

175,401

175,402

Sale minority interest

Other changes

(598)

(8)

(606)

Allocation of prior-year result

797

28,354

(29,151)

Distribution of dividends

(11,992)

Share capital increase

Profit/(loss) for the year

(25,849)

Actuarial gains/(losses) employee benefits

(192)

Translation difference

(11,511)

Comprehensive income

(11,511)

(192)

(25,849)

(37,552)

At December 31, 2023

49,722

2,054

(14,605)

19,975

(3,287)

(2,389)

(609)

(8,612)

108,852

(25,849)

125,252

125,253

Pag. 47 di 246

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.GENERAL INFORMATION

1.1 Introduction

Aquafil SpA, with registered office at Via Linfano, 9 – Arco (TN) – 38062 Italy, (“Aquafil”, “Company” or “Parent company” and, together with its subsidiaries, “Group” or “Aquafil Group”), renowned for the production and distribution of fibres and polymers, principally polyamide, is a joint stock company listed on the Italian Stock Exchange, STAR Segment since December 4, 2017, resulting from the business combination through merger by incorporation of Aquafil SpA (pre-merger), founded in 1969 in Arco (TN), into Space3 SpA, as an Italian registered Special Purpose Acquisition Company (SPAC), with efficacy from December 4, 2017. The duration of the Company is until December 31, 2100.

The majority shareholder of Aquafil SpA is Aquafin Holding SpA, with registered office in Via Leone XIII No. 14, 20145 Milan, Italy, which however does not exercise management and co-ordination activities. The ultimate Parent Company, which draws up specific consolidated financial statements, is GB&P Srl with registered office in Via Leone XIII No. 14, 20145 Milan, Italy.

The Aquafil Group produces and sells fibres and polymers, principally polyamide 6, on a global scale through the:

(i) BCF Product Line (carpet fibres), or synthetic yarns mainly intended for the textile flooring sector and used in “contract” segments (hotels, airports, offices, etc.), residential buildings and the automotive market;

(ii) NTF Product Line (clothing fibres), or synthetic yarns mainly intended for the clothing sector (sportswear, classic, technical or specialist apparel);

(iii) Polymers Product Line, or plastic raw materials, mainly targeting the engineering plastics sector for subsequent use in the moulding industry.

Group products are also sold on the market under the ECONYL® brand, which offers the Group’s products obtained by regenerating industrial waste and end-of-life products.

Pag. 48 di 246

The Group enjoys a consolidated presence in Europe, the United States and Asia.

1.2Consolidated Financial Statement Presentation

These consolidated financial statements were prepared for the year ended December 31, 2023 (“Consolidated Financial statements”) in accordance with EU Regulation 1606/2002 of July 19, 2022 and Article 9 of Legislative Decree No. 38 of February 28, 2005, in compliance with International Financial Reporting Standards, issued by the International Accounting Standards Board and endorsed by the European Union (“IFRS”).

The Consolidated Financial Statements were approved by the Board of Directors of the company on March 14, 2024 and audited by PricewaterhouseCoopers SpA, statutory auditors of the company.

2. ACCOUNTING POLICIES AND MEASUREMENT CRITERIA

The main accounting policies adopted in the preparation of the Consolidated Financial Statements are reported below. These accounting policies were applied in line with the year 2022 and those applied at December 31, 2023.

2.1 Basis of preparation

As previously indicated, these consolidated financial statements were prepared in accordance with IFRS, i.e. all “International Financial Reporting Standards”, all “International Accounting Standards” (“IAS”), all interpretations of the International Reporting Interpretations Committee (“IFRIC”), previously called the Standards Interpretations Committee (“SIC”) which, at the approval date of the Consolidated Financial Statements, were endorsed by the European Union pursuant to EU Regulation No. 1606/2002 of the European Parliament and European Council of July 19, 2002.

These consolidated financial statements were prepared:

Pag. 49 di 246

•on the basis of extensive knowledge on the IFRS and taking into account best practice; any further orientations and interpretative updates will be reflected in subsequent years, in accordance with the provisions of the accounting standards;

•under the historical cost convention, except for the measurement of financial assets and liabilities where the obligatory application of the fair value criterion is required;

•on a going-concern basis of the Group, as the directors verified the absence of financial, operating or other indicators which may suggest difficulties with regards to the Group’s capacity to meet its obligations in the foreseeable future and in particular in the next 12 months.

2.2 Form and content of the financial statements

The Consolidated Financial Statements were prepared in Euro, which corresponds to the principal currency of the economic activities of the entities within the Group. All the amounts included in the present document are presented in thousands of Euro, unless otherwise specified.

The financial statements and the relative classification criteria adopted by the Group, within the options permitted by IAS 1 “Presentation of financial statements” (“IAS 1”) are illustrated below:

•the consolidated balance sheet is presented with separation between “current and non-current” assets and liabilities;

•the consolidated income statement was prepared separately from the comprehensive income statement, and was prepared classifying operating costs by expense type;

•the comprehensive income statement which includes, in addition to the result for the period, also the changes to equity relating to income items which, in accordance with International Accounting Standards, are recognised under equity;

•the cash flow statement prepared in accordance with the “indirect method” .

The financial statements utilised are those which best represent the result, equity and financial position of the Group.

2.3Consolidation scope and basis of consolidation

The Consolidated Financial Statements includes the equity and financial position and results of the subsidiaries and/or associated companies, approved by the respective boards and prepared on the

Pag. 50 di 246

basis of the relative accounting entries and, where applicable, appropriately adjusted in line with international accounting standards IAS/IFRS.

The following table summarises, with reference to the subsidiaries and associated companies, details on company name, registered office, share capital, result from draft financial statements prepared for approval, direct and indirect holding, of the company and the consolidation method applied at December 31, 2023:

Company

Registered office

Share capital

Profit/(loss) for the year

Currency

Group holding

% of

votes

Method

of consol-

idation

Parent company:

Aquafil S.p.A.

Arco (ITA)

49,722,417

(5,641,004)

Euro

Subsidiary companies:

Aquafil SLO d.o.o.

Ljubjiana (SLO)

75,135,728

(19,939,623)

Euro

100.00%

Line-by-line

Aquafil USA Inc.

Cartersville (USA)

77,100,000

(53,733,531)

US Dollar

100.00%

Line-by-line

Tessilquattro S.p.A.

Arco (ITA)

3,380,000

(2,239,289)

Euro

100.00%

Line-by-line

Aquafil Jiaxing Co. Ltd.

Jiaxing (CHN)

531,408,631

100,003,421

Chinese Yuan

100.00%

Line-by-line

Aquafil UK Ltd.

Ayrshire (UK)

3,669,301

(2,531,588)

UK Sterling

100.00%

Line-by-line

Aquafil CRO d.o.o.

Oroslavje (HRV)

9,436,800

(2,744,981)

Euro

100.00%

Line-by-line

Aquafil Asia Pacific Co. Ltd.

Rayoung (THA)

53,965,000

35,062,158

Thai Baht

99.99%

Line-by-line

Aqualeuna G.m.b.H.

Berlin (DEU)

2,325,000

(699,781)

Euro

100.00%

Line-by-line

Aquafil Engineering G.m.b.H.

Berlin (DEU)

255,646

(983,758)

Euro

100.00%

Line-by-line

Aquafil Tekstil Sanayi Ve Ticaret A.S.

Istanbul (TUR)

1,512,000

(2,302,452)

Turkish Lira

99.99%

Line-by-line

Aquafil Benelux France B.V.B.A.

Harelbeke (BEL)

20,000

16,639

Euro

100.00%

Line-by-line

Cenon S.r.o.

Zilina (SVK)

26,472,682

(80,763)

Euro

100.00%

Line-by-line

Aquafil Carpet Recycling #1, Inc.

Phoenix (USA)

250,000

41,832,917

US Dollar

100.00%

Line-by-line

Aquafil Carpet Recycling #2, Inc.

Woodland California (USA)

250,000

9,556,018

US Dollar

100.00%

Line-by-line

Pag. 51 di 246

Aquafil Oceania Ltd.

Melbourne (AUS)

49,990

(24,231)

Australian Dollar

100.00%

Line-by-line

Aquafil India Private Ltd.

New Dehli (IND)

557,860

(*)

Indian Rupee

100.00%

Line-by-line

Aquafil O'Mara Inc.

North Carolina (USA)

36,155,327

(282,272)

US Dollar

100.00%

Line-by-line

Aquafil Carpet Collection LLC

Phoenix (USA)

3,400,000

4,217,087

US Dollar

100.00%

Line-by-line

Aquafil Japan Corp.

Chiyoda (JPN)

150,000,000

(260,967,066)

Japanese Yen

100.00%

Line-by-line

Bluloop S.r.l. Benefit Company

Arco (ITA)

50,000

(34,612)

Euro

100.00%

Line-by-line

Aquafil Chile S.p.A.

Santiago del Chile (CHL)

351,576,000

(80,812,755)

Chilean Peso

100.00%

Line-by-line

Associated companies:

Nofir AS

Bodo (NOR)

665,804

10,980,800

Corona Norvegese

31.66%

Shareholders’ Equity

Poly-Service S.a.S.

Lyon (FRA)

10,000

(*)

Euro

45.00%

Shareholders’ Equity

Companies under joint control:

Acca S.p.A.

Santiago del Chile (CHL)

1,000,000

(20,904,000)

Chilean Peso

50.00%

Shareholders’ Equity

(*) company no longer operative

The changes in the Aquafil Group consolidation scope for the year concerned:

-in January 2023, the company Acca SpA was incorporated, a joint venture between Aquafil Chile S.p.A. and its other equal partner Atando Cabos Chile SpA The company has its registered office in Santiago, Chile, and share capital of CLP 1 million. Its corporate purpose is the acquisition, storage and recycling of fishing nets, nautical ropes and other plastic waste.

-in August 2023, Aquafil SpA and Politecnici S.r.l. incorporated the company Poly-Service SAS, based in Lyon (France), with share capital of Euro 10,000. Aquafil SpA holds a 45% interest, with Politecnici S.r.l. holding 55%. The corporate purpose of the company is the design, production and marketing of plastics, rubber, nylon and related products, in addition to semi-finished, finished and recycled products based on plastics, particularly nylon, in addition to the collection of post-consumer plastics, rubber, nylon and related products and subsequent processing into secondary raw materials.

The main criteria adopted by the Group for the definition of the consolidation scope and the relative consolidation principles are illustrated below.

Pag. 52 di 246

Subsidiaries

A party controls an entity when it is: i) exposed, or has the right to participate, in the relative variable economic returns and ii) able to exercise its decisional power on the activities relating to the entity in order to influence these returns. The existence of control is verified where events or circumstances indicate an alteration to one of the above-mentioned factors determining control. Subsidiaries are consolidated under the line-by-line method from the date control is acquired and ceases to be consolidated from the date in which control is transferred to third parties. The year-end of the subsidiary companies coincides with that of the Parent Company. The criteria adopted for line-by-line consolidation were as follows:

•the assets and liabilities, and the charges and income of the companies are recorded line-by-line, attributing to the minority shareholders, where applicable, the share of net equity and net result for the period pertaining to them; this share is recorded separately in the net equity and in the income statement;

•the gains and losses, with the relative fiscal effect, deriving from operations between fully consolidated companies and not yet realised with third parties, are eliminated, except for losses which are not eliminated where the transaction indicates a reduction in the value of the asset transferred. The effects deriving from reciprocal payables and receivables, costs and revenues, as well as financial income and charges are also eliminated.

•with regard to equity investments acquired subsequent to the acquisition of control (non-controlling interest acquisitions), any difference between the acquisition cost and the corresponding portion of equity acquired is recognised to Group equity; similarly, the effects from the sale of the non-controlling share without loss of control are recognised to equity. Conversely, the sale of a share in investments which results in the loss of control are recognised in the comprehensive income statement:

(i)of any gains/losses calculated as the difference between the payment received and the corresponding share of consolidated net equity sold;

(ii)of the effect of the remeasurement of any residual investment in line with the relative fair value;

(iii)of any values recorded under other items of the comprehensive income statement relating to the investee which is no longer controlled and which must be reversed through the

Pag. 53 di 246

comprehensive income statement, or where the amount should not be reversed through the comprehensive income statement, to the net equity account “Retained earnings”.

The value of any investment maintained, aligned to the relative fair value at the date of loss of control, represents the new initial recognition value of the investment, which also constitutes the value for subsequent measurement in accordance with the measurement criteria applicable.

Associates and Joint Ventures

Associated companies are companies in which the Group has a significant influence, which is presumed to exist when the percentage held is between 20% and 50% of the voting rights. Associated companies are measured under the equity method and are initially recorded at cost. The equity method is as described below:

•the book value of these investments is aligned to the net equity of the company adjusted, where necessary, to reflect the application of IFRS and includes the recognition of the higher value attributed to the assets and liabilities and to any goodwill, identified on acquisition; in line with a similar process to that previously described for business combinations;

•the profits and losses pertaining to the Group are recognised when the significant influence begins and until the significant influence ceases to exist. In the case where, due to losses, the company valued under this method indicates a negative net equity, the carrying value of the investment is written down and any excess pertaining to the Group, where this latter is committed to comply with legal or implicit obligations of the investee, or in any case to cover the losses, is recorded in a specific provision; the equity changes of the companies valued under the equity method, not recorded through the income statement, are recorded directly in the comprehensive income statement;

•the gains and losses not realised, generated on transactions between the Company/Subsidiaries and investments measured under the equity method are eliminated based on the share pertaining to the Group in the investee, except for losses, when they represent a reduction in value of the underlying asset, and dividends which are fully eliminated.

When there is objective evidence of an impairment, the recovery is verified comparing the carrying value with the relative recoverable value adopting the criteria indicated in the paragraph “Impairments of tangible and intangible assets”. When the reasons for the impairment no longer

Pag. 54 di 246

exist, the investments are revalued within the limits of the write-downs, with effects recognised to the income statement.

The transfer of shareholdings resulting in the loss of joint control or significant influence over the investee company determines the recognition in the comprehensive income statement:

•of any gain/loss calculated as the difference between the amount received and the corresponding fraction of the carrying amount transferred;

•of the effect of the remeasurement of any residual investment in line with the relative fair value;

•of any values recorded under other comprehensive items related to the investee for which reclassification to the comprehensive income statement is envisaged.

The value of any equity investment aligned to its fair value at the date of the loss of joint control or significant influence, represents the new carrying amount and, therefore, the reference value for the subsequent valuation according to the applicable valuation criteria.

Once an equity investment, or a share of this equity, measured under the equity method is classified as held for sale in so far as it meets the criteria for such classification, the equity investment or share of equity, is no longer measured under the equity method.

Translation of foreign companies' financial statements

The financial statements of subsidiaries are prepared in the primary currency in which they operate. The rules for the translation of financial statements of companies in currencies other than the functional currency of the Euro are as follows:

•the assets and the liabilities were translated using the exchange rate at the balance sheet date;

•the costs and revenues were translated at the average exchange rate for the period;

•the “translation reserve” recorded among comprehensive income and, therefore, directly within shareholders’ equity, includes both the currency differences generated from the translation of foreign currency transactions at a different rate from that at the reporting date and those

Pag. 55 di 246

generated from the translation of the opening shareholders’ equity at a different rate from that at the reporting date;

•the goodwill, where existing, and the fair value adjustments related to the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the exchange rate at the reporting date.

The exchange rates utilised for the conversion of these financial statements are shown in the table below:

Rate at December 31, 2023

Average rate 2023

Rate at December 31, 2022

Average rate 2022

Thai Baht

37.97

37.63

36.84

36.86

Australian Dollar

1.63

1.57

1.52

US Dollar

1.11

1.08

1.07

1.05

Swiss Franc

0.93

0.97

0.98

1.00

Turkish Lira

32.65

25.76

19.96

17.41

Chilean Peso

977.07

908.20

913.82

917.86

Indian Rupee

91.90

89.30

88.17

82.69

UK Sterling

0.87

0.89

0.85

Japanese Yen

156.33

151.99

140.66

138.03

Chinese Yuan

7.85

7.66

7.36

7.08

Translation of balances in foreign currencies

Transactions in currencies other than the Euro are recognised at the exchange rate at the date of the transaction. Assets and liabilities denominated in currencies other than the Euro are subsequently adjusted to the exchange rate at the reporting date. Exchange differences are recognised to the income statement under “Exchange gains and losses”.

Business combinations

Business combinations are recognised in accordance with IFRS 3 (2008). Specifically, business combinations are recognised using the acquisition method, where the purchase cost (consideration transferred) is equal to the fair value, at the acquisition date, of the assets sold and of the liabilities incurred or assumed, as well as any equity instruments issued by the purchaser. The purchase cost includes the fair value of any potential assets and liabilities.

The costs directly attributable to the acquisition are recorded in the income statement. The consideration transferred and allocated recognises the identifiable assets, liabilities and contingent

Pag. 56 di 246

liabilities of the purchase at their fair value at the acquisition date. Any positive difference between the consideration transferred, measured at fair value at the acquisition date, compared to the net value of the identifiable assets and liabilities of the purchase measured at fair value, is recognised as goodwill or, if negative, in the Income statement. Where the business combination was undertaken in several steps, on the acquisition of control the previous holdings are remeasured at fair value and any difference (positive or negative) recorded in the Income statement. Any potential consideration is recognised at fair value at the acquisition date. Subsequent changes in the fair value of the potential consideration, classified as an asset or a liability, or as a financial instrument as per IFRS 9, are recorded in the Income statement. Potential consideration not within the scope of IFRS 9 is measured based on the specific IFRS/IAS standard. Potential consideration which is classified as an equity instrument is not remeasured, and, consequently is recorded under equity.

Where the fair value of the assets, liabilities and contingent liabilities may only be determined provisionally, the business combination is recorded utilising these provisional values. Any adjustments, deriving from the completion of the valuation process, are recorded within 12 months from the acquisition date, restating the comparative figures.

No business combinations were undertaken in the period.

2.4 Accounting principles and policies

The most significant accounting policies adopted in the preparation of the Consolidated Financial Statements are reported below.

CLASSIFICATIONS OF CURRENT AND NON-CURRENT ASSETS AND LIABILITIES:

The Group classifies an asset as current when:

•it is held for sale or consumption, in the normal operating cycle;

•it is principally held for trading;

•it is expected to be realised within 12 months from the reporting date; or

•it comprises cash or cash equivalents whose use is not restricted or restrictions such as to impede its use for at least 12 months from the reporting date.

Pag. 57 di 246

All assets that do not meet the conditions listed above are classified as non-current.

The Group classifies a liability as current when:

•it is expected to be settled within the normal operating cycle;

•it is principally held for trading;

•it must be settled within twelve months of year-end; or

•the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

All the liabilities which do not satisfy the above-mentioned conditions are classified as non-current.

INTANGIBLE ASSETS

An intangible asset is an asset without physical substance, identifiable, controlled by the Group and capable of generating future economic benefits. The requisite of identifiability is normally met when an intangible asset is:

•attributable to a legal or contractual right; or

•separable, that is, it can be sold, transferred, leased or exchanged independently.

Control over an intangible asset consists of the right to take advantage of future economic benefits arising from the asset and the possibility of limiting its access to others.

Intangible assets are initially recognised at purchase and/or production cost, including the costs of bringing the asset to its current use. All other subsequent costs are expensed in the income statement in the year incurred. Research expenses are recorded as costs when incurred.

An intangible asset, generated during a project’s development phase, which complies with the definition of development on the basis of IAS 38, is recognised as an asset if:

•the cost can be measured reliably;

•the product/process is technically feasible;

•it is likely that the company will obtain the future economic benefits that are attributable to the asset developed, and

Pag. 58 di 246

•where the company intends to complete the project’s development and has sufficient resources to do so.

The following main intangible assets can be identified within the Group:

Intangible assets with definite useful lives

Intangible assets with definite useful lives are recognised as cost, as previously described, net of accumulated amortisation and any impairment.

Amortisation begins when the asset is available for use and is recognised on a straight-line basis in relation to the residual possibility of use and thus over the estimated useful life of the asset; for the amount to be amortised and its recoverability the criteria to be utilised is that outlined, respectively, in the paragraphs “Property, plant and equipment” and “Impairment of property, plant and equipment and intangible assets” below.

The estimated useful life for the Group of the various categories of intangible assets is as follows:

Estimated useful life

Concessions, licences and trademarks

10 years

Development costs

5 years

Industrial patents & intellectual property rights

10 years

Other intangible assets

Duration of contract

The Group also recognises under intangible assets in progress development costs incurred for the research of specific new products and raw materials, whose commercial production or use has not yet commenced.

These costs are capitalised only when all of the following conditions set out in IAS 38 are met:

•the technical feasibility of developing new products and raw materials which will then be available for sale or use respectively;

•the Group's willingness to complete development, its ability to reliably assess the costs necessary for development and therefore the availability of sufficient technical and financial resources to execute it;

Pag. 59 di 246

•the forecast likely future economic benefits that new products and new raw materials will be able to generate through sale and use for commercial purposes, in order to at least ensure the full recovery of costs incurred.

Once the development project is completed and the related finished product begins to be sold or the raw material used, these costs will begin to be amortised over the foreseeable period over which they will generate economic benefits.

PROPERTY, PLANT & EQUIPMENT

Property, plant and equipment are measured at purchase or production cost, net of accumulated depreciation and any impairments. The purchase or production cost includes charges directly incurred for bringing the asset to their condition for use, as well as dismantling and removal charges which will be incurred consequent of contractual obligations, which require the asset to be returned to its original condition. The financial charges directly attributable to the acquisition, incorporation or production of property, plant and equipment whose realisation requires timeframes above one year, are capitalised and depreciated based on the useful life of the asset to which they refer.

The expenses incurred for the maintenance and repairs of an ordinary nature are charged to the income statement when they are incurred. The capitalisation of costs relative to the expansion, modernisation or improvement of the structural elements whether owned or leased, is solely made within the limits established to be separately classified as assets or part of an asset. The assets recorded in relation to leasehold improvements are amortised based on the duration of the rental contract, or on the basis of the specific useful life of the asset, if lower.

Depreciation is charged on a straight-line basis, which depreciates the asset over its economic/technical useful life. Applying the principle of the component approach, when the asset to be depreciated is composed of separately identifiable elements whose useful life differs significantly from the other parts of the asset, the depreciation is calculated separately for each part of the asset.

The estimated useful life of the main categories of property, plant and equipment is as follows:

Estimated useful life

Buildings and light constructions

10 - 17 - 33 - 40 years

General plant and machinery

7 - 8 - 10 - 13 years

Industrial and commercial equipment

2 - 4 - 8 years

Other assets

4 - 5 - 8 years

Pag. 60 di 246

Right-of-Use

Duration of contract

Land, including that adjacent to production facilities, is not depreciated. The useful life of property, plant and equipment is reviewed and updated, where necessary, at least at the end of each year.

A tangible fixed asset is eliminated from the financial statements when the asset is sold or when no expected economic benefits exist from its use or disposal. Any gains or losses (calculated as the difference between net income from sales and the net book value of the asset sold) are recognised in the income statement in the year of disposal.

LEASED ASSETS

International Accounting Standard IFRS 16 identifies the principles for the recognition, measurement and presentation in the financial statements of leasing contracts, as well as enhancing the relative disclosure requirements.

Specifically, IFRS 16 defines leasing as a contract which assigns to the client (lessee) the right-of-use of an asset for a set period of time in exchange for consideration, without distinguishing finance leases from operating leases such as rental and hire.

The definition of a contractual agreement as a lease transaction (or containing a lease transaction) is based on the substance of the agreement and requires an assessment of whether fulfilment of the agreement depends on the use of one or more specific assets and if the agreement transfers the right to use them.

Companies that operate as lessee therefore recognise in their financial statements, at the effective date of the lease, an asset representing the right to use of the asset (defined as the “Right-of-Use") and a liability, attributable to the obligation to make the payments provided for in the contract. The lessee should subsequently recognise the interest concerning the lease liability separate from the depreciation of the right-of-use assets. IFRS 16 also requires lessees to restate the amounts of the lease liability on the occurrence of certain events (e.g. a change to the duration of the lease, a change to the value of the future payments due to a change in an index or rate utilised to determine these payments). In general, the restatement of the amount of the lease liability implies an adjustment also to the right-of-use asset.

Pag. 61 di 246

Differing from that required for lessees, for the purposes of the preparation of the financial statements of lessors (the lessor), the new International Accounting Standard maintains the distinction between operating and finance leases as per IAS 17.

IMPAIRMENT OF INTANGIBLE AND TANGIBLE ASSETS

Intangible and tangible assets with definite useful life

A verification is carried out at each reporting date to establish whether there are indicators that tangible and intangible assets may have suffered an impairment. To this end, both internal and external sources of information are considered. With regard to the former (internal sources), obsolescence or the asset’s physical deterioration and any significant changes in the asset’s use and the asset’s economic performance in comparison to projections are taken into consideration. As regards external sources, the trend in the assets’ market prices, any technological, market or regulatory discontinuities, the trend in market rate interest rates or the cost of capital used to evaluate investments are considered.

Where these indicators exist, an estimate of the recoverable value of the above-mentioned assets is made, recording any write-down compared to the relative book value in the income statement. The recoverable value of an asset is the higher between the fair value, less costs to sell, and its value, determined discounting the estimated future cash flows for this asset, including, where significant and reasonably determinable, those deriving from the sale at the end of the relative useful life, net of any transaction costs. In defining the value in use, the expected future cash flows are discounted utilising a pre-tax rate that reflects the current market assessment of the time value of money, and the specific risks of the asset. For an asset that does not generate independent cash flows, the recoverable value is determined in relation to the cash generating unit to which the asset belongs.

Pag. 62 di 246

are firstly attributed to the reduction in the carrying value of any goodwill allocated and, thereafter, to a reduction of other assets, in proportion to their carrying value and in the limit of the relative recoverable value. When the reasons for the write-down no longer exist, the book value of the asset is restated through the income statement, up to the value at which the asset would be recorded if no write-down had taken place and amortisation or depreciation had been recorded.

Impairment test

The impairment test assesses whether there exist any indications that an asset may have incurred a reduction in value. For goodwill and any other indefinite useful life intangible assets an assessment should be made at least annually that their recoverable value is at least equal to the book value and, when considered necessary, or rather in the presence of trigger events (IAS 16 paragraph 9), the impairment test must be undertaken more frequently.

The goodwill arising from the business combinations (in previous years) was therefore subject to a recoverability test as per IAS 36 as indicated also in note 7.2 “Goodwill” below. In particular, it is noted that the recoverable value of a non-current asset is based on the estimates and on the assumptions utilised for the determination of the cash flows and of the discount rate applied. Where it is considered that the book value of a non-current asset has incurred a loss in value, the asset is written-down up to the relative recoverable value, estimated with reference to its utilisation and any future disposal, based on the most recent business plans.

In assessing the recoverable value of property, plant and equipment, of investment property, of intangible assets and of goodwill, the Group generally applies the criterion of the value in use.

The value in use is the present value of the expected future cash flows to be derived from an asset. In defining the value in use, the expected future cash flows are discounted utilising a pre-tax rate that reflects the current market assessment of the time value of money, and the specific risks of the asset.

The estimated future cash flows utilised to determine the value in use is based on the most recent business plans, approved by management and containing forecasts for volumes, revenues, operating costs and investments.

These forecasts cover the period of the next two years; consequently, the cash flows relating to the subsequent years are determined on the basis of a growth rate which does not exceed the average growth rate for the sector and the country.

Where the book value of an asset is higher that its recoverable value a loss in value is recognised which is recorded in the income statement.

Pag. 63 di 246

The loss in value of a cash generating unit are firstly attributed to the reduction in the carrying value of any goodwill allocated and, thereafter, to a reduction of other assets, in proportion to their carrying value. Considering that the production processes of the various companies of the Aquafil Group are closely interrelated and interdependent, as the significant level of intercompany transactions demonstrates, thereby enabling ongoing synergies and the sharing of capabilities and know-how, we have always defined a single CGU for the entire Group, given that there is no production unit or commercial area that could be seen as broadly autonomous from the rest. In fact, the Group operates under a unified strategy that arranges the various production sites into one overarching production process.

When the reasons for the write-down no longer exist, the carrying value of the asset is restated through the income statement, up to the value at which the asset would be recorded if no write-down had taken place and amortisation or depreciation had been recorded.

The original value of the goodwill is not restated even when in subsequent years the reasons for the reduction in value no longer exist.

SECURITIES OTHER THAN EQUITY INVESTMENTS

Any securities other than equity investments, included under “Financial assets”, are held in portfolio until maturity. They are recognised at acquisition cost (with reference to the “trading date”) including transaction costs.

LOANS, RECEIVABLES AND FINANCIAL ASSETS HELD-TO-MATURITY

The financial assets are measured based on IFRS 9.

The Group assesses at each reporting date whether a financial asset or a group of financial assets have incurred a loss in value.

Pag. 64 di 246

IMPAIRMENT OF FINANCIAL ASSETS

At each reporting date, all financial assets are analysed in order to verify whether they have suffered a loss in value. An impairment loss is recognised if, and only if, this evidence exists as a result of one or more events that have an impact on the asset’s expected future cash flows, occurring after its initial recognition.

In the valuation account is also taken of future economic conditions.

For financial assets accounted for through the amortised cost criterion, when a loss in value has been identified, its value is measured as the difference between the asset’s carrying amount and the present value of expected future cash flows, discounted on the basis of the original effective interest rate. This value is recognised in the income statement under the item "Provisions and write-downs". When, in subsequent periods, the reasons for the write-down no longer exist, the value of the financial assets are restated up to the value deriving from the application of the amortised cost criterion.

INVENTORIES

Inventories are recorded at the lower of purchase or production cost and realisable value represented by the amount that the Group expects to obtain from their sale in the normal course of operations of the assets, net of accessory costs. The cost of raw material inventories is calculated using the weighted average cost method. The value of finished or semi-finished product inventories includes direct or indirect processing costs. To determine the weighted average cost of production or processing, the Group considers the weighted average cost of the raw material and the direct and indirect production costs, generally taken as a percentage of direct costs.

The value of inventories was recorded net of any impairment provisions.

Pag. 65 di 246

TRADE AND OTHER RECEIVABLES (CURRENT AND NON-CURRENT)

Trade receivables and other current and non-current receivable are considered financial instruments, principally relating to customer receivables, non-derivative, not listed on an active market, from which fixed or determinable payments are expected. Trade receivables and other receivables are classified in the consolidated balance sheet under current assets, except for amounts due beyond 12 months from the reporting date, which are classified as non-current. These financial assets are recorded in the balance sheet when the Group becomes part of the related contracts and are derecognised when the right to receive the cash flow is transferred together with all the risks and benefits associated with the asset sold.

Trade and other current and non-current receivables are initially recorded at their fair value, and subsequently with the amortised cost method using the effective interest rate, reduced for any impairment.

Impairments on receivables are recognised in the income statement when there is objective evidence that the Group will not be able to recover the credit on the basis of contractual conditions.

The write-down amount is measured as the difference between the asset’s carrying amount and the present value of expected future cash flows.

The value of receivables is shown net of the corresponding doubtful debt provision.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash, on-demand deposits and financial assets with an original maturity of three months or less, readily convertible into cash and subject to an insignificant risk of changes in value. The items included in cash and cash equivalents are measured at fair value and the relative changes are recorded in the consolidated income statement.

EMPLOYEE BENEFITS

Pag. 66 di 246

For the defined benefit plans, which include post-employment benefit provisions due to employees pursuant to Article 2120 of the Italian Civil Code, the amount to be paid to employees is quantifiable only after the termination of the employment service period, and is related to one or more factors such as age, years of service and remuneration. Therefore, the relative charge is recorded in the income statement based on actuarial calculations. The liability recorded in the accounts for defined benefit plans corresponds to the present value of the obligation at the reporting date. The obligations for the defined benefit plans are determined annually by an independent actuary utilising the projected unit credit method. The present value of the defined benefit plan is determined discounting the future cash flows at an interest rate equal to the obligations (high-quality corporate) issued in Euro and takes into account the duration of the relative pension plan. The actuarial gains and losses deriving from these adjustments and the changes in the actuarial assumptions are recognised in the comprehensive income statement.

From January 1, 2007, the Finance Act and relative decrees enacted introduced important amendments in relation to post-employment benefits, among which was the choice given to the employee to determine where the benefit matured in the period is invested. In particular, the new post-employment benefits can be utilised by the employee for their own chosen pension scheme or they may choose to leave the amount in the company; in this case, when the company has more than 50 employees, those matured from 2007 are paid into INPS. In the case of allocation to external pension funds, the company is only liable to pay a defined contribution to the selected fund and as from that date, the newly matured portion are in the nature of defined contribution plans and are therefore not subject to actuarial valuation.

TRADE AND OTHER PAYABLES (CURRENT AND NON-CURRENT)

Financial liabilities (with the exclusion of derivative financial instruments) relate to trade and other payables and are initially recorded at fair value, net of directly allocated accessory costs. After initial recognition, they are measured at amortised cost, recording any differences between cost and repayment amount in the income statement over the duration of the liability, in accordance with the effective interest rate method. When there is a change in the expected cash flows, the value of the liabilities is recalculated to reflect this change, based on the new present value of the expected cash flows and on the effective internal rate initially determined.

Pag. 67 di 246

DERECOGNITION OF FINANCIAL ASSETS AND LIABILITIES

Financial assets (or, where applicable, part of a financial asset or part of a group of similar financial assets) are derecognised from the financial statements when:

•the right to receive the financial flows of the asset terminate;

•the Group retains the contractual right to receive the cash flows from the asset, but assumes a contractual obligation to pay the cash flows fully and without delay to a third party;

•the Group has transferred its right to receive the cash flows from the asset and (a) has transferred substantially all of the risks and rewards of ownership of the financial asset or (b) has not transferred or retained substantially all of the risks and rewards of the asset, but has transferred control over same.

A financial liability is derecognised from the financial statements when the underlying liability is settled, cancelled or fulfilled.

DERIVATIVE FINANCIAL INSTRUMENTS

Derivative financial instruments are only used by the Aquafil Group for the hedging of financial risks related to interest rate fluctuations on bank debt.

A derivative is a financial instrument or other contract:

•whose value changes in response to changes in an underlying defined parameter such as the interest rate, the price of a security or commodity, foreign currency exchange rate, the index of prices or rates, credit rating or another variable;

•that requires a zero initial net investment, or lower than what would be required for contracts with a similar response to changes in market conditions;

•which is settled at a future date.

The Group’s financial derivative instruments are undertaken to hedge against the interest rate risk. In accordance with IAS 39, which remains applicable optionally with respect to IFRS 9 in the case of the hedging of interest rate exposure, derivative financial instruments are accounted for in accordance with the procedures established for hedge accounting only when:

•the hedging instrument is formally designated and documented at the start of hedging;

•the hedge is expected to be highly effective;

Pag. 68 di 246

•such efficacy can be reliably measured;

•the hedge is highly effective during the various accounting periods for which it is designated.

It should be noted that the derivative instruments currently in place (IRS - Interest Rate Swaps and IRC – Interest Rate Collar), although subscribed for hedging purposes with regard to changes in interest rates, have been treated, for accounting purposes and consistently with the past, as non-hedging instruments (and therefore the relative fair value is recognised in the income statement), as it is very complex to prepare the mandatory hedging relationship.

MEASUREMENT OF THE FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value measurement of the financial instruments is undertaken applying IFRS 13 “Fair value measurement” (IFRS 13). Fair value concerns the price that will be received for the sale of an asset or which will be paid for the transfer of a liability in an ordinary transaction settled between market operators, at the measurement date.

Fair value measurement is based on the assumption that the sale of the asset or transfer of the liability is undertaken on the principal market, or rather the market in which the largest volume and levels of transaction take place for the asset or liability. In the absence of a principal market, it is assumed that the transaction takes place on the most advantageous market to which the Group has access, or rather the market which would maximise the results of the sales transaction of the asset or minimise the amount to be paid for the transfer of the liability.

The fair value of an asset or of a liability is determined considering the assumptions which the market participants would use to define the price of the asset or of the liability, under the presumption that they act in accordance with their best economic interests. Market participants are independent knowledgeable acquirers or sellers able to enter into a transaction for the asset or the liability and motivated but not obliged or coerced into making the transaction.

In the fair value measurement, the Group takes into account the specific characteristics of the asset or the liability, in particular, for the non-financial assets, the capacity of a market operator to generate economic benefits utilising the asset to its maximum and best use or by selling to another market operator that would utilise the asset to its maximum or best use. The fair value measurement of assets and liabilities utilises appropriate techniques for the circumstances and for which sufficient data is available, maximising the use of observable inputs.

IFRS 13 identifies the following fair value hierarchy which reflect the importance of the inputs used in the relative measurement:

Pag. 69 di 246

•Level 1 Quoted Price (active market): data used in valuations are represented by prices quoted on markets in which identical assets and liabilities are traded with those being valued.

•Level 2 Use of Observable Market Parameters (for example, for derivatives, the exchange rates recorded by the Bank of Italy, market interest rate curves, volatility provided by qualified providers, credit spreads calculated on the basis of CDS’, etc.) other than level 1 quoted prices.

•Level 3 Use of Non-Observable Market Parameters (internal assumptions, for example, financial flows, risk-adjusted spreads, etc.).

WARRANTS

The company has issued warrants, that is, financial instruments that give the holder the right to purchase (call warrants) a determined quantity of ordinary shares (underlying) at a predefined price (strike-price) within a set deadline. The warrants issued were of two types: "Market warrants," which were also listed and were fully cancelled in FY2022 due to expiration of the term, and unlisted "Sponsor warrants" which remain outstanding.

These financial instruments can have different terms and characteristics and, on the basis of these, can be alternatively considered as: (i) a financial liability that must therefore be measured at fair value at the time of issue and any subsequent variation recorded directly in the income statement, or as (ii) an equity instrument and therefore classified in a specific equity reserve from which they will be released only at the time they are exercised or on their maturity as indicated by IAS 32.

Warrants issued by the company have the characteristics to be considered as equity instruments since both instruments contain a pre-set execution value (defined as the "fixed for fixed criteria").

Specifically for the Sponsor warrants, an exchange between equity instruments and cash at an already pre-determined value is provided in case of execution. Information on these instruments is available in the paragraph on shareholders’ equity.

PROVISION FOR RISKS AND CHARGES

Pag. 70 di 246

Provisions for risks and charges relate to costs and charges of a defined nature and of certain or probable existence whose amount or date of occurrence are uncertain at the reporting date. Accruals to provisions are recorded when:

•the existence of a present obligation, legal or implicit, deriving from a past event is probable;

•it is probable that compliance with the obligation will result in a charge;

•the amount of the obligation can be estimated reliably.

Provisions are recorded at the value representing the best estimate of the amount that the entity would reasonably pay to discharge the obligation or to transfer it to a third party at the reporting date. When the financial effect of the passing of time is significant and the payment dates of the obligations can be reliably estimated, the provision is determined by discounting the expected cash flows taking into account the risks associated with the obligation; the increase of the provision due to the passing of time is recorded in the income statement in the account “Financial charges”.

The provisions are periodically updated to reflect the changes in the estimate of the costs, of the time period and of the discounting rate; the revision of estimates is recorded in the same income statement accounts in which the provision was recorded.

REVENUES AND COSTS

Revenues from the sale of goods and services as well as the purchase costs of goods and services are recognised on the transfer of control of the relative goods or completion of the service.

Revenues are shown net of discounts, allowances and returns; they are recorded at fair value to the extent in which it is possible to reliably determine such value and the likelihood that the relative economic benefits will be enjoyed. Revenues are recognised in accordance with IFRS 15 and therefore as per the following 5 steps:

1)identification of the contract with the customer. The standard contains specific provisions to assess whether two or more contracts should be combined and to identify the accounting implications of any contractual amendments;

2)identification of the contractual obligations contained in the contract;

3)calculation of the transaction price, which should be made taking into consideration, among others, the following elements: any amounts paid on behalf of third parties, which must be excluded from the consideration, variable price components (such as performance bonuses, penalties, discounts, reimbursements, incentives, etc...) and any financial component, present where the payment terms granted to the customer contain a significant extension period;

Pag. 71 di 246

4)allocation of the transaction price to the contractual obligations, on the basis of the stand-alone sales price of each good or service; separately;

5)recognition of the revenue, when (or if) each contractual obligation is satisfied through the transfer of the goods or service, which occurs when the customer obtains the control and therefore has the capacity to decide upon and/or control its use and substantially obtain all the benefits. Control may be transferred at a specific point in time or over time.

The analysis undertaken indicated that the obligations arising for the Group companies to its clients mainly concern the production and supply of finished products according to the terms and conditions requested, and in particular:

•payment deadlines are on average between 45 and 60 days, in line with generally applied market averages. “Cash discounts” are contractually granted in the case of early settlement and were recognised as a direct reduction in revenues. No payment deferments are granted which could be considered as qualifying as a loan;

•the finished product is sold without the granting of warranty periods and/or without return and/or suspension of ownership clauses. Any returns and reimbursements are agreed among the parties on a case by case basis following critical analysis of the reasons which may have resulted in any non-compliance issues.

It is therefore considered that:

(i)the moment of transfer of control to clients of their products coincides with the transfer of the associated risks and benefits, as contractually defined by the delivery terms applied and which are in line with those generally accepted within the sector;

(ii)the consideration does not include any financial component, with the exception of the cash discounts which are recognised as a reduction in revenues, while the component of the transport service and insurance (applicable only with specific delivery terms) is however completed in the same period as the transfer of control of the goods and therefore accrues to the same period;

(iii)no contractual obligations are in place which suspend the transfer of control of the goods and therefore only the returns/reimbursements that may be agreed (concerning the goods sold in the year) may be recognised as a reduction of the relative revenues.

Pag. 72 di 246

Costs incurred by the company however are recognized on an accrual basis.

FINANCIAL INCOME AND CHARGES

Financial income and charges are recognized in the income statement in the period in which they are earned or incurred according to IFRS 9.

DIVIDENDS

Dividends received are recognised when (i) shareholders become entitled to receive the payment, which coincides with the date of the investee company’s shareholders’ meeting approving distribution, (ii) it is probable that the economic benefits associated with the dividend will flow to the entity and (iii) the amount of the dividend can be measured reliably.

The distribution of dividends to Aquafil SpA’s shareholders is represented as a movement of shareholders’ equity and recorded as a liability in the financial year in which this distribution is approved by the Shareholders’ Meeting.

INCOME TAXES

Current taxes are determined on the basis of estimated taxable income, in compliance with tax regulations applicable to Group companies and are recorded in the consolidated income statement under the item "Income taxes for the year", with the exception of those relating to items directly debited or credited to a shareholders’ equity reserve; in such cases, the relative tax effect is directly recognised in the respective shareholders’ equity reserves. The consolidated comprehensive income statement shows the amount of income taxes for each item included in the "other components of the consolidated comprehensive income statement".

Pag. 73 di 246

taxes, when the income tax is applied by the same fiscal authority, there is a legal right of compensation and the payment of the net balance is expected. Deferred tax assets and liabilities are calculated utilising the tax rates which are expected to be applied in the years when the temporary differences will be realised or settled, taking into account current tax regulations or substantially in force at the reporting date. Other taxes not related to income, such as indirect taxes and duties are included under “Other operating costs and charges”.

From the year 2018, the Parent Company was included in the tax consolidation regime with the holding company Aquafin Holding SpA. This was interrupted in 2017 due to its merger by incorporation into Space3 SpA. The tax consolidation regime is also confirmed for the year 2023.

Therefore, the consolidated financial statements take account of the effects of the transfer of tax positions arising from the “tax consolidation” and specifically recognise the consequent credit/debit relationships towards the tax consolidating company.

In addition, in relation to the Parent Company, it should be noted that Article 12 of Legislative Decree No. 142 of 29/11/2018 defined the concept of "non-financial holding companies” ("Industrial Holdings"), for which, "the prevalent exercise of acquiring investments in parties other than financial intermediaries exists when, based on the figures of the last approved year-end financial statements, the total amount of investments in these parties and other equity elements undertaken between them, considered as a whole, is higher than 50 per cent of the total assets on the balance sheet", with effect from the year 2018.

Due to this amendment by Legislative Decree 142/2018, therefore, as of the year 2018, previously excluded companies fall under "industrial holdings" and particularly those which have holdings but whose financial income predominantly comprises revenues from industrial activity.

The Parent Company which qualifies as an "Industrial Holding" must calculate the Irap taxable base in accordance with Article 6, paragraph 9 of the Irap Decree, that is, by adding to the normally determinable taxable base, 100% of the interest income and other financial income and subtracting 96% of the interest expense and similar charges; in addition, the increased rate envisaged for banks and other financial institutions must be applied to the value of production relevant for IRAP purposes. It should be noted that also for 2023, the IRAP rate for the industrial holding companies in the province of Trento, applicable to non-financial holding companies and similar entities pursuant to paragraph 9 of Article 6 of Legislative Decree No. 446/97 is 4.65%, and the benefits normally granted to industrial companies are not applied.

Pag. 74 di 246

ASSETS AND LIABILITIES AVAILABLE FOR SALE AND DISCONTINUED OPERATIONS

Non-current assets and current assets and non-current assets of discontinued operations are classified as held-for-sale where their book value will principally be recovered through sale. This condition exists when the sale is highly probable and the asset or discontinued operation is available for an immediate sale in its current conditions. Non-current assets held-for-sale, current assets and non-current assets of discontinued operations and the liabilities directly related to them are recorded separately to company assets and liabilities in the balance sheet.

Any non-current assets held-for-sale are not depreciated and are valued at the lower of the subscription value and their fair value, less selling costs.

Any difference between the book value and the Fair Value less selling costs is recorded in the income statement as a write-down; any subsequent recoveries in value are recognised for the amount of the write-downs previously recorded, including those recognised before the definition of the asset as held-for-sale.

Non-current assets and current and non-current assets of disposal groups classified as held-for-sale constitute discontinued operations if, alternatively:

•they represent a significant autonomous branch of activity or a significant geographical area of activity; or

•is part of a disposal programme of an important independent activity or geographical area of activity;

•are a subsidiary acquired exclusively for the purpose of sale.

The results of discontinued operations, as well as any capital gain/loss realised following disposal, are shown separately in the income statement under a specific account, net of the related tax effects; the income statement values of discontinued operations are also presented for the comparative years.

Pag. 75 di 246

If there is a plan to sell a subsidiary that results in the loss of control, all the assets and liabilities of that subsidiary are classified as held-for-sale.

It should be noted that at December 31, 2023, the Aquafil Group had only assets held-for-sale consisting of machinery and equipment and had no discontinued operations.

EARNINGS PER SHARE

a)Basic earnings per share

The basic earnings per share is calculated by dividing the result of the Group by the weighted average number of ordinary shares outstanding during the year, excluding treasury shares.

b)Diluted earnings per share

The diluted earnings per share is calculated by dividing the result of the Group by the weighted average number of ordinary shares outstanding during the year, excluding treasury shares. In order to calculate the diluted earnings per share, the average weighted number of shares outstanding is adjusted assuming the exercise of all the rights which have potential dilution effect, while the result of the Group is adjusted to take into account the effects, net of income taxes, of the exercise of these rights.

USE OF ACCOUNTING ESTIMATES

The preparation of the financial statements requires the directors to apply accounting principles and methods that, in some circumstances, are founded on difficult and subjective valuations and estimates, based on historical experience and assumptions which are from time to time considered reasonable and realistic under the relative circumstances. The application of these estimates and assumptions impact upon the amounts reported in the financial statements, the balance sheet, the income statement, the comprehensive income statement, the cash flow statement, the statement of changes to shareholders’ equity and the notes to the accounts. The final outcome of the accounts in the financial statements which use the above-mentioned estimates and assumptions may differ, even significantly from those reported in the financial statements due to the uncertainty which characterises the assumptions and the conditions upon which the estimates are based.

Pag. 76 di 246

Numerous items in the financial statements are subject to estimates and while not all of these accounts are individually significant, they are significant on an overall basis. The accounting policies which require greater subjectivity by the directors in the preparation of the estimates and for which a change in the underlying conditions or the assumptions may have a significant impact on the financial results of the Group are briefly described below.

Impairments

The tangible and intangible assets with definite useful lives and goodwill are verified to ascertain if there has been a loss in value, which is recorded by means of a write-down, when it is considered there will be difficulties in the recovery of the relative net book value through use. The verification of such difficulties requires the directors to make valuations based on the information available within the Group and on the market, as well as from historical experience. In addition, when it is determined that there may be a potential reduction in value, the Group determines this through using the most appropriate technical valuation methods available. The correct identification of the indicators of a potential reduction in value of tangible and intangible assets, as well as the estimates for their determination depends on factors which may vary over time, impacting upon the valuations and estimates made by the directors.

Amortisation & Depreciation

The cost of property, plant and equipment and intangible assets is depreciated or amortised on a straight-line basis over the estimated useful life of the asset. The useful life of these assets is determined by the directors when the assets are purchased. This is based on the historical experience for similar assets, market conditions and considerations relating to future events which could have an impact on the useful life, such as changes in technology. Therefore, the effective useful life may differ from the estimated useful life.

Inventories

Pag. 77 di 246

Inventories of products which are obsolescence or slow moving are periodically subject to valuation tests and written down when the recoverable value is lower than the carrying amount. The write-downs are made based on assumptions and estimates of the directors deriving from experience and historic results and compared with market values.

Doubtful debt provision

the recoverability of receivables is valued taking account of the non-payment risk, of aging of receivables and of the losses recorded in the past on similar receivables.

Provisions for risks and charges

Provisions for risks and charges are recorded to cover known or likely losses or liabilities, the timing and extent of which are not known with certainty at the reporting date.

They are recorded only where a present obligation exists (legal or implicit) for a future payment resulting from past events and it is probable that the obligation will be settled. This amount represents the best estimate of the costs required to settle the obligation. The rate used in the determination of the present value of the liability reflects the current market values and the specific risk associated to each liability.

If the financial effect of the period is significant and the payment dates of the obligations can be reliably estimated, the provisions are valued at the present value of the expected payment, utilising a rate which reflects market conditions, the change in the cost of money in the period and the specific risk related to the obligation. The increase in the value of the provision from changes in the cost of money in the period is recognised as a financial charges.

Possible risks that may result in a liability are disclosed in the notes on potential liabilities without any provision.

Deferred tax assets

Pag. 78 di 246

Deferred tax assets are recognized with respect to deductible temporary differences between the values of assets and liabilities expressed in the financial statements compared to the corresponding tax value and tax losses that can be carried forward, to the extent that the existence of adequate future taxable profit is likely, with respect to which these losses may be used. A discretionary assessment is required of the directors to determine the amount of deferred tax assets that can be accounted for, which depends on the estimate of probable timing and the amount of future taxable profits.

2.5Accounting standards not yet applicable

The developments in the IFRS and the relative interpretations (IFRIC) applicable from periods beginning after December 31, 2023 are outlined below.

Document endorsed by the EU at November 30, 2023

Document title

Issue date

Effective date

Endorsement date

EU Regulation and publication date

Notes and references to this checklist

Lease Liabilities in a Sale and leaseback transaction (Amendments to IFRS 16)

September 2022

January 1, 2024

November 20, 2023

(EC) 2023/2579

November 21, 2023

See point

535

At the reporting date, the European Union had not yet completed its endorsement process for the adoption of the following standards and amendments:

Issue date

Expected endorsement date

Document title

by the IASB

Effective date of the IASB document

by EU

Standards

IFRS 14 Regulatory Deferral Accounts

Jan 14

January 1, 2016

Postponed pending the new accounting standard on "rate-regulated activities".

Amendments

Pag. 79 di 246

Sale or contribution of assets between an investor and its associate or joint venture (Amendments to IFRS 10 and IAS 28)

Sep 14

Postponed until the completion of the IASB project on the equity method

Endorsement process postponed pending the conclusion of the IASB project on the equity method

Jan 20

Jul 20

Classification of liabilities between current and non-current (Amendments to IAS 1) and non-current liabilities with covenants (Amendments to IAS 1)

Oct 22

Jan 1, 24

Q4 2023

Financial Arrangements with Suppliers (Amendments to IAS 7 and IFRS 7)

May 23

Jan 1, 24

TBD

Lack of convertibility (Amendments to IAS 21)

Aug 23

Jan 1, 25

TBD

3.FINANCIAL RISK MANAGEMENT

The principal business risks identified, monitored and, as illustrated below, actively managed by the Group are as follows:

•market risk, deriving from fluctuations in exchange rates between the Euro and the other currencies in which the Group operates, the interest rate and raw material prices;

•Counterparty default risk;

•liquidity risk, deriving from insufficient financial resources to meet financial commitments.

The Group’s objective is to maintain a balanced management of its financial exposure over time to ensure a liability structure that is in equilibrium with the composition of assets and capable of ensuring the necessary operational flexibility through the use of liquidity generated by current operating activities and recourse to bank financing.

The ability to generate liquidity from ordinary operations and debt capacity allow the Group to adequately meet its operational requirements, the financing of operating working capital and investment capital, and to meet its financial obligations.

The Group’s financial policy and management of the relative financial risks are guided and monitored at central level. In particular, the central finance function is tasked with evaluating and approving forecast financial needs, monitoring the trend and, where necessary, implementing suitable corrective actions.

Pag. 80 di 246

The following section provides qualitative and quantitative information on the impact of these risks on the Group.

3.1. Market risk

3.1.1.Currency risk

Exposure to the risk of exchange rate variations arises from the Group’s commercial activities which are also carried out in currencies other than the Euro. Revenues and costs denominated in foreign currencies may be influenced by exchange rate fluctuations with an impact on trade margins (economic risk), just as trade and financial payables and receivables denominated in foreign currency may be affected by the conversion rates used, with an effect on the economic result (transaction risk). Finally, exchange rate fluctuations also reflect on the consolidated results and shareholders’ equity since the financial statements of certain Group companies are drawn up in currencies other than the Euro and are subsequently converted (translation risk).

The principal exchange rates the Group is exposed to are:

-EUR/USD, in relation to transactions carried out in US Dollars;

-EUR/GBP, in relation to transactions carried out in UK Sterling;

-EUR/CNY, in relation to transactions carried out in Chinese renminbi mainly on the Asian market.

The Group does not generally adopt specific policies to hedge exchange rate fluctuations, with the exception of contracts occasionally entered into due to the contingent requirements of its commercial activities. It should be noted that there is periodic massive offsetting between the values of purchase components in foreign currencies, mainly US dollars, and the values of sales in the same currency, which significantly mitigates the Group's currency risk. Many Group companies are however exposed to a contained level of exchange rate risk stemming from operations as, in the individual countries, a portion of cash flows, sales and also costs are denominated in the same accounting currency of the country (natural hedging).

3.1.2.Analysis of sensitivity of exchange rate risk

For the purposes of an exchange rate sensitivity analysis, balance sheet items as at December 31, 2023 (financial assets and liabilities) denominated in a currency other than the functional currency of each Group company were identified. In assessing the potential effects arising from changes in exchange rates, inter-company payables and receivables in currencies other than the account currency were also taken into consideration.

Pag. 81 di 246

Two scenarios were considered for the purposes of the analysis which respectively reflect a 10% appreciation and depreciation of the nominal exchange rate between the currency in which the balance sheet item is denominated and the accounting currency.

The table below highlights the results of the analysis:

+10%

-10%

(in thousands of Euro)

Consolidated financial statements

Exposition to currency risk (aggregated)

Gains/(Losses)

Financial assets

Cash and cash equivalents

157,662

32,163

(3,216)

3,216

Trade receivables (net of credit notes)

26,206

1,032

(103)

103

Tax effect

797

(797)

Total financial assets

(2,523)

2,523

Financial liabilities

Trade payables

(116,006)

(4,382)

446

(446)

Tax effect

(107)

107

Total financial liabilities

339

(339)

Total

(2,184)

2,184

Note: the plus sign indicates a higher profit and an increase in shareholders’ equity; the minus sign indicates a lower profit and a decrease in shareholders’ equity.

For comparability with the previous year, a similar analysis at December 31, 2022 is presented below:

+10%

-10%

(in thousands of Euro)

Consolidated financial statements

Exposition to currency risk (aggregated)

Gains/(Losses)

Financial assets

Cash and cash equivalents

110,682

23,853

(2,385)

2,385

Trade receivables (net of credit notes)

28,553

2,763

(276)

276

Tax effect

639

(639)

Total financial assets

(2,022)

2,022

Financial liabilities

Trade payables

(126,840)

(5,047)

505

(505)

Tax effect

(121)

121

Total financial liabilities

384

(384)

Total

(1,639)

1,639

It should also be noted that, for the purposes of consolidated reporting, the Company recognises currency differences generated by the year-end translation of the financial statements of foreign

Pag. 82 di 246

subsidiaries prepared in a currency other than the Euro among comprehensive income and, therefore, directly within the shareholders’ equity “translation reserve”.

Therefore, there is the risk that fluctuations in exchange rates in countries where the Group’s subsidiaries operate (esp. the USA and China) could have an impact on consolidated shareholders’ equity. In 2023 specifically, this translation had a negative effect of Euro 11,511 thousand as shown in the statement of changes in shareholders’ equity and in the consolidated comprehensive income statement.

3.1.3Raw material price risk

The Group’s production costs are influenced by the price trends of the main raw materials used. The price of these materials varies depending on a wide range of factors, to a large extent uncontrollable by the Group and difficult to predict.

Specifically, the Group implements a strategy to offset the price volatility risk of the main production factors used through contractual hedging which limits changes to the prices of raw materials, energy sources and partly, selling prices.

3.1.4Interest rate risk

The Group uses external debt funding and places available liquidity in market instruments. Changes in the interest rates impact on the cost and return of the various forms of loans and uses, with an effect therefore on the consolidated financial charges. The Group policy seeks to limit interest rate fluctuation risk through undertaking fixed or variable rate medium/long-term loans linked to hedging derivatives; hedging is carried out through the trading of derivative instruments (e.g. IRS - Interest Rate Swaps and IRC – Interest Rate Collar), utilised only for hedging purposes and not for speculative purposes. These contracts, although subscribed for hedging purposes relating to the financial exposure of the Group, were not treated as hedges for accounting purposes, given the technical complexity of the accounting demonstration of the hedging relationship and the relative effectiveness, and therefore with end-of-period Mark to Market (MTM) adjustment effects recognised directly in the consolidated income statement.

The following tables summarise the main information concerning hedging derivatives on interest rates as at December 31, 2023 (held exclusively by the Parent Company):

Pag. 83 di 246

(Euro thousands)

Contract opening date

Contract maturity date

Notional value at signing date in foreign currency

Notional currency

Fair value at

December 31, 2023

IRS Banca Popolare Milano

20/06/2018

30/06/2025

25,000

Euro

171

IRS Banca Popolare Milano

06/06/2019

30/06/2025

15,000

Euro

126

IRS (BNL)

05/07/2023

05/07/2028

10,000

Euro

(175)

IRS Crédit Agricole

09/08/2019

28/12/2025

10,000

Euro

148

IRS Crédit Agricole

29/05/2017

28/06/2024

10,000

Euro

IRS Intesa San Paolo

19/06/2018

31/01/2024

15,000

Euro

IRS Intesa San Paolo

25/09/2019

31/12/2024

20,000

Euro

101

IRS Intesa San Paolo

28/12/2021

31/12/2027

30,000

Euro

1,387

IRS Monte dei Paschi Siena

30/09/2023

30/09/2026

20,000

Euro

(445)

Total

155,000

1,354

For comparability with the previous year, a similar analysis at December 31, 2022 is presented below:

(Euro thousands)

Contract opening date

Contract maturity date

Notional value at signing date in foreign currency

Notional currency

Fair value at

December 31, 2022

IRS Intesa San Paolo

28/12/2021

31/12/2027

30,000

Euro

2,514

IRS Credit Agricole

29/05/2017

28/06/2024

10,000

Euro

IRS Intesa San Paolo

19/06/2018

31/01/2024

15,000

Euro

IRS Banca Popolare Milano

20/06/2018

30/06/2025

25,000

Euro

434

IRS Banca Popolare Milano

06/06/2019

30/06/2025

15,000

Euro

322

IRS Credit Agricole

09/08/2019

28/12/2025

10,000

Euro

323

IRS Intesa San Paolo

25/09/2019

31/12/2024

20,000

Euro

325

Total

125,000

4,063

3.1.5Sensitivity analysis related to interest rate risk

With reference to interest rate risk, a sensitivity analysis was carried out to determine the effect on the consolidated income statement and consolidated shareholders’ equity resulting from a hypothetical positive and negative change of 100 bps in interest rates compared to those actually recorded in each period.

The analysis was carried out mainly regarding short and medium/long-term financial liabilities.

With reference to cash and cash equivalents, reference was made to the average funds held and the average rate of return for the period. For short and medium/long-term financial liabilities, the impact was calculated on an actual basis. Financial payables settled at a fixed rate and those hedged through derivative instruments were not included in this analysis.

The table below highlights the results of the analysis:

(Euro thousands)

Impact on Net Profit

Effect on Net Equity

Change

+ 100 bps

- 100 bps

+ 100 bps

- 100 bps

FY 2023

(1,056)

1,056

(1,056)

1,056

Pag. 84 di 246

Note: the plus sign indicates a higher profit and an increase in shareholders’ equity; the minus sign indicates a lower profit and a decrease in shareholders’ equity.

For comparability with the previous year, a similar analysis at December 31, 2022 is presented below:

(Euro thousands)

Impact on Net Profit

Effect on Net Equity

Change

+ 100 bps

- 100 bps

+ 100 bps

- 100 bps

FY 2022

(668)

668

(668)

668

3.2 Credit risk

The Group’s exposure to credit risk relates to the possibility of insolvency (default) and/or in the deterioration of the credit rating of a counterparty and is managed through adequate valuation instruments of all counterparties by a dedicated department, utilising the appropriate instruments to carry out constant monitoring, on a daily basis, of the behaviour and credit rating of clients. The Group hedges its credit risk through insurance policies on the client exposure, undertaken with primary debt insurance companies. External companies providing corporate information are utilised both to initially evaluate the reliability and for on-going monitoring of the economic and financial situation of clients.

The top 10 clients on the total Group trade receivables at December 31, 2023 was 34% (48% at December 31, 2022).

The following table provides a breakdown of trade receivables at December 31, 2023, grouped by due date and net of the doubtful debt provision:

(in thousands of Euro)

December 31, 2023

Not yet due

Overdue within 30 days

Overdue between 31 and 90 days

Overdue between 91 and 120 days

Overdue beyond 120 days

Guaranteed trade receivables (a)

18,795

12,445

5,976

108

230

Non-guaranteed trade receivables (b)

7,769

7,068

572

(20)

(1)

150

Non-guaranteed trade receivables impaired (c)

237

200

Trade receivables before doubtful debt provision [(a)+(b)+(c)]

26,801

19,543

6,555

580

Doubtful debt provision

(595)

(537)

(7)

(3)

(48)

Trade receivables

26,206

19,543

6,018

532

3.3 Liquidity risk

Pag. 85 di 246

Liquidity risk relates to the risk of the Group being unable to meet its payment obligations due to the inability to source new funds or liquidate assets on the market. This results in a negative impact on economic performance if it is obliged to incur additional costs to meet its commitments or insolvency.

The liquidity risk to which the Group is exposed relates to the inability to source sufficient funding for operations, in addition to industrial and commercial operations. The principal factors which determine the liquidity situation of the Group are, on the one hand, the resources generated and absorbed by the operating and investment activities and on the other the maturity dates and the renewal of the payable or liquidity of the financial commitments and also market conditions.

The Group can avail of on-demand liquidity of Euro 158 million at December 31, 2023, and has a significant availability of credit lines granted by a number of leading Italian and international banks. The directors consider that the funds and credit lines currently available, in addition to those that will be generated from operating and financial activities, will permit the satisfaction of its requirements deriving from investment activities, working capital management and the repayment of debt in accordance with their maturities.

The total Group bank credit lines at year-end amount to Euro 69.8 million, completely unutilised.

The table below shows an analysis of amounts due, based on contractual repayment obligations relating to the convertible bond, leasing contracts, trade payables and other liabilities as at December 31, 2023:

(Euro thousands)

December 31, 2023

Within 1 year

Between 1 and 5 years

Beyond 5 years

Bond loan

70,649

13,258

51,677

5,714

Other current and non-current financial liabilities

341,253

89,903

241,666

9,684

Trade payables

116,006

Other current and non-current liabilities

26,698

20,846

5,852

Total

554,606

240,013

299,195

15,398

All the amounts in the table above refer to the nominal amounts not discounted, stated with regards to the residual contractual maturities, both in terms of the capital and interest portions. The Group expects to meet these commitments by liquidating financial assets and through cash flows that will be generated by operations. In this risk analysis, we add the more detailed conclusions of the Directors’ Report on the impact of the spread of COVID-19 (coronavirus), the conflict between Russia and Ukraine and the most recent conflict between Israel and Palestine. In particular, it can be stated that - overall and based on the declaration of the World Health Organisation on the conclusion of the global health emergency - no impact and/or effect is seen (i) on the value of the

Pag. 86 di 246

assets shown in the financial statements (ii) on the recoverability of trade receivables (iii) on the net realisable value of inventories. As mentioned previously, the impact on the business thus far has remained, on the whole, limited. Therefore, no specific risks have been identified in terms of the Group's ability to meet its future commitments (including compliance with the "covenants" set out in certain loan agreements at December 31, 2024) and/or which may impact the Group's ability to continue as a going concern.

With regards to the conflict between Russia and Ukraine and between Israel and Hamas, it is confirmed that this situation does not have direct impacts on the company, as currently not having (i) any investment in any the countries involved, nor (ii) financial instruments or liquidity in the currencies of the countries involved.

3.4Climate change risks

The Aquafil Group passionately pursues its environmental, social and governance policy and takes an active role in the community in which it operates.

4.MANAGEMENT OF CAPITAL

The Group’s capital management is aimed at ensuring a solid credit rating and adequate levels of capital indicators to support investment plans, in accordance with contractual obligations entered into with lenders.

Pag. 87 di 246

The Group acquires the necessary capital to finance the needs for business development and operations; financing sources are divided into a balanced mix of risk capital and debt capital to ensure a balanced financial structure and the minimisation of the total cost of capital, for the consequent benefit of all stakeholders.

The remuneration of risk capital is monitored on the basis of the market trend and business performance, once all other obligations have been met, including the debt service; therefore, in order to ensure an adequate remuneration of capital, the safeguarding of business continuity and business development, the Group constantly monitors the development of the debt level in relation to shareholders’ equity, business performance and forecasts of expected cash flows in the short and medium/long-term.

5.CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES

The tables below illustrate the breakdown of financial assets and liabilities of the Group required by IFRS 7, as per the categories identified by IFRS 9, at December 31, 2023:

(Euro thousands)

Financial assets and liabilities measured at fair value through P&L

Loans and receivables

Financial liabilities at amortised cost

Total

Non-current financial assets

1,188

370

1,558

Current financial assets

1,974

3,729

5,703

Trade Receivables

26,206

Current tax receivables

1,619

Other current & non-current assets

14,644

Cash and cash equivalents

157,662

Total financial assets

160,823

46,569

207,392

Non-current financial liabilities

308,741

Current financial liabilities

103,161

Trade payables

116,006

Other current and non-current liabilities

26,698

Total financial payables

411,901

It should be noted that the carrying amounts above are in line with their respective fair values.

5.1Measurement of the fair value

In relation to financial instruments measured at fair value, the table below reports information on the method chosen to measure the fair value. The methods applied are broken down into the following levels, based on the information available, as follows:

Pag. 88 di 246

•Level 1: fair value determined with reference to listed prices (not adjusted), on active markets for identical financial instruments;

•Level 2: fair value determined with valuation techniques with reference to observable variables on active markets;

•Level 3: fair value determined with valuation techniques with reference to non-observable variables on markets;

The fair value calculation is determined in accordance with the methods classified in Level 2 and the general criterion utilised for this calculation is the present value of the expected future cash flows of the instrument subject to measurement - a method commonly applied in financial practice. There were no transfers between hierarchical levels of the fair value in the periods considered.

The table below summarises the assets and liabilities measured at fair value at December 31, 2023, on the basis of the level which reflects the inputs utilised in the determination of the fair value.

(Euro thousands)

December 31, 2023

December 31, 2022

Derivative financial instruments – Liabilities

(619)

Derivative financial instruments - Assets

1,974

4,063

Total

1,354

4,063

6.DISCLOSURE BY OPERATING SEGMENT

IFRS 8 defines an “Operating segment” as a component (i) involving business activities generating revenues and costs, (ii) whose operating results are reviewed periodically at the highest decision-making level and (iii) for which separate financial data is available.

The operating segments of the company are identified on the basis of the information analysed by the Board of Directors, which constitutes the highest decision-making level for strategic decisions, the allocation of resources and the analysis of results.

More specifically, and given that Group operations are entirely interconnected, financial performance figures, which are reviewed periodically by the Board of Directors, refer to the Group as a whole.

In fact, the Group structure identifies a strategic and singular vision of the business and this representation is consistent with the manner in which management takes its decisions, allocates resources and defines the communication strategy. Dividing the business into separate divisions is

Pag. 89 di 246

therefore currently viewed as detrimental to its economic interests. Therefore, the information required by IFRS 8 corresponds to that presented in the consolidated income statement.

7NOTES TO THE CONSOLIDATED BALANCE SHEET

7.1.Intangible assets

The breakdown in the account and changes in the period were as follows:

(Euro thousands)

Development costs

Patents & property rights

Trademarks, concessions and licenses

Other intangible assets

Intangible assets in progress

Non Contractual Customer relationships

Total

December 31, 2021

4,660

359

4,789

10,295

3,397

23,551

Historical cost

6,370

5,213

4,767

19,485

10,295

6,272

52,401

Acc. amort.

(1,710)

(5,162)

(4,408)

(14,696)

(2,875)

(28,850)

Reclassifications

159

9,805

(9,798)

166

Increases

1,675

1,437

991

4,163

Decreases

(132)

Amortisation

(1,482)

(108)

(3,617)

(797)

(6,004)

Exchange diff. - Historic Cost

(1)

(120)

(139)

(236)

Exchange diff. - Acc. Amort.

(6)

December 31, 2022

4,852

350

12,432

1,355

2,555

21,596

Historic cost

8,044

5,212

5,152

30,692

1,355

6,132

56,587

Acc. amort.

(3,192)

(5,160)

(4,802)

(18,260)

(3,577)

(34,991)

Reclassifications

280

(380)

(84)

Increases

2,519

232

1,044

817

4,620

Decreases

(13)

Amortisation

(2,026)

(100)

(3,722)

(893)

(6,741)

Write-downs

(137)

Exchange diff. - Historic Cost

515

(9)

(402)

104

Exchange diff. - Acc. Amort.

(52)

(464)

246

(265)

December 31, 2023

5,208

326

9,205

2,019

2,322

19,080

Historic cost

10,340

5,212

5,687

30,783

2,019

6,547

60,588

Acc. amort.

(5,132)

(5,212)

(5,361)

(21,578)

(4,224)

(41,508)

Pag. 90 di 246

"Other intangible assets" mainly includes the costs of development projects incurred by the Parent Company for the digitization of processes. During the previous year the bio-caprolactam production process was started on a pilot basis, resulting in a Euro 9.1 million transfer from intangible assets in progress to other intangible assets and consequently amortisation over a 5-year period began. This project ("Effective”) was coordinated by Aquafil and funded by the Bio-Based Industries Joint Undertaking (BBI JU) as part of the European Horizon 2020 research programme and focused on the production of bio-caprolactam.

The increases in the year overall amounting to Euro 4.6 million, mainly related to:

•for Euro 2.5 million new product development costs (IAS38);

•for Euro 1.0 million costs incurred for the implementation and upgrading of the Aquafil Group's digitization processes;

•for Euro 0.8 million the acquisition by Aquafil Carpet Collection of certain assets from Keith Bauer and James Williams in 2023, the purpose of which was to increase the amount of material recycled in California directly by the U.S. subsidiary. A portion of this acquisition involved physical assets, while another concerned the seller’s customer list, which was recognised among non-contractual customer relationships.

Amortisation in the year, in the amount of Euro 6.7 million, includes Euro 1,821 thousand for the beginning of amortisation on the effective project, which took place last year as described above. At December 31, 2023, the Group had no significant contracts for the purchase of intangibles.

7.2.Goodwill

Goodwill was Euro 15,103 thousand at December 31, 2023. This figure includes the goodwill recognised on the Aquafil O’Mara business combination in 2019 and the goodwill on the acquisition in 2020 of Aquafil Carpet Recycling, now Aquafil Carpet Collection LLC.

It should also be noted that the goodwill related to Aquafil O’Mara and Aquafil Carpet Collection LLC, having been recognised by the direct subsidiary Aquafil USA, was negatively affected by the translation from Dollars to Euro as part of the consolidation process.

Pag. 91 di 246

This value represents the excess between the consideration transferred, measured at fair value at the acquisition date, as subsequently updated, compared to the net value of the identifiable assets and liabilities of the purchase measured at fair value.

After initial recognition the goodwill is not amortised but subject to an annual impairment test as described in the previous paragraph “Impairment test - verification of recoverability”.

In accordance with the provisions of IAS 36 the Group therefore undertook a specific impairment test in order to verify the recoverability of the goodwill recognised.

The impairment test was carried out determining the value in use with the discounted cash flow method (DCF) net of income taxes in line with the post-tax discount rate utilised.

The cash flows used to apply the DCF are those included in the Group's 2024 - 2026 business plan approved by the Parent Company's board of directors on February 15, 2024 and based on the following assumptions:

•An overall organic volume increase of between 4% and 7% compared to 2023 is expected for 2024. Specifically, the textile flooring product line is expected to grow by 3-6%, the clothing fibres product line by 13-16%, and the Polymers product line is expected to grow by 6-9%, due to the consolidation of the Engineering Plastics business. Raw materials were considered at a price level in line with the final months of FY2023. Expected EBITDA for fiscal year 2024 is in the range of Euro 76 to 82 million. In terms of Net Financial Position, a range of Euro 225 - 235 is projected for 2024.

•An overall organic increase of between 6-9% compared to 2024 is projected for 2025. Specifically, the textile flooring product line is expected to grow by 4-7%, the clothing fibres product line by 8-11%, and the Polymers product line is expected to grow by 14-17%. Raw materials were considered at a price level about 5% higher than in FY2024. Expected EBITDA for fiscal year 2025 is in the range of Euro 84 to 92 million. In terms of Net Financial Position, a range of Euro 190 - 200 is projected for 2025.

•The growth rate (g) applied was 2.7% (in line with the previous year), which is equal to the expected global average growth beginning in 2024.

Pag. 92 di 246

The discounting of the cash flows was carried out on the basis of a weighted average cost of capital which reflects the current market assessment of the cost of money. The identified value is 9.3%, compared with 8.2% applied in 2022.

A sensitivity analysis was also carried out in order to determine the change to the value assigned to the base assumptions which, after having considered any amendments as a result of this change on the other variables utilised, renders the recoverable value equal to its carrying amount.

This analysis indicated that only significant deviations in the achievement of the Group's business objectives, interest rates and perpetual growth rates would reduce the recoverable value to a level close to the book value, so it is not necessary, as required by IAS 36, to report in this note the effects of a sensitivity simulation.

From the impairment test carried out therefore no adjustments are required to the value of the goodwill.

7.3.Property, plant & equipment

The breakdown in the account and changes in the period were as follows:

(thousands of Euro)

Land & buildings

Plant & equipment

Industrial and commercial equipment

Other assets

Assets in progress

Investment property

Total before Right-of-Use

Right-of-Use

Total

December 31, 2021

54,769

119,935

381

1,775

45,020

344

222,224

18,265

240,489

Historical cost

126,870

499,888

10,503

7,257

45,020

793

690,331

35,855

726,186

Acc. deprec.

(72,102)

(379,953)

(10,122)

(5,482)

(449)

(468,108)

(17,591)

(485,699)

Change in consolidation scope

Reclassifications

1,873

39,134

(41,280)

(188)

Increase

371

10,119

310

489

23,574

34,863

10,545

45,408

Decreases

(8)

(23)

(5)

(163)

(199)

(885)

(1,084)

Depreciation

(4,374)

(28,697)

(137)

(589)

(12)

(33,809)

(8,329)

(42,138)

Exchange diff. - Historic Cost

2,203

4,748

(25)

141

1,244

8,311

747

9,058

Exchange diff. - Acc. Deprec.

(3,740)

(2)

(153)

(3,830)

(283)

(4,113)

December 31, 2022

54,898

141,485

574

1,696

28,423

333

227,407

20,060

247,467

Historic cost

128,288

543,135

10,798

7,690

28,423

793

719,127

36,122

755,249

Acc. deprec.

(73,390)

(401,650)

(10,224)

(5,994)

(460)

(491,718)

(16,062)

(507,780)

Reclassifications

(513)

16,963

(16,525)

Increases

1,137

11,101

290

802

15,828

29,157

23,855

53,012

Decreases

(304)

(7)

(32)

(88)

(431)

(1,698)

(2,129)

Depreciation

(3,411)

(28,989)

(203)

(617)

(12)

(33,233)

(9,525)

(42,757)

Pag. 93 di 246

Exchange diff. - Historic Cost

(819)

(1,565)

(5)

(220)

(709)

(3,318)

(701)

(4,019)

Exchange diff. - Acc. Deprec.

258

(902)

149

(491)

426

(65)

December 31, 2023

51,551

137,789

750

1,829

26,928

321

219,168

32,435

251,604

Historic cost

129,596

554,187

11,121

7,379

26,928

793

730,005

51,810

781,814

Acc. deprec.

(78,045)

(416,398)

(10,371)

(5,549)

(472)

(510,836)

(19,375)

(530,211)

The increases in the year, excluding the effect of changes in “Right-of-use”, amounted to Euro 29.2 million and mainly refer to:

-for Euro 12.2 million, the increase in industrial and energy efficiency at Group plant;

-for Euro 9.0 million to activities to improve industrial and energy efficiency in the production of ECONYL® caprolactam and its raw materials, in addition to the development of circularity-focused technologies;

-for Euro 3.5 million to expand existing production capacity;

-for Euro 3.2 million, the technological improvement and upgrading of the existing plants and equipment.

All assets in progress concern industrial investments that are either incomplete or not fully operational, but for which full operability is certain and currently envisaged in the Group’s strategic plans.

The recoverability of both intangible assets and property, plant and equipment has been assessed by way of impairment testing as described in the paragraph “Goodwill” above, and no issues concerning their recoverability have been identified.

The table below, in accordance with IFRS 16, presents the right-of-use of the non-current asset subject to the leasing contract. In particular this refers to buildings, equipment and transport and motor vehicles as illustrated in the table below.

(Euro thousands)

Right-of-use buildings

Right- of-use equipment and transport vehicles

Right-of-use motor vehicles

Right-of-use other

Right-of-use Plant and Machinery

Total

December 31, 2021

14,237

2,887

1,084

18,265

Historical cost

28,417

5,720

1,616

102

35,855

Acc. deprec.

(14,180)

(2,833)

(532)

(45)

(17,591)

Increase

7,848

2,356

341

10,545

Pag. 94 di 246

Decreases

(329)

(483)

(72)

(885)

Depreciation

(6,452)

(1,434)

(420)

(22)

(8,329)

Exchange diff. - Historic Cost

618

747

Exchange diff. - Acc. Deprec.

(230)

(46)

(4)

(3)

(283)

December 31, 2022

15,691

3,366

964

20,060

Historic cost

27,912

6,385

1,717

109

36,122

Acc. deprec.

(12,221)

(3,018)

(753)

(70)

(16,062)

Reclassifications

Increases

5,206

2,022

578

216

15,833

23,855

Decreases

(1,467)

(202)

(29)

(1,698)

Depreciation

(7,209)

(1,820)

(463)

(32)

(9,525)

Exchange diff. - Historic Cost

(587)

(98)

(7)

(8)

(701)

Exchange diff. - Acc. Deprec.

369

426

Balance at December 31st 2023

12,003

3,314

1,069

217

15,833

32,435

Historic cost

26,208

7,536

1,917

317

15,833

51,810

Acc. deprec.

(14,206)

(4,222)

(848)

(99)

(19,375)

Increases for the year, in the amount of Euro 23.9 million, are mainly attributable to: the contract signed during the year by AquafilSLO and EON concerning the provision of electricity and thermal energy by a co-generation plant in Lubiana for Euro 15.8 million; the renewal of lease agreements for properties at the plants of the U.S. companies for Euro 3.7 million; and the renewal of the lease agreements related to the equipment of the parent company, Aquafil USA Inc., and Tessilquattro S.p.A. for Euro 1.8 million.

At December 31, 2023, the Group had no significant contracts for the purchase of material goods.

7.4.Current and non-current financial assets and investments valued at equity

The breakdown of the account is shown below (including current and non-current):

(Euro thousands)

December 31, 2023

December 31, 2022

Receivables from parent companies

234

Investments valued at equity

1,023

1,018

Escrow bank deposits

3,770

5,943

Investments in other companies

164

Current and non-current financial assets

251

457

Receivables from related parties

Derivative financial instruments - Current

1,974

4,062

Total

7,260

11,813

of which current

5,703

9,964

of which non-current

1,557

1,849

Pag. 95 di 246

“Receivables from parent companies” were collected in their entirety following payment to Aquafil S.p.A. by Aquafin Holding S.p.A. to return the security deposit paid in relation to the long-term lease agreement on the logistics property at Viale dell’Industria 5, Verona (Italy) upon consensual termination of said agreement.

“Investments valued at equity”, in the amount of Euro 1,023 thousand, concern the following investments in associates or joint ventures:

(i)Nofir AS, a Norwegian company based in Mørkved, Bodǿ, Norway, a European leader in the collection and treatment of end-of-life netting for fishing and aquaculture, of which a 31.66% stake was acquired on October 10, 2021, for Euro 1,018 thousand; the company has roughly Euro 2.5 million in assets, mainly in the form of cash and cash equivalents, trade receivables, and inventories and shareholders’ equity of Euro 1.8 million;

(ii)investment in Acca S.p.A. for Euro 0.5 thousand. The company is a joint venture between Aquafil Chile S.p.A. and its equal partner Atando Cabos Chile S.p.A., is based in Santiago (Chile), and has share capital of CLP 1 million and negative shareholders’ equity of Euro 20 thousand. For more information, please see paragraph 5 of the Directors’ Report.

(iii)investment in Poly-Service SAS for Euro 4.5 thousand. Based in Lyon (France), the company was incorporated on August 7, 2023 and has share capital of Euro 10 thousand, in which Aquafil S.p.A. holds a 45% stake and Politecnici S.r.l. holds a 55% stake. For more information, please see paragraph 5 of the Directors’ Report. The company, which is not yet operational, has a shareholders' equity of Euro 10 thousand.

"Receivables from other related parties" refer to guarantee deposits paid by Tessilquattro SpA and Aquafil SpA to Aquaspace SpA over a multi-year leasing contract for the industrial and logistical use property located in Via del Garda 40 - Rovereto.

“Investments in other companies” relates to minor holdings.

The fair value of derivative financial instruments (IRS-IRC) reports a decrease of Euro 2.1 million substantially due to the change in the market interest rate curve. As previously illustrated, these derivatives have not been treated, for accounting purposes and consistently with the past, as hedging instruments (and therefore the relative fair value is recognised in the income statement), as it is very complex to prepare the mandatory hedging relationship.

Pag. 96 di 246

The “Escrow bank deposits”, amounting to Euro 3.8 million, are held by the Group companies Aquafil Jiaxing Co Ltd and Aquafil USA Inc. These deposits earn interest and are under short-term escrow. The decrease from December 31, 2022, is essentially due to a reduction in the deposit balance by the subsidiary Aquafil Jiaxing Co. Ltd.

7.5.Other non-current assets

“Other non-current assets” at December 31, 2023 amount to zero, as in 2023 the final transfer was received to settle the receivable from the EU for the “Effective” research project co-ordinated by Aquafil and funded by Bio-Based Industries Joint Undertaking (BBI JU) as part of the European Horizon 2020 research programme, with the entire chain (from raw material manufacturers to brands) involved in validating the use of bio Nylon 6 and other bio-polymer consumer market products; reference should be made also to the Directors' Report for more details on the project.

In particular, with the signing of the agreement between the partners and other lenders, an overall amount of Euro 1.7 million was stipulated, with deferred income recognised under Other liabilities (Note 7.16) which was equal to Euro 673 thousand at December 31, 2023. The receivable was reduced for the amounts effectively paid by the European Union, substantially recognised on the basis of the convention rules which provides for payment based on the state of advancement. Therefore, at December 31, 2023, the company did not have any residual receivable from the EU.

7.6Deferred tax assets and liabilities

The breakdown of the items "Deferred tax assets” and “Deferred tax liabilities" is shown below:

(Euro thousands)

December 31, 2023

December 31, 2022

Deferred tax assets

18,545

11,519

Deferred tax liabilities

(13,324)

(9,237)

Total

5,221

2,281

The relative movement is comprised of:

(Euro thousands)

January 1, 2023

Provisions / (releases) to net equity

Provisions / (releases) to P&L

December 31, 2023

Deferred tax assets

Pag. 97 di 246

Provision for risks and charges

205

(72)

133

Doubtful debt provision

292

(7)

(258)

Measurement of employee benefits as per IAS 19

483

470

1,013

Intangible and tangible fixed assets

4,276

(3,309)

967

Tax losses

2,433

(40)

7,024

9,417

Inventories

2,900

(6)

(2,150)

744

Other

931

(61)

5,375

6,245

Total deferred tax assets

11,519

(54)

7,080

18,545

Deferred tax liabilities

Intangible and tangible fixed assets

8,652

(203)

3,632

12,081

Other

585

(16)

674

1,243

Total deferred tax liabilities

9,237

(219)

4,306

13,324

Total net deferred tax assets

2,280

165

2,774

5,221

During the year, deferred tax assets were allocated on fiscal losses, after restoring deferred tax assets in relation to the mutual agreement procedure initiated on October 4, 2023, as was done for fiscal year 2017 (and as described in the section “Contingent Liabilities”), as well as on non-deducted interest expense related to the parent company in accordance with Italian income tax law (TUIR). This was partially offset by amounts resulting from previously allocated taxes on intangible and tangible fixed assets and on inventories.

The “Deferred tax liabilities” mainly refers to the tax effect calculated on the temporary differences between book and tax depreciation of some companies of the Group. The net DTA balance is considered fully recoverable based on the projected tax bases of Group companies.

7.7Inventories

The changes in the account were as follows:

(Euro thousands)

December 31, 2023

December 31, 2022

Inventories of raw materials, supplies and consumables

68,727

98,093

Finished products and goods

120,741

162,653

Advances

Total

189,493

260,808

Inventories are recorded net of the obsolescence provision amounting to Euro 0.4 million and relates to slow-moving stock.

Pag. 98 di 246

The significant decrease is mainly as a combined effect of the reduction in stock and the decrease in the average price.

7.8.Trade receivables

The changes in the account were as follows:

(Euro thousands)

December 31, 2023

December 31, 2022

Trade receivables

26,450

30,235

Parent, associates and other related parties

351

376

Doubtful debt provision

(595)

(2,057)

Total

26,206

28,553

The following table shows the movement of the doubtful debt provision:

(in Euro thousands)

2023

2022

Balance at January 1

(2,057)

(1,765)

Provisions

(47)

Utilisations

567

156

Release

895

Balance at December 31

(595)

(2,057)

Reference should be made to the previous paragraph 3.2 for details on the credit risk management policy.

The utilisation of the doubtful debt provision relates to the closure of certain receivables arising in previous years deemed uncollectible. Releases are the result of an updated analysis of the collectibility of trade receivables outstanding at the balance sheet date.

7.9.Current tax receivables and payables

Current tax receivables of Euro 1.6 million mainly refer to payments on account paid by the company Aquafil USA Inc. for Euro 1 million, Aquafil Carpet Recycling #1 Inc. for Euro 0.2 million and Aquafil SLO doo for Euro 0.2 million.

Current tax liabilities, which amount to Euro 1.2 million, mainly refer to amounts owed by Aquafil Jiaxing Co. Ltd. for Euro 0.9 million and Aquafil Asia Pacific Co. Ltd. for Euro 0.1 million.

7.10.Other current assets

The changes in the account were as follows:

(Euro thousands)

December 31, 2023

December 31, 2022

Pag. 99 di 246

Tax receivables

3,431

9,408

Supplier advances

667

885

Pension and social security institutions

155

406

Employee receivables

261

275

Tax receivables from parent

5,854

247

Other receivables

683

974

Prepayments and accrued income

3,594

3,665

Total

14,644

15,861

This amounted to Euro 14.6 million and presented a decrease of Euro 1.3 million compared to the previous year ended December 31, 2022 (Euro 15.9 million). The account comprises:

•taxes and social security receivable for Euro 3.6 million, a decrease from Euro 9.8 million at December 31, 2022, due mainly to uses by way of offsetting energy-consumption credits, credits for research and development, and Industry 4.0 investment credits, as well as to the change in the payable position at December 31, 2023, related to VAT paid as compared to the credit balance at the end of the previous year;

•taxes receivable from parent companies in the amount of Euro 5.9 million, which concern gains from tax consolidation generated on the transfer of the fiscal gain following fiscal losses accumulated in the previous year by Tessilquattro S.p.A. and Aquafil S.p.A. This latter, as per the tax consolidation agreement, remains responsible for netting in the calculation of tax receivables and payables relating to IRES (company income tax) as per Article 228 et seq. of the Income Tax Law with Tessilquattro SpA and Bluloop Srl;

•prepayments and accrued income in the amount of Euro 3.6 million, Euro 2.1 million of which related to Aquafil S.p.A., which mainly include insurance premiums for Euro 165 thousand, information and communication technology consultancy fees invoiced in advance of completion of service for Euro 467 thousand, prepaid fees for electricity system charges during the year for Euro 726 thousand, and personnel training grants for Euro 393 thousand. This aggregate also includes an allocation by Aquafil USA for a duty-drawback programme that allows for the recovery of duties incurred in relation to shipments made to Europe.

•other receivables in the amount of Euro 0.7 million, mainly related to a security deposit paid by Aquafil Jiaxing Co. Ltd. for a lease agreement.

7.11Cash and cash equivalents

The account is comprised of:

(Euro thousands)

December 31, 2023

December 31, 2022

Pag. 100 di 246

Cash and equivalents

Bank and postal deposits

157,644

110,662

Total

157,662

110,682

Liquidity at year-end on the current accounts of the various operating companies of the Group, increased from Euro 110.7 million to Euro 157.7 million.

The item relates to the current account balances of the different Group companies.

The breakdown of cash and cash equivalents in thousands of Euro of foreign currencies is illustrated in the table below:

(in thousands of Euro)

December 31, 2023

AUD

Australian Dollar

243

INR

Indian Rupee

CLP

Chilean Peso

CNY

Chinese Yuan

14,207

EUR

Euro

86,695

GBP

UK Sterling

275

JPY

Japanese Yen

2,202

THB

Thai Baht

799

TRL

Turkish Lira

USD

US Dollar

53,148

Total

157,662

It should be noted that the increase in cash and cash equivalents at December 31, 2023, as compared to the previous year, is mainly attributable to the new financing received during the year by Aquafil S.p.A. as detailed below, as well as to the greater cash generated on operating activities by the subsidiaries Aquafil USA Inc. and Aquafil Jiaxing Co. Ltd.

In 2023 we report:

-new medium-term, unsecured loans underwritten by the Aquafil S.p.A. for a total of Euro 100 million, of which Euro 40 million backed by SACE SupportItalia guarantee. Borrowings are detailed in paragraph 7.14;

-repayments of loans and bond instalments totalling Euro 72 million by the Parent Company Aquafil SpA.

There were no restrictions on liquidity..

7.12Shareholders’ Equity

Share capital

Pag. 101 di 246

At December 31, 2023, the Company authorised share capital amounted to Euro 50,522 thousand, whose subscribed and paid-up capital amounts to Euro 49,722 thousand, while the unsubscribed and unpaid portion relates to: (i) Euro 800 thousand, the capital increase in service of Aquafil Sponsor Warrants. The subscribed and paid-up share capital is divided into 51,218,794 shares without nominal value divided into:

•42,902,774 ordinary shares, identified by the ISIN Code IT0005241192;

•8,316,020 special Class B shares, identified by the ISIN Code IT0005285330 which, in compliance with any legal limits, assign 3 exercisable voting rights pursuant to Art. 127-sexies of Legislative Decree No. 58/1998 in shareholders’ meetings of the company and which may be converted into ordinary shares under specific conditions and circumstances as regulated by the By-Laws, at the rate of one ordinary share for each Class B share.

In 2022, following the fulfilment of that indicated at Article 5 of the By-Laws of Aquafil SpA, 100% of the Class C shares (i.e. 80,000 class C shares) were automatically converted into ordinary shares, according to the conversion ratio of 1 ordinary share for each Class C share, without the expression of interest from their respective holders and without any change in the total amount of the company share capital.

It is recalled that the 80,000 special Class C shares, identified by the ISIN Code IT0005241747, were without voting rights in the ordinary and extraordinary shareholders’ meetings of the company and excluded from the right to receive profits which the company resolves to distribute as an ordinary, non-transferable dividend until April 5, 2022 and automatically converted into ordinary shares in the conversion ratio of 4.5 ordinary shares for each Class C share according to specific conditions and circumstances laid down by the By-Laws.

As a result of this share conversion, the Group’s share capital remains at Euro 49,722,417 while the number of ordinary shares increases from 42,822,774 to 42,902,774, while the class B shares remained unchanged (8,316,020 shares) and consequently the total number of shares remains unchanged (51,218,794 shares).

The breakdown of Aquafil SpA’s subscribed and paid-up share capital at December 31, 2023 is shown below:

Type of shares

No. shares

% of Share Capital

Listing

Ordinary

42,902,774

83.76%

MTA, STAR Segment

Class B

8,316,020

16.24%

Non-listed

Class C

Total

51,218,794

100%

Pag. 102 di 246

On the basis of communications sent to the National Commission for Companies and the Stock Exchange (CONSOB), and received by the Company pursuant to Article 120 of Legislative Decree No. 58 of February 24, 1998, as well as the effect of the conversion of Market Warrants, holders of a significant shareholding as at December 31, 2023 - i.e. considering Aquafil SpA’s qualification as an SME pursuant to Article 1 (w-quater). 1 of the CFA, of a shareholding of greater than 5% of Aquafil SpA share capital with voting rights;

The declarant or subject at the top of the equity chain

Direct shareholder

Type of shares

Number of shares

No. of voting

rights

GB&P S.r.l.

Aquafin Holding S.p.A.

Ordinary

21,554,705

Class B

8,316,020

24,948,060

Total

29,870,725

46,502,765

Holding

58.32%

68.52%

Warrants

The following were initially issued on listing:

(i)7,499,984 Aquafil Market Warrants, listed and identified by the ISIN Code IT0005241200, which incorporate the right to the allocation of Aquafil SpA ordinary shares and are exercisable under the conditions set out in the relative regulation approved by the Space3 extraordinary shareholders’ meeting by resolution of December 23, 2016. Pursuant to the Aquafil SpA Market Warrant Regulation (ISIN IT0005241200), December 4, 2022 was the deadline for the exercise of the Aquafil Warrants financial instruments, as 60 (sixty) months had elapsed since the date of admission to listing of Aquafil’s ordinary shares (ISIN IT0005241192);

(ii)800,000 Aquafil Sponsor Warrants, identified by the ISIN Code IT0005241754, non-listed and exercisable within ten years from the date of December 4, 2017, payable at the unit exercise price of Euro 13.00 (on achieving a "Strike Price" of Euro 13.00), in response to the allocation of an ordinary Aquafil share for each Sponsor Warrant exercised.

On December 4, 2022, the exercise deadline for the Aquafil Market Warrants financial instruments concluded, and therefore as of December 31, 2022, 2,014,322 Aquafil Market Warrants have been converted with the allotment of 498,716 Conversion Shares. As of December 31, 2023, therefore, no other Market Warrants are outstanding, while it is noted that no Aquafil Sponsor Warrants have been converted.

Pag. 103 di 246

Legal reserve

The legal reserve at December 31, 2023 was equal to Euro 2.1 million; the increase of Euro 0.8 million was approved by the Shareholders’ Meeting of April 27, 2023 which allocated to this reserve one twentieth of the profit for the year 2022.

Translation reserve

The translation reserve, negative at December 31, 2023 for Euro 14.6 million (increased by a negative effect of Euro 11.5 million in the year), includes all the differences arising from the translation into Euro of the subsidiaries’ financial statements included in the consolidation scope expressed in foreign currency.

This is the effect of statement translation, so it had no impact on profits for the year, but is recognised on the consolidated comprehensive income statement as reserves to be carried forward.

Share premium reserve

The item amounted to Euro 19.98 million at December 31, 2023 and is derived from the merger transaction between Aquafil SpA and Space 3 SpA in 2017.

Listing costs / Share capital increase reserve

The item amounted to Euro 3.29 million at December 31, 2023 as a decrease in shareholders’ equity and relates to the costs incurred in 2017 for the listing and thereafter the share capital increase.

“First Time Adoption” Reserve (FTA)

Pag. 104 di 246

The item amounts to Euro 2.39 million as a reduction of shareholders’ equity and represents the conversion effects from Italian GAAP to IFRS.

IAS 19 reserve

At December 31, 2023, it was equal to a Euro 0.6 million reduction in shareholders’ equity and includes the actuarial effects at that date of severance indemnities and all the other benefits for employees of Group companies.

Negative reserve for treasury shares in portfolio

The negative reserve for treasury shares in portfolio totalled Euro 8.6 million at December 31, 2023.

As also reported in the 2021 Integrated Report, it is recalled that on October 20, 2021, Aquafil SpA announced that the Company’s Shareholders authorised the purchase of treasury shares in accordance with Article 2357 of the Italian Civil Code. The authorisation by Shareholders had a duration of 18 months from the date of the authorising resolution. The operation was aimed at enabling the Company to purchase and/or make use of the Company’s ordinary shares for: (i) making investments and limiting anomalous changes in share prices so as to promote regular trading outside of normal fluctuations tied to market trends, while, in any event, observing applicable laws and regulations; and (ii) establishing a securities reserve for future uses in accordance with the strategies that the Company intends to pursue as payment in corporate transactions with other parties or other extraordinary uses. The Shareholders authorised the purchase, in one or more tranches, of ordinary shares up to a maximum number which, taking account of the ordinary shares which may be held in portfolio by the company and by its subsidiary, does not total more than 3% of share capital.

On December 31, 2023, following the purchases made, Aquafil held 1,278,450 treasury shares, equal to 2.4961% of the share capital.

Retained earnings

Pag. 105 di 246

At December 31, 2023, the account amounts to Euro 108.9 million and represents the results generated by the Aquafil Group in previous years (including pre-merger with Space3 S.p.A.) net of the distribution of dividends.

Dividends

The Shareholders' Meeting held on April 27, 2023 approved the distribution of a dividend of Euro 12 million (Euro 0.24 per share), which was paid out on May 10, 2023 with coupon date of May 8, 2023.

Minority interest net equity

As illustrated in paragraph 2.3 “Consolidation scope” and consolidation criteria, the minority interests shareholders’ equity substantially reduced to zero.

7.13.Employee benefits

The account is comprised of:

(in thousands of Euro)

December 31, 2022

5,192

Financial charges

166

Provisions

(184)

Advances and settlements

(322)

Actuarial losses/(gains)

252

Balance at December 31st 2023

5,104

For completeness the table below shows the changes in the previous year:

(in thousands of Euro)

December 31, 2021

5,910

Financial charges

Provisions

422

Advances and settlements

(482)

Actuarial losses/(gains)

(724)

December 31, 2022

5,192

The post-employment benefits provision includes the effects of discounting as required by the IAS 19 accounting standard. The following is a breakdown of the main economic and demographic assumptions used for actuarial valuations:

Pag. 106 di 246

Financial assumptions

December 31, 2023

Discount rate

2.95%

Inflation rate

2.00%

Annual increase in employee leaving indemnity

3.00%

Demographic assumptions

Death

The RG48 mortality tables published by the General State Controller

Disability

INPS tables by age and gender

Retirement

100% on satisfying AGO requirements

Annual frequency of Turnover and leaving indemnity advances

Frequency advances

4.50%

Frequency turnover

2.50%

The bond’s financial average duration at December 31, 2023 is approximately 7 years.

For comparability with the previous year a breakdown of the main economic and demographic assumptions used for actuarial valuations at December 31, 2022 is shown below:

Financial assumptions

December 31, 2022

Discount rate

3.57%

Inflation rate

2.30%

Annual increase in employee leaving indemnity

3.23%

Demographic assumptions

Death

The RG48 mortality tables published by the General State Controller

Disability

INPS tables by age and gender

Retirement

100% on satisfying AGO requirements

Annual frequency of Turnover and leaving indemnity advances

Frequency advances

4.50%

Frequency turnover

2.50%

7.14Current and non-current financial liabilities

The account is comprised of:

(Euro thousands)

December 31, 2023

of which current portion

December 31, 2022

of which current portion

Medium/long term bank loans

303,516

77,857

263,114

60,880

Accrued interest and accessory charges on medium/long-term bank loans

(16)

(399)

Total medium/long-term bank loans

303,499

77,841

262,715

60,481

Pag. 107 di 246

Bond loans

70,248

12,857

83,158

12,857

Accrued interest and charges on bonds

401

251

Total bond loan

70,649

13,258

83,409

13,108

Leasing and RoU financial payables

34,696

9,005

21,074

8,224

Liabilities for derivative financial instruments

619

Other lenders and banks – short term

2,438

1,333

Total

411,901

103,161

368,531

83,146

Medium/long term bank loans

This item refers to payables relating to financing agreements obtained from credit institutions.

These agreements stipulate the payment of interest at a fixed rate or, alternatively, at a variable rate typically linked to the Euribor rate for the period plus a spread.

With the exception of the loans undertaken by Tessilquattro SpA and Aquafil Benelux, at year-end all the Group’s loans had been contracted by Aquafil SpA, in view of its positive rating and the favourable situation within the Italian financial market. During the year Aquafil S.p.A. thus provided financial support, through share capital increases for the investment activities of the subsidiaries, particularly to the Slovenian subsidiary.

During 2023, loans were repaid on schedule and new medium/long term loans totalling Euro 100 million were entered into with leading banking institutions.

The funds raised were used to maintain liquidity.

With reference to the loans granted, there are no mortgages or guarantees registered on company assets.

(in thousands of Euro)

Original amount

Granting date

Maturity date

Repayment plan

Rate applied

At December 31, 2023

of which current portion

Medium/long term bank loans - fixed rate

Cassa Centrale Banca (former Casse Rurali Trentine) (*)

15,000

2019

2026

Quarterly from 30/09/2021

1.25% fixed, from July 1, 2024, 3 mo. Euribor +1%

7,617

2,977

Cassa Centrale Banca (former Casse Rurali Trentine) (*)

11,000

2022

2029

Quarterly from 31/12/2023

1.20% fixed, from April 1, 2026, 3 mo. Euribor +1%

10,516

1,952

Pag. 108 di 246

Crédit Agricole (former: Credito Valtellinese) (*)

15,000

2018

2024

Quarterly from 05/10/2018

1% fixed

3,259

Cassa Depositi e Prestiti (*)

20,000

2020

2027

Half-yearly from 20/06/2023

1.48% fixed

16,000

4,000

ING Belgie NV

2023

2026

Monthly

4.23% fixed

Total Medium/long term bank loans - fixed rate

37,440

12,204

Medium/long term bank loans - variable rate

Deutsche Bank (*)

5,000

2018

2024

Quarterly from 15/01/2019

Euribor 3 months + 1.20%

938

Deutsche Bank (*)

20,000

2022

2028

Quarterly from 01/10/2023

Euribor 3 months + 1.20%

18,000

4,000

Sparkasse - Cassa Risparmio di Bolzano (*)

20,000

2018

2025

Quarterly from 31/03/2020

Euribor 3 months + 0.85%

8,102

4,034

Sparkasse - Cassa Risparmio di Bolzano (*)

10,000

2022

2028

Quarterly from 31/12/2024

Euribor 3 months + 1.05%

10,000

600

Banca Intesa (*)(**)

15,000

2018

2024

Half-yearly from 31/07/2019

Euribor 6 months + 0.95%

2,571

Banca Intesa (*)(**)

30,000

2021

2027

Half-yearly from 30/06/2023

Euribor 6 months + 1.10%

24,000

6,000

Banca Intesa (*)

20,000

2023

2028

Quarterly from 31/12/2025

Euribor 3 months + 0.95%

20,000

Banca di Verona

15,000

2017

2024

Quarterly from 30/06/2017

Euribor 3 months + 2%

3,275

Banca di Verona

3,000

2019

2024

Quarterly from 06/08/2021

Euribor 3 months + 1.30%

1,182

Banca di Verona

5,000

2022

2027

Quarterly from 27/04/2024

Euribor 6 months + 1.20%

5,000

388

Banca di Verona

5,000

2023

2028

Quarterly from 04/04/2024

Euribor 6 months + 1.20%

5,000

570

BPM - Banca Popolare di Milano (*) (**)

25,000

2018

2025

Quarterly from 31/03/2020

Euribor 3 months + 0.90%

11,672

4,491

BPM - Banca Popolare di Milano (*) (**)

15,000

2019

2025

Quarterly from 30/09/2020

Euribor 3 months + 1.05%

6,173

3,010

BPM - Banca Popolare di Milano (*)

15,000

2023

2028

Quarterly from 30/09/2023

Euribor 3 months + 1.15%

13,657

2,772

BPER - Banca Popolare Emilia Romagna (*) (**)

10,000

2019

2025

Monthly from 26/09/2020

Euribor 3 months + 0.75%

4,203

2,516

BNL - Banca Nazionale del Lavoro (*)

7,500

2018

2025

Half-yearly from 31/12/2019

Euribor 6 months + 1.40%

2,727

2,045

BNL - Banca Nazionale del Lavoro (*) with BEI fund

12,500

2018

2025

Half-yearly from 31/12/2019

Euribor 6 months + 1.25%

4,545

3,409

BNL - Banca Nazionale del Lavoro (*)

20,000

2022

2027

Quarterly from 08/12/2023

Euribor 3 months + 1.40%

18,750

5,000

BNL - Banca Nazionale del Lavoro (*) (**)

10,000

2023

2028

Quarterly from 05/10/2024

Euribor 3 months + 1.55%

10,000

625

Crédit Agricole (ex Banca Popolare Friuladria) (*) (**)

10,000

2017

2024

Quarterly from 31/03/2019

Euribor 3 months + 1.30%

2,814

1,852

Crédit Agricole (ex Banca Popolare Friuladria) (*) (**)

10,000

2019

2025

Half-yearly from 28/12/2020

Euribor 6 months + 1.05%

3,636

1,818

Crédit Agricole (former Banca Popolare Friuladria) (*)

10,000

2023

2029

Half-yearly from 29/09/2024

Euribor 6 months + 1.35%

10,000

795

Crédit Agricole (former: Credito Valtellinese) with Central Fund guarantee

5,000

2020

2026

Quarterly from 30/09/2021

Euribor 3 months + 1.40%

2,457

977

Pag. 109 di 246

Crediti Emiliano

5,000

2022

2027

Quarterly from 16/09/2023

Euribor 3 months + 0.90%

4,494

1,043

Mediocredito Trentino Alto Adige

3,000

2022

2026

Quarterly from 16/10/2023

0.85% fixed until 15/10/2022 - Euribor 3 months +1%

2,753

994

Monte dei Paschi di Siena (*)

15,000

2018

2025

Half-yearly from 31/12/2019

Euribor 6 months + 0.80%

5,625

3,750

Monte dei Paschi di Siena (*) (**) with SACE guarantee

20,000

2023

2028

Quarterly from 30/09/2025

Euribor 3 months + 0.75%

20,000

MCC - Banca del Mezzogiorno (*)

10,000

2019

2026

Quarterly from 09/11/2020

Euribor 1 month + 1.20%

4,500

2,000

MCC - Banca del Mezzogiorno (*)

15,000

2023

2028

Quarterly from 30/06/2025

Euribor 3 months + 1.20%

15,000

Cassa Depositi e Prestiti (*)

20,000

2022

2027

Half-yearly from 30/06/2024

Euribor 6 months + 1.55%

20,000

5,000

Volksbank

5,000

2023

2028

Quarterly from 31/03/2025

Euribor 3 months + 1.60%

5,000

Total Medium/long term bank loans - variable rate

266,075

65,653

Accrued interest on medium/long term bank loans

(16)

Medium/long term bank loans - fixed and variable rate

303,499

77,841

* Loans that provide for compliance with financial covenants

** Loan to which an interest rate swap contract is linked under which interest to be paid to the bank is fixed and equal to the value shown in the table

Certain loan agreements provide for compliance with financial and equity covenants, as summarised below:

Loan

Period

Parameter

Reference

Limit

Crédit Agricole (former Banca Friuladria)

Annually

Net Debt / Net Equity

Group

≤ 2.50

Annually

Net Debt / EBITDA

≤ 3.75

Crédit Agricole (former Banca Friuladria) - Loan disbursed in 2023

Annually

Net Debt / Net Equity

Group

≤ 2.50

Annually

Net Debt / EBITDA

≤ 4.00

Banca Intesa San Paolo

Annually

Net Debt / Net Equity

Group

≤ 2.50

Annually

Net Debt / EBITDA

≤ 3.75

Sparkasse - Cassa di risparmio di Bolzano

Annually

Net Debt / Net Equity

Group

≤ 2.50

Annually

Net Debt / EBITDA

≤ 3.75

BNL - Banca Nazionale del Lavoro

Annually

Net Debt / Net Equity

Group

≤ 2.50

Annually

Net Debt / EBITDA

≤ 3.75

Banco BPM

Annually

Net Debt / Net Equity

Group

≤ 2.50

Annually

Net Debt / EBITDA

≤ 3.75

Crédit Agricole

Annually

Net Debt / Net Equity

Group

≤ 2.50

Annually

Net Debt / EBITDA

≤ 3.75

Deutsche Bank

Annually

Net Debt / Net Equity

Group

≤ 2.50

Annually

Net Debt / EBITDA

≤ 3.75

Monte dei Paschi di Siena

Annually

Net Debt / Net Equity

Group

≤ 2.50

Annually

Net Debt / EBITDA

≤ 3.75

Cassa Centrale Banca (former Casse Rurali Trentine)

Annually

Net Debt / Net Equity

Group

≤ 2.50

Annually

Net Debt / EBITDA

≤ 3.75

BPER - Banca Pop. Emilia Romagna

Annually

Net Debt / Net Equity

Group

≤ 2.50

Annually

Net Debt / EBITDA

≤ 3.75

MCC - Banca del Mezzogiorno

Annually

Net Debt / Net Equity

Group

< 2.50

Annually

Net Debt / EBITDA

< 3.75

CDP - Cassa Depositi e Prestiti

Annually

Net Debt / Net Equity

Group

≤ 2.50

Annually

Net Debt / EBITDA

≤ 3.75

In relation to the financial covenants established in the bond and loan agreements detailed above, the Group prudently obtained before the end of the financial year:

Pag. 110 di 246

1. by the lenders, the “holiday” covenant for verification of the consolidated “NFP/EBITDA leverage ratio” and of the “NFP/Shareholders’ Equity” covenant for the year ended December 31, 2023 and for the cases applicable to the consolidated half-year report at June 30, 2024, with the return to contractual status at December 31, 2024;

2. by the bond subscribers the redrafting of the following financial covenants:

•“NFP/EBITDA leverage ratio” financial covenants to 5.50 and the return to contractual status at December 31, 2024;

•Consolidated “Interest Coverage Ratio” from 4 to 2.50 at December 31, 2023 to3 ad December 31, 2024, and to 3.5 at December 31, 2025.

With reference to the loans granted, there are no mortgages or guarantees registered on company assets.

Bond loans

The Company has two fixed-rate bonds outstanding, with a total original value of Euro 90 million, which at December 31, 2023 amounted to Euro 70 million, decreasing on the previous year by approx. Euro 12.9 million due to the repayment of the instalment due in 2023. The outstanding bonds have the following features:

•a first bond loan (“A”), initially issued on June 23, 2015 and subscribed by companies belonging to the US Group Prudential Financial Inc., with a value equal to Euro 50 million, to be repaid in 7 equal instalments of Euro 7.1 million, of which final maturity on September 20, 2028, with residual debt at December 31, 2023 of Euro 35.7 million; the loan is subject to a fixed interest rate of 3.70% with the application of a "margin ratchet" which provides for a gradual increase in the rate up to a maximum of 1% on the fluctuation of the NFP/EBITDA ratio of the Group. The NFP/EBITDA ratio at December 31, 2022, resulted in a rate increase from 3.75% to 4.20% for the following six-month period (from March to September 2023). Due to the NFP/EBITDA ratio at June 30, 2023, the interest rate increased from 4.20% to 4.70%, which remains valid until March 2024;

Pag. 111 di 246

•a second bond “B” was issued on May 24, 2019, to finance the business combination of Aquafil O’Mara Inc., and subscribed by companies belonging to the US Group Prudential Financial Inc. for a total of Euro 40 million; the terms provide for repayment in 7 annual instalments from May 24, 2023, the remaining balance of which was Euro 34.3 million at December 31, 2023; the fixed interest rate is equal to 1.87%, with the application of the same margin ratchet condition as for bond “A”. As a result of the NFP/EBITDA ratio at June 30, 2022, the interest rate remained at 1.87% until May 2023, then increased to 2.37% for the period May–November 2023 as a result of the ratio at December 31, 2022. Due to the NFP/EBITDA ratio at June 30, 2023, the interest rate increased to 2.87% until May 2024.

The following table summarises the main characteristics of the aforementioned bond loans:

Bond loan

Total Nominal Value

Issue date

Maturity date

Capital portion repayment plan

Interest rate applied

Bond loan A

50,000,000

23/06/2015

20/09/2028

7 annual instalments from 20/09/2022

4.70%

Bond loan B

40,000,000

24/05/2019

24/05/2029

7 annual instalments from 24/05/2023

2.87%

Bond loans envisage compliance with the following financial covenants, as contractually defined, to be calculated on the basis of the Group’s consolidated financial statements:

Bond loan A-B

Financial parameters

Parameter

Covenant limit

Interest Coverage Ratio

EBITDA / Net financial charges

> 3.5

Leverage Ratio (*)

Net Debt / EBITDA

< 3.75

Net Debt Ratio

Net Debt / Net Equity

Minimum Net Equity threshold levels

(*) This indicator must be calculated with reference to the 12-month period which terminates on December 31 and June 30 for all years applicable.

Non-compliance with just one of the above financial parameters, where not resolved within the contractual deadlines provided, would constitute a circumstance for the bond loan’s compulsory early repayment.

Pag. 112 di 246

Specifically, there are in fact certain limitations on the assumption of financial debt, on carrying out certain investments and on acts of disposal of corporate assets. To ensure the timely and correct fulfilment of obligations arising on account of the Parent Company from the issue of securities, the companies Aquafil Usa Inc. and Aquafil SLO doo have issued joint corporate guarantees in favour of underwriters.

Lease liability

Financial payables for leases, which amounted to Euro 34.7 million, increased on December 31, 2022 (Euro 21.1 million), and refer to the effects of the application of IFRS 16. The increase is mainly attributable to the signing of new lease agreements during the year, as detailed in paragraph 7.3 of these explanatory notes.

7.15.Provisions for risks and charges

The account is comprised of:

(Euro thousands)

December 31, 2023

December 31, 2022

Agents’ supplementary indemnity provision and others

1,600

1,734

Guarantee fund on client engineering orders

109

241

Total

1,710

1,975

The balance at December 31, 2023 of Euro 1.7 million is in line with December 31, 2022.

7.16Other current and non-current liabilities

The account is comprised of:

(Euro thousands)

December 31, 2023

of which current portion

December 31, 2022

of which current portion

Employee payables

9,912

12,532

Social security payables

3,103

3,229

Payables to parent for income taxes

230

Tax payables

2,511

2,125

Other payables

2,021

1,215

Accrued liabilities and deferred income

9,151

3,299

14,817

5,832

Total

26,698

20,846

34,148

25,163

Pag. 113 di 246

“Employee payables" refers to sums due by Group companies to their employees at the end of the year and amounts to Euro 9.9 million, decreasing Euro 2.6 million on December 31, 2022 (Euro 12.5 million). This decrease is strictly correlated with the reduction in the total active workforce at December 31, 2023, compared to the end of the previous year.

“Social security payables” mainly includes the amount owed at year-end by the Group companies and their employees to social security institutions and amounts to Euro 3.1 million, in line with December 31, 2022.

“Payables to parent for income taxes”, which at December 31, 2023 amounted to Euro 0.2 million, refer to Tessilquattro SpA payables to the parent company Aquafin Holding SpA as per the tax consolidation regime. They were fully settled in the current year.

“Tax payables”, in the amount of Euro 2.5 million, are essentially in line with the previous year.

“Accrued liabilities and deferred income” mainly comprise:

•the commercial contract with the US group Interface, involving a worldwide collaboration for supply and product development. In particular, Aquafil SpA undertook an obligation until 2026 to guarantee Interface conditions of supply, against which the client, in addition to committing to annual minimum volumes, paid to Aquafil SpA USD 24 million in advance. At December 31, 2023, this deferred revenue (recognised to deferred income) amounts to Euro 4.6 million;

•the deferral of the portion pertaining to future years of the contribution obtained from the European Union for the “Effective” research project, described in the Directors’ Report and also commented on in the notes above. The original deferred income recognised for Euro 3.3 million which concerns the overall contribution recorded at the signing date of the agreement with lending banks (with counter-entry to Other non-current assets), amounts to Euro 1.4 million at December 31, 2023. It should be noted that from 2019 onwards, costs relating to the “Effective” project have been capitalised under intangible assets in progress for the portion eligible under IAS 38. Therefore, the residual contribution concerning the capitalised portion is recognised to the income statement from 2022, for a period of 5 years, as the asset has been capitalised and is depreciated over that timeframe.

7.17.Trade payables

The account is comprised of:

(Euro thousands)

December 31, 2023

December 31, 2022

Trade payables

114,950

125,445

Payables to parent, associates and other related parties

551

270

Pag. 114 di 246

Payments on account

506

1,126

Total

116,006

126,840

Trade payables amount to Euro 116 million, decreasing Euro 10.8 million from December 31, 2022 (Euro 126.8 million), due essentially to the decrease in the cost of raw materials and of services, as detailed in both the Directors’ Report and the explanatory notes. It should be noted that at the end of the year that approx. Euro 2.6 million were ceded by the parent company in confirming mode at market conditions.

At December 31, 2023 there were no commercial payables falling due over five years.

8.NOTES TO THE CONSOLIDATED INCOME STATEMENT

8.1.Revenues

The breakdown of revenues is shown below:

2023

2022

Change

in Euro millions

EMEA

295.2

52%

372.9

55%

(77.8)

(21)%

North America

182.7

32%

202.1

30%

(19.4)

(10)%

Asia and Oceania

92.0

16%

105.8

15%

(13.8)

(13)%

Rest of the world

2.0

3.3

(1.3)

(40)%

Total

571.8

100%

684.1

100%

(112.3)

(16)%

Revenues almost entirely include the value of the sale of goods of the three Group product lines described above, that is, the BCF Product Line (carpet fibres), the NTF Product Line (clothing fibres) and the Polymers Product Line.

Revenues by Product Line are detailed in the Directors’ Report, which reports that the significant decrease in revenues came in the EMEA (decrease of Euro 77.8 million, down 21% on 2022), in North America (decrease of Euro 19.4 million, down 10% on 2022), and in Asia and Oceania (decrease of Euro 13.8 million, down 13% on 2022).

Pag. 115 di 246

Generally speaking, the decrease in revenues was the result of both a reduction in quantities sold and a decline in average sales prices, as described in greater detail in the Directors’ Report.

“Revenues” include, in accordance with IFRS 15, “cash discounts” as a direct reduction, amounting to Euro 2.8 million at December 31, 2023 (Euro 3.8 million at December 31, 2022).

8.2.Other revenues and income

“Other revenues and income" amount to Euro 8.9 million and refers mainly to:

-Euro 4.8 million grants received for the U.S. activities, mainly for the recovery of end-of-life carpets;

-Euro 2.5 million for the energy and gas tax credit subsidy granted during the year for electricity-intensive and natural gas-intensive companies that have met the requirements under the regulations (Decree Law No. 4 of 27/01/2022 and subsequent, Law No. 197, Legs. Decree No. 34 of 2023) concerning the parent company Aquafil SpA and the subsidiary Tessilquattro SpA;

-Euro 0.3 million for the 2023 portion of investments made by the subsidiary Tessilquattro S.p.A. beginning in 2020 as allowed under the tax incentives created under Article 1(9) of Italian law no. 232 of December 11, 2016, and subsequent law nos. 205 of December 27, 2017, 145 of December 30, 2018, 160 of December 27, 2019, 178 of December 30, 2020, and 234 of December 30, 2021;

-Euro 0.4 million regarding the portion in the year of the deferral related to the grant recognised by the EU for the "Effective" research project, relating to the parent company Aquafil SpA for Euro 0.2 million and the subsidiary AquafilSLO doo for Euro 0.2 million;

-Euro 0.2 million related to the grant received by Aquafil S.p.A. and by the subsidiary Tessilquattro S.p.A. in accordance with Article 1(1054) of Italian law no. 178/2020, which establishes a grant for companies that invest in capital goods to be used in production;

-Euro 0.1 million relating to the tax credit on the purchase of capital goods and for the contribution recognised by the EU for the "Cisuflo" project.

8.3.Raw material costs

The account includes raw materials and consumables costs, in addition to changes in inventories.

Pag. 116 di 246

The account is comprised of:

(Euro thousands)

2023

2022

Raw materials and semi-finished goods

260,497

275,505

Ancillaries and consumables

25,918

34,830

Other purchases and finished products

5,206

7,480

Total

291,620

317,815

Raw materials, ancillaries and consumables amount to Euro 291.6 million, decreasing Euro 26.2 million (8%) on the previous year (Euro 317.8 million). As also outlined in the Directors’ Report, 2023 was impacted by the high stock values in 2022, despite the reduction in raw material costs during 2023.

8.4.Service costs and rent, lease and similar costs

The account is comprised of:

(Euro thousands)

2023

2022

Transport, shipping & customs

16,187

34,940

Electricity, propulsive energy, water and gas

55,848

77,529

Maintenance

10,023

10,364

Services for personnel

6,240

6,210

Technical, ICT, commercial, legal & tax consultancy

11,828

10,360

Insurance

3,599

3,428

Marketing and advertising

3,478

4,341

Cleaning, security and waste disposal

3,620

4,002

Warehousing and external storage

4,337

4,483

External processing

5,328

5,777

Other sales expenses

262

298

Statutory auditors fees

163

161

Other service costs

3,332

4,068

Rentals and hire

2,661

2,510

Total

126,907

168,472

Service costs amount to Euro 126.9 million, decreasing Euro 41.6 million on 2022 (Euro 168.5 million). The reduction, related to the lower production volumes, was particularly significant in terms of transport and utility costs which, as outlined in the Directors' Report, significantly declined during 2023.

8.5 Labour costs

These costs are broken down as follows:

Pag. 117 di 246

(Euro thousands)

2023

2022

Wages and salaries

97,540

97,772

Social security charges

20,846

20,783

Post-employment benefits

1,732

2,003

Other non-recurring costs

3,006

1,565

Director fees

1,910

4,753

Total

125,034

126,875

Labour costs amount to Euro 125.0 million, decreasing Euro 1.8 million on 2022. The reduction in labour costs is mainly due to the change in the composition of the workforce in 2023, particularly in relation to the reduction in the average number of senior managers (as detailed in the table below), which was partially offset by rising inflation, which led to an increase in wages and salaries in a number of countries in which the Aquafil Group operates.

Other non-recurring costs mainly concern the leaving incentives incurred by Aquafil S.p.A. for Euro 1.1 million, AquafilSLO d.o.o. for Euro 0.7 million, Aquafil UK Ltd for Euro 0.8 million, and Aquafil Carpet Recycling #1 Inc. for Euro 0.3 million.

The number of employees, broken down by category, is as follows:

31.12.2023

31.12.2022

Average 2023

Average 2022

Managers

Middle managers

183

160

171

157

White-collar

382

433

419

433

Blue-collar

2,031

2,132

2,154

2,155

2,637

2,772

2,789

2,795

8.6.Other operating costs and charges

These costs are broken down as follows:

(Euro thousands)

2023

2022

Taxes, duties & sanctions

2,720

2,494

Losses on asset sales

167

Other operating charges

904

1,377

Total

3,644

4,038

“Other operating costs and charges” amounted to Euro 3.6 million, decreasing Euro 0.4 million on 2022. The account mainly comprises “Taxes, duties and sanctions” for Euro 2.7 million, which mainly concern local property taxes and for Euro 1.0 million “Other operating charges”.

Pag. 118 di 246

8.7.Amortisation, depreciation and write-downs

The account is comprised of:

(Euro thousands)

2023

2022

Amortisation

6,741

6,252

Depreciation

33,233

33,270

RoU (Right-of-Use) depreciation

9,525

8,329

Write-down of intangible assets

137

Total

49,635

47,851

Amortisation and depreciation totalled Euro 49.6 million, increasing Euro 1.8 million on 2022. The increase is due to the straight-line amortisation and depreciation in the year, in addition to the amortisation and depreciation on the bio-caprolactam project initiated in the previous year.

8.8.Provisions & write-downs/(releases)

The account is comprised of:

(Euro thousands)

2023

2022

Doubtful debt provision

(895)

(42)

Provisions for risks and charges

(107)

222

Total

(1,002)

180

The increase from the previous year is mainly due to the release of a portion of the doubtful debt provision of the parent company.

8.9.Increases in fixed assets for internal work

In 2023 this item, amounting to Euro 6,3 million (Euro 5.7 million in 2022), mainly refers to the capitalisation during the year of the following projects:

-for Euro 2.6 million new product development costs (IAS 38);

-for Euro 1.6 million, the increase in industrial and energy efficiency and capacity at Group plant;

Pag. 119 di 246

-for Euro 0.8 million the increase in industrial and energy efficiency in the production of ECONYL® caprolactam and its raw materials, in addition to the development of circularity-focused technologies;

-for Euro 0.3 million other activities mainly related to the Group's digitization processes.

8.10.Financial income

The account is comprised of:

(Euro thousands)

2023

2022

Derivative financial instruments

4,506

Other interest

Interest income current accts.

1,003

290

Total

1,022

4,869

“Financial income” amounted to Euro 1.0 million, decreasing Euro 3.8 million on 2022 which had benefited from the fair value movement of derivatives (IRS). As previously illustrated, “hedge accounting” was not applied to these derivatives as, although entered into for hedging purposes, have been considered for accounting purposes and consistently with the past, as non-hedging instruments (and therefore the relative fair value is recognised in the income statement), as it is very complex to prepare the mandatory hedging relationship.

8.11.Financial charges

The account is comprised of:

(Euro thousands)

2023

2022

Interest on bank loans and borrowings

9,067

3,197

Interest on bonds

2,570

2,705

Interest exp. on current accounts

1,135

797

Write-down of derivative financial instruments

2,709

Other financial and interest expense

3,560

1,669

Total

19,041

8,369

"Financial charges" of Euro 19.0 million increased Euro 10.7 million on 2022, mainly due to the increase in interest charges on mortgages and bank loans, in addition to the decrease of Euro 2.7 million in the fair value of derivatives (IRS).

Pag. 120 di 246

8.12.Exchange gains and losses

The breakdown of the account is as follows:

(Euro thousands)

2023

2022

Total exchange gains

7,695

16,069

Total exchange losses

(6,901)

(13,286)

Total exchange differences

796

2,783

A net gain of Euro 0.8 million is reported for 2023, as the net balance between realised exchange gains and losses.

8.13.Income taxes

The breakdown of the account is as follows:

(Euro thousands)

2023

2022

Current and prior-year taxes

2,631

9,171

Deferred tax income/charges

(2,774)

(1,454)

Total

(143)

7,717

The total of current and deferred taxes at December 31, 2023, came to a positive Euro 0.1 million, as a result of positive deferred taxes in the amount of Euro 2.7 million, which were partially offset by current and prior-year taxes in the amount of Euro 2.6 million.

For better comparability, we indicate that a reclassification of the figures at December 31, 2023 for the “Current and prior-year taxes” and “Deferred tax income/charges” account was made.

The table below shows a reconciliation of the theoretical tax charge for the Group (estimated at 24% of pre-tax profit) and the actual tax charge:

(in thousands of Euro)

2023

Theoretical rate

2022

Theoretical rate

Pre-tax profit

(25,992)

36,868

Tax calculated on applicable rate

6,238

24%

(8,848)

24%

Total current income taxes

(2,631)

1,454

Total deferred taxes

2,774

(9,171)

Total effective taxes

143

(7,717)

Change tax rate

6,095

(1,132)

Changes permanent increases

837

894

Pag. 121 di 246

Changes permanent decreases

(237)

(2,204)

Non-accrual of deferred tax assets

4,346

514

Prior year taxes

1,590

647

Other taxes (WHT)

1,618

(379)

Other changes

(2,050)

(603)

The difference between the theoretical and actual tax rate of the Group (24%) is mainly due to the prudent non-accrual of deferred tax assets by certain companies of the Group, as well as to prior-year taxes and other taxes incurred during they year, partially offset by the recovery of deferred tax assets in relation to the mutual agreement procedure initiated on October 4, 2023, as was done for fiscal year 2017 (and as described in the section “Contingent Liabilities”). It should be noted that, based on estimates made at that time, the Group did not fall within the scope of application of the rules of Pillar 2, the goal of which is to ensure that large multinationals pay income taxes of at least 15%.

8.14 Non-recurring items

The account is comprised of:

(in thousands of Euro)

2023

2022

Non-recurring charges

390

530

Expansion costs Aquafil Group

600

417

ACR1 non-recurring costs and revenues

308

853

Costs and revenues closure and extraordinary management Aquafil UK

1,348

Restructuring and other personnel costs

1,897

1,109

Extraordinary administrative and legal consultancy

456

123

Total non-recurring costs

4,999

3,032

Extraordinary income

(53)

(132)

Total non-recurring income

(53)

(132)

Non-operating income and charges

4,946

2,901

The item "Expansion costs Aquafil Group" refers to costs incurred by the group in order to assess new business opportunities.

The item “ACR1 non-recurring costs and revenues” refers to costs and revenues of Aquafil Carpet Recycling # 1, which was impacted by an extraordinary event in the United States that involved extraordinary restoration work.

As described in greater detail in relation to the significant events for the year, the net costs related to Aquafil UK Ltd. refer to the process of ceasing production, which began in September 2023.

Pag. 122 di 246

The item “Restructuring and other personnel costs” mainly refers to costs incurred by certain group companies within the scope of reorganisation efforts, as described in greater detail in paragraph 8.5.

The item “Extraordinary administrative and legal consultancy” refers to extraordinary fiscal consultancy costs incurred in 2023.

The percentage of the non-recurring items of the result, of cash flows, of the equity position, and of the net debt, are reported below.

(in thousands of Euro)

of which non-recurring

Percentage

Net Profit/(loss)

(25,849)

(4,946)

19.1%

Net cash flow in the year

46,980

(4,361)

(9.3)%

(*)

Total assets

701,216

(585)

(0.1)%

(**)

Net financial debt

(248,537)

(4,361)

1.8%

(*)

(*) This amount concerns the non-recurring items paid in the year.

(**) amount of non-recurring income statement items yet to be paid at year-end

8.15Earnings per share

The breakdown of the account is as follows:

(in thousands of Euro)

2023

2022

Profit attributable to the owners of the Parent

(25,849)

29,151

Weighted average number of shares

51,139

Earnings/(loss) per share (in Euro)

(0.51)

0.57

Earnings/(loss) per share – diluted (in Euro)

(0.51)

0.57

We point out that diluted earnings per share is equal to the above-mentioned earnings per share as there are no stock option plans.

9.Net financial debt

Below is the breakdown of the net financial debt at December 31, 2023 and December 31, 2022, determined in accordance with the ESMA Guidelines (32-382-1128):

Pag. 123 di 246

NET FINANCIAL DEBT

(in Euro thousands)

At December 31, 2023

At December 31, 2022

A. Cash

157,662

110,682

B. Cash and cash equivalents

C. Other current financial assets

5,703

9,964

D. Liquidity (A) + (B) + (C)

163,364

120,646

E. Current financial debt (including debt instruments but excluding the current portion of non-current financial debt)

(2,438)

(1,333)

F. Current portion of non-current financial debt

(100,723)

(81,814)

G. Current financial debt (E + F)

(103,161)

(83,146)

H. Net current financial debt (G - D)

60,204

37,500

I. Non-current financial debt (excluding current portion and debt instruments)

(251,350)

(215,084)

J. Debt instruments

(57,391)

(70,301)

K. Trade payables and other non-current payables

L. Non-current debt (I+J+K)

(308,741)

(285,385)

M. Total financial debt (H+L)

(248,537)

(247,885)

The net financial reconciliation between the beginning and end of the period are presented below. The effects indicated include the currency effects.

(in thousands of Euro)

current portion

non-current portion

Net Debt at December 31, 2022

(247,885)

110,837

(358,722)

Net cash flow in the year

46,980

Change in liquidity subject to restrictions

(2,173)

New bank loans and borrowings

(100,049)

(4,778)

(95,270)

Repayment bank loans

72,025

Leasing New Funding

(24,040)

Repayment of leasing loans

10,091

Change in fair value derivatives

(2,709)

Other changes

(778)

Net Debt at December 31, 2023

(248,537)

229,495

(478,032)

Pag. 124 di 246

10.RELATED PARTY TRANSACTIONS

Transactions and balances with related parties are illustrated in the tables below. The companies indicated are considered related parties as directly or indirectly related to the majority shareholder of the Aquafil Group. Transactions with related parties were undertaken in line with market conditions.

Payables and receivables of the Group with related parties are illustrated in the table below:

(in thousands of Euro)

Parent companies

Subsidiaries

Associates

Related parties

Total

Total book value

% on total account items

Non-current financial assets

December 31, 2023

1,023

1,102

1,558

70.7%

December 31, 2022

234

1,018

1,336

1,849

72.3%

Trade receivables

December 31, 2023

275

351

26,206

1.3%

December 31, 2022

305

376

28,553

1.3%

Other current assets

December 31, 2023

5,854

14,644

40.0%

December 31, 2022

247

15,862

1.6%

Non-current financial liabilities

December 31, 2023

(3,217)

(308,741)

1.0%

December 31, 2022

(831)

(4,431)

(5,262)

(285,385)

1.8%

Current financial liabilities

December 31, 2023

(1,872)

(103,161)

1.8%

December 31, 2022

(537)

(2,420)

(2,957)

(83,146)

3.6%

Trade payables

December 31, 2023

(184)

(367)

(551)

(116,006)

0.5%

December 31, 2022

(270)

(126,840)

0.2%

Other current liabilities

December 31, 2023

(20,846)

0.0%

December 31, 2022

(230)

(25,163)

0.9%

“Non-current financial assets” with associates amount to Euro 1,023 thousand and concern the equity measurement of investments held by the parent company in the associated companies Nofir AS and Poly-Service SAS, as well as the investment held by Aquafil Cile S.p.A. in the joint venture Acca S.p.A.

Pag. 125 di 246

“Trade receivables” from parent companies total Euro 275 thousand and concern the trade receivable of Aquafil S.p.A. from Aquafin Holding S.p.A.

“Other non-current assets” amount to Euro 5,854 thousand and concern the receivable of Aquafil S.p.A. from Aquafin Holding S.p.A. for the transfer of taxes within the scope of the tax consolidation agreement.

“Non-current financial liabilities” amount to Euro 3,217 thousand and concern long-term financial payables for the lease agreement related to the Rovereto plant, the payable to Aquaspace S.p.A. by Aquafil S.p.A. for Euro 1,224 thousand and by the subsidiary Tessilquattro S.p.A. for Euro 1,993 thousand.

“Current financial liabilities” amount to Euro 1,872 thousand and concern: the short-term portion of the lease agreement related to the Rovereto plant payable to Aquaspace S.p.A. by Aquafil S.p.A. for euro 273 thousand and by Tessilquattro S.p.A. for Euro 474 thousand; Euro 467 thousand for the short-term portion of the lease agreement related to the Slovenian plant payable to Aquasava d.o.o. by AquafilSLO; and Euro 751 thousand for the short-term portion of the lease agreement related to the US plant payable to Aquafin USA Inc. by Aquafil USA Inc.

“Trade payables” amount to Euro 551 thousand and mainly concern Euro 184 thousand in trade payables of Aquafil S.p.A. to Aquafin Holding S.p.A. and Euro 367 thousand in trade payables to Aquaspace S.p.A.

The transactions of the Group with related parties are illustrated in the table below:

(in thousands of Euro)

Parent companies

Associates

Related parties

Total

Book value

% on total account items

Revenues

FY 2023

231

283

571,806

0.0%

FY 2022

250

185

435

684,074

0.1%

Service costs and rent, lease and similar costs

FY 2023

(2)

(522)

(524)

(126,907)

0.4%

FY 2022

(465)

(168,472)

0.3%

Other operating costs and charges

FY 2023

(70)

(3,644)

1.9%

FY 2022

(70)

(4,038)

1.7%

Investment income/charges

FY 2023

99.8%

FY 2022

183

801.4%

Financial charges

FY 2023

(23)

(124)

(146)

(19,041)

0.8%

Pag. 126 di 246

FY 2022

(32)

(108)

(140)

(8,368)

1.7%

“Revenues from parent companies” total Euro 231 thousand and concern the administrative consultancy revenues of Aquafil S.p.A. received from Aquafin Holding S.p.A. Other related-party revenues amount to Euro 52 thousand and are mainly related to revenues of the parent company in relation to Aquaspace S.p.A. for administrative consultancy by Tessilquattro S.p.A.

“Service costs and rent, lease and similar costs” are mainly due to costs incurred by Tessilquattro S.p.A. in relation to Aquaspace S.p.A. for waste-disposal services.

“Other operating costs and charges” amount to Euro 70 thousand and concern costs related to the payment of taxes regarding the rebilling of local property taxes of Aquaspace S.p.A. to Aquafil S.p.A. and Tessilquattro S.p.A.

Investment income amounts to Euro 90 thousand and concerns dividends received from Nofir AS in 2023.

Financial charges with parent companies amount to Euro 23 thousand and concern charges related to the property lease agreement in effect between the parent company and Aquafin Holding S.p.A., whereas financial charges with other related parties mainly concern the charges related to lease agreements between Aquaspace S.p.A. and Tessilquattro S.p.A. (Euro 44 thousand), between Aquaspace S.p.A. and Aquafil (Euro 29 thousand), and between Aquafin USA Inc. and Aquafin USA Inc. (Euro 42 thousand).

The following table summarises cash flows with related parties of the Group and their percentage out of the cash flow indicated in the cash flow statement:

(in thousands of Euro)

Total cash flow statement account

of which related parties

% on total account items

Profit/(loss) for they year

(25,849)

(367)

Financial charges

19,041

146

Increase/(Decrease) in trade payables

(10,834)

281

(3)%

Decrease/(Increase) in trade receivables

3,242

Changes to assets and liabilities

(7,754)

(5,837)

75%

Net changes in current and non-current financial assets and liabilities (including IFRS 16)

(4,818)

(2,890)

60%

Distribution of dividends

(11,992)

(7,169)

60%

Pag. 127 di 246

11.OTHER INFORMATION

11.1 Commitments and risks

Other commitments

At December 31, 2023, the parent company Aquafil SpA provided sureties in favour of credit institutions in the interest of subsidiaries, companies subject to the control of the parent company and third parties for a total of Euro 25.1 million.

Contingent liabilities

Provided below is a list of fiscal positions and disputed defined and pending as at the balance sheet date that concern the Parent Company, Aquafil SpA. We are not aware of the existence of further disputes or proceedings that are likely to have significant repercussions on the Group’s economic and financial situation.

(i)Tax audit Aqualeuna GmbH

Periods 2013 – 2015 and 2016 – 2017

The company Aqualeuna GmbH was involved in a tax audit by the competent German federal tax office in Leuna concerning inter-company transactions. On July 15, 2021, the company was notified by the German tax administration’s audits unit in Halle of the conclusion of the tax audits for fiscal years 2013-2017. The upward adjustment to Aqualeuna's assessable income concerned:

(a) for the period 2013-2015, not subject to international cooperation with the Italian administration, for Euro 735 thousand, offset by the equal utilisation of the company's prior year losses;

(b) for the period 2016, subject to joint audit by the two administrations, upward adjustment for Aqualeuna of Euro 1.4 million, with corresponding equal adjustment to the benefit of Aquafil in Italy, for which during the first half of 2022 the corresponding adjustment was made official by the Trento Provincial Office. In fact, on July 26, 2022, the Office

recognised the amount of Euro 410 thousand upon closure of the reimbursement file and therefore without impact on the consolidated results;

Pag. 128 di 246

Large Taxpayers Central Directorate in Rome of the Tax Agency a special Application pursuant to Article 31-quater, paragraph 1, letter c) of Presidential Decree September 29, 1973, No. 600 for the unilateral recognition for IRES and IRAP purposes of the downward adjustment of income against the upward adjustment amounting to Euro 3,733 thousand made in Germany for the stated tax period; the initiation of the procedures provided for in Arbitration Convention No. 90/436/EEC of July 23, 1990, on the elimination of double taxation in the case of adjustments to profits of associated companies. On December 22, 2022, the aforementioned International Dispute Resolution and Prevention Office notified the Company that the mutual agreement procedure pursuant to Article 6 of Arbitration Convention No. 90/436/EEC resulted in an agreement being reached between the competent Italian and German Authorities on the basis of which it was agreed to confirm the adjustments made by the German tax authorities in the amount of Euro 3,733 thousand and to recognise Aquafil the same amount as a corresponding adjustment by the Italian tax authorities.

The German competent authority sent a similar notice to Aqualeuna.

Both companies have sent acceptance of the agreement in relation to the year 2017 to their respective competent authorities.

Similarly to 2016, on February 15, 2023 the Company submitted, pursuant to Article 3, paragraph 1, of Law No. 99 of March 22, 1993, a refund application for IRES and IRAP purposes to the Provincial Directorate of Trento for Euro 997 thousand (Euro 896 thousand for IRES, Euro 101 thousand for IRAP) and thus awaits the refund authorisation measure.

2018 - 2019 Period

For tax years 2018 and 2019, not the subject of the aforementioned audits and during which Aqualeuna recognised further tax losses, the German tax administration began another audit in September 2021, requesting that the Italian tax administration launch a joint audit similar to the one conducted for 2016.

On May 31, 2023, Aqualeuna received a report dated May 15, 2023, from the German tax authority (Finanzamt Merseburg) notifying of the conclusion of the audit of fiscal years 2018 and 2019 (which began on October 5, 2021, and was completed on May 2, 2023).

This audit (not subject to international cooperation between the German and Italian tax authorities) identified the following issues resulting in an increase in taxable income for Aqualeuna: i) Euro 2,363 thousand for fiscal year 2018; and ii) Euro 4,429 thousand related to 2019. For these tax periods, total recoveries therefore result in for German tax purposes for Aqualeuna the reabsorption

Pag. 129 di 246

of the tax losses and positive taxable income for the excess of Euro 282 thousand for 2018 and of Euro 81 thousand for 2019.

For the stated tax periods, Aqualeuna filed an appeal with the tax authorities (Finanzamt Merseburg) against the assessments on June 26, 2023, requesting their suspension in order to allow for the introduction and conclusion of amicable procedures with the relevant Italian authorities.

As was done for fiscal year 2017 and in reference to the aforementioned tax periods, on October 4, 2023, Aquafil initiated a specific mutual cooperation procedure (on both the Italian and the German side) in accordance with Article 3 of Italian Law Decree no. 49 of June 10, 2020, and with Article 4 et seq. of the German law of December 10, 2019, concerning the settlement of disputes regarding double-taxation accords within the European Union, both of which transpose Council Directive (EU) 2017/1852 of October 10, 2017, on the settlement of tax disputes within the European Union.

It is therefore reasonably certain that, upon the outcome of these procedures, the competent authorities of the two States will take pursuant to Directive 2017/1852 a decision by mutual agreement (guaranteed outcome) aimed at eliminating the double taxation that might arise at Group level. The upward adjustment in taxable income imposed in Germany by Aqualeuna (as agreed upon by the two tax authorities) can thus be neutralized (as per point a) of Article 31-quater of DPR 600/1973) by a corresponding opposing adjustment granted to Aquafil by the Italian Tax Agency. Thus, during the year, the parent company Aquafil recognised a positive tax effect that neutralised the tax charge already recognised in the subsidiary Aqualeuna.

In view of that outlined, it is considered that there are no additional contingent liabilities on the part of Aquafil SpA and the Aquafil Group to be covered by an allocation to a risk provision.

(ii)“ACE” tax deduction appeal

On November 2, 2023, the Large Taxpayers Central Directorate responded to the ACE petition filed by the Company on July 4, 2023 with reference to the 2022 tax year, expressing a favourable opinion regarding the request for the disapplication of the anti-avoidance rules set forth in Article 10, paragraphs 2 and 3 (a) and (c) of the new ACE Decree. Thus, during the year, the parent company Aquafil recognised a positive tax effect that neutralised the tax charge already recognised in the subsidiary Aqualeuna.

The application was submitted in continuity with previous tax periods (2019, 2020 and 2021), in relation to which the Central Directorate issued a favourable opinion.

(iii)Suspension of VAT refund – 2019 fiscal year

On June 22, 2020, the Company filed for a VAT refund in the amount of Euro 488 thousand by way of the 2020 tax return (for 2019 income). The reason given was the lower excess credit not

Pag. 130 di 246

transferable for the payment of group VAT (as per Articles 33 and 73 of Italian Presidential Decree 633/1972). On June 17, 2022, the Tax Office, after lengthy investigative and documentary verification activities, notified the Company of the recognition of the 2019 annual VAT credit requested for reimbursement in the amount of Euro 488 thousand, and also in June settled the entire amount, including interest, as required by law.

(iv)Invitation 5-ter of Legislative Decree No. 218/1997 – VAT for 2017

On November 20, 2023, the Trento Office notified Aquafil S.p.A. of an invitation to appear issued, pursuant to Article 5-ter of Legislative Decree No. 218/1997 for the establishment of a case regarding the adjustment of the 2018 VAT filing (for FY 2017) regarding deducted VAT for a total of Euro 790 thousand.

Regarding the VAT in dispute, as previously reported, in June 2020, the Company had requested a refund for a portion of this credit, amounting to Euro 488 thousand. In relation to this, the Office, after reviewing the documentation provided by the Company during the refund process, initially suspended the execution of the refund (Decision of November 6, 2020) and subsequently ordered the recognition of the refund with the settlement of the entire amount (Decision of June 17, 2022).

Based on this act, which contests the VAT payable of Space3 S.p.A. (a company that incorporated Aquafil during the tax period of 2017 as part of the listing operation), a payment totalling Euro 658 thousand is demanded, of which: VAT: Euro 301 thousand (which does not take account of the refunded VAT), sanctions: Euro 296 thousand (equal to 1/3 of the legal total) and interest of Euro 60 thousand (calculated through November 30, 2023).

On December 6, 2023, the Company therefore filed an appeal with the Office, during which it emerged that the act (mistakenly) does not call for recovery of the VAT credit refunded in 2022 for Euro 488 thousand.

At present, the appeal filed with the Trento Office is still under way. Should the disputes and observations filed by the Company not be upheld, the Trento Office will likely issue an assessment notice that includes the VAT credit refunded, which, in such case, will be challenged by the Company.

At present, therefore, any quantification of contingent liabilities is considered premature.

(v)Initiation of audit for direct taxes on 2016, 2017, 2018 and 2019 tax years

On May 11, 2022, the Trento Tax Agency notified the Company of four notices of the initiation of an audit on the 2016, 2017, 2018 and 2019 tax years, with reference to the transfer prices charged by Aquafil to overseas subsidiaries for IT services, in addition to the interest rates applied on loan

Pag. 131 di 246

agreements, in full continuity with the audit on FY 2015, settled with the agreement signed on May 5, 2022.

On conclusion of the case with the Agency, on November 22, 2022, while reaffirming the legitimacy of its conduct, and solely in order to avoid long and exhausting litigation, the Company reached an agreed settlement, after submission of the IPEC Application by the consolidating company Aquafin Holding, paying the amount of Euro 16 thousand (IRAP and interest).

Total IRES and IRAP recoveries settled amounted to Euro 1,016 thousand, resulting in higher IRES of Euro 279 thousand, higher IRAP of Euro 13 thousand and interest of Euro 3 thousand.

With reference to the 2017 tax year, on April 19, 2023, the Trento Office notified the Company of an invitation to appear issued for IRES and IRAP purposes, pursuant to Article 5-ter of Legislative Decree No. 218/1997 for the establishment of a case regarding the recovery of taxation for a total of Euro 853 thousand.

On May 15, 2023, the case was initiated, in which the disputed aspects were highlighted, in relation to which the Office reserved the right to make the appropriate evaluations.

On September 4, 2023, while reaffirming the legitimacy of its conduct, and solely in order to avoid long and exhausting litigation, the Company reached an agreed settlement for corporate income tax (IRES) and for the regional IRAP tax under the following terms, in line with what was done for the 2016 tax period. The final settlement, which did not entail any payment to the tax authority due to the offsetting against the period's losses, amounts to Euro 187 thousand.

Regarding the 2021 tax period, later extended to the years 2018, 2019 and 2020, the audit was entrusted to the “Guardia di Finanza” of Trento within the scope of the general verification initiated on September 7, 2023. This concluded with the notification, on December 11, 2023, of a tax assessment report (PVC) with issued amounting to Euro 2,877 thousand, as follows:

i.transfer pricing issue for the alleged failure to rebill ICT costs to foreign subsidiaries, totalling Euro 2,189 thousand;

ii.transfer pricing issue for failure to invoice interest income to foreign subsidiaries, totalling Euro 667 thousand;

iii.costs and deductions improperly deducted totalling Euro 21 thousand.

An analysis of the PVC revealed that the issues noted by the auditors contain numerous aspects with which we do not agree and which had already been accepted by the Trento Office in the context of audits related to the years 2015, 2016 and 2017.

Pag. 132 di 246

It is presumable that, in accordance with the criteria already used by the Trento Office on the same adjustments contested in previous tax periods, following a settlement procedure that may be activated by the Company, pursuant to Article 6(2) of Legislative Decree 218/1997, after the notification of the tax assessment, the observations could be redetermined in a total of Euro 1,769 thousand, thus with a potential income tax and IRAP burden for the Company estimated at Euro 485 thousand, which the company has prudently allocated to provisions for risks.

It should be noted that, in the PVC, penalties were not applied on the transfer pricing issues, as the documentation was deemed adequate.

11.2Remuneration of senior management

The remuneration and benefits in favour of members of the Board of Directors and Senior Executives and the compensations due to the members of the Board of Statutory Auditors are presented below.

Director and Statutory Auditor fees (in Euro thousands)

2023

(In Euro thousands)

Short-term benefits

2,954

Other long-term employee benefits

Total

2,992

Senior Executive fees (in Euro thousands)

2023

(In Euro thousands)

Short-term benefits

2,266

Other long-term employee benefits

115

Total

2,381

11.3Significant events after December 31, 2023

1.On January 12, 2024, Aquafil S.p.a. received a new unsecured loan in the amount of Euro 10 million from Banca Popolare di Sondrio. The loan is backed by SACE “SupportItalia” guarantee.

2.The following financing was settled by the Company using surplus cash on hand:

Pag. 133 di 246

(i)on January 30, 2024, syndicate loan received from BCC Verona e Vicenza and the ICCREA Group with a residual balance of Euro 2,626 thousand;

(ii)on January 31, 2024, loan received from Intesa Sanpaolo with a residual balance of Euro 2,571 thousand;

(iii)on February 8, 2024, loan received from BCC Verona e Vicenza with a residual balance of Euro 1,000 thousand;

3.On January 10, 2024, the shareholders of Poly-Service S.a.s., in an extraordinary session, approved an increase in share capital in the amount of Euro 200 thousand, by creating 200,000 new shares with a par value of Euro 1 each. The shares were subscribed in their entirety:

(i)by the company Politecnici for up to 110,000 shares on payment of Euro 110 thousand on January 10, 2024;

(ii)by Aquafil S.p.A. for up to 90,000 shares on payment of Euro 90 thousand on January 18, 2024.

4.On January 30, 2024, a non-binding term sheet was signed by Aquafil S.p.A., Kape GmbH, Hafenstraße 47-51, 4020 Linz (Austria), and the investment fund eQventuer GmbH, Karmeliterplatz 4, 8010 Graz, aimed at developing a joint collaboration for a new technology for the mixing and extrusion of polyamide 6 polymers to be used in skateboards but also, potentially, in other products that undergo high levels of stress. The project calls for an increase in capital to be subscribed jointly by Aquafil and eQventure in 2024 with a maximum investment by Aquafil of Euro 500 thousand.

11.4 Disclosure as per Article 1, paragraph 125, of Law No. 124 of August 4, 2017

With regards to that required by Article 1, paragraph 125 of Law 124/17, the Company recorded the following in 2023:

Pag. 134 di 246

i)Euro 2,575 thousand for the Industry 4.0 investment tax credit based on investments made beginning in 2020 that are eligible for the tax incentives defined by Article 1 of Italian law 232 of December 11, 2026, et seq. The amount was recognised among “Other non-current and current receivables”, and the portion recognised through profit or loss totalled Euro 321 thousand related to the subsidiary Tessilquattro S.p.A.;

ii)Euro 2,518 thousand for the energy and gas tax credit subsidy granted during the year for electricity-intensive and natural gas-intensive companies that have met the requirements under the regulations (Decree Law No. 4 of 01/27/2022) concerning Aquafil SpA and Tessilquattro SpA;

iii)Euro 411 thousand relating to training grants for Aquafil SpA;

iv)Euro 193 thousand for the tax credit related to the purchase of capital goods by Aquafil SpA and Tessilquattro SpA and for the contribution recognized by the EU for the "Cisuflo" project (portion in the year of the grant) in Aquafil SpA .

v)Euro 224 thousand related to the grant recognised by the EU for the "Effective" research project (portion in the year of the grant) in Aquafil SpA;

vi)Euro 92 thousand related to the tax credit accrued on the research and development expenses incurred in 2023 and determined as per Article 1, paragraph 35 of Law No. 190 of December 23, 2014 in Aquafil SpA;

vii)Euro 84 thousand relating to the sale of the external electricity distribution network produced by the photovoltaic plants in Aquafil SpA;

viii)Euro 114 thousand relating to the transfer of the superbonus tax credit by Aquafil S.p.A.

Attachment 1 - Disclosure pursuant to Article 149 of the Consob Issuer’s Regulation

The following table, drawn up pursuant to Article 149-duodecies of the Consob Issuers’ Regulation, highlights the fees charged in the year 2023 for auditing and non-auditing services rendered by this appointed independent audit firm and by the companies in its network.

Company providing service

Recipient of service

Type of services

Fees 2023

PwC SpA

Aquafil SpA

Audit separate financial statements

147,370

Pag. 135 di 246

Audit consolidated financial statements

46,402

ESEF financial statement audit

10,000

PwC SpA

Italian subsidiary companies

Audit separate financial statements and Group Reporting Package

28,909

PwC (1)

Foreign subsidiaries

Audit separate financial statements and Group Reporting Package

113,600

PwC SpA

Aquafil SpA

Limited Audit of the 2023 consolidated half-year report

33,946

PwC SpA

Italian subsidiary companies

Limited Audit 2023 half-year Group Reporting Package

12,400

PwC (1)

Foreign subsidiaries

Limited Audit 2023 half-year Group Reporting Package

58,312

Total Audit services provided in 2023 to the Aquafil Group by Worldwide Audit firm

450,939

PwC SpA

Aquafil SpA

Limited Audit of Consolidated Non-Financial Report 2023

79,000

PwC SpA

Aquafil SpA

Audit of the statement of the 2022 R&D costs for the purposes of the tax credit Law 145/18

4,800

PwC (1)

Foreign subsidiaries

Other assistance services allowed

6,325

Total other audit services provided in 2023 to Aquafil Group by Audit Firm

90,125

(1) Other companies belonging to the same PwC SpA network

Arco, March 14, 2024

The Chairperson of the Board of DirectorsThe Executive Officer

Ms. Chiara Mio Mr. Roberto Carlo Luigi Bobbio

Pag. 136 di 246

Statutory

Financial Statements

2023

Pag. 139 di 246

BALANCE SHEET AND FINANCIAL POSITION

(in Euro)

Notes

At December 31, 2023

At December 31, 2022

Intangible assets

7.1

10,277,233

12,705,447

Property, plant & equipment

7.2

36,084,641

37,623,832

Financial assets

7.3

369,411,676

348,114,481

of which related parties

35,437,348

40,084,048

Other assets

7.4

303,660

Deferred tax assets

7.5

6,720,549

2,172,164

Total non-current assets

422,494,099

400,919,583

Inventories

7.6

56,851,144

65,403,742

Trade receivables

7.7

79,395,216

115,824,894

of which related parties

76,631,964

115,597,486

Financial assets

7.3

1,973,527

5,012,834

of which related parties

950,000

Tax receivables

7.8

2,470

Other assets

7.9

9,463,274

7,361,179

of which related parties

5,854,212

247,224

Cash and cash equivalents

7.10

72,745,574

52,712,510

Assets held-for-sale

7.11

702,543

1,755,493

Total current assets

221,131,277

248,073,121

Total Assets

643,625,377

648,992,704

Share capital

7.12

49,722,417

Reserves

7.12

58,350,631

55,026,253

Profit/(loss) for the year

7.12

(5,641,004)

15,930,426

Total shareholders' equity

102,432,044

120,679,096

Employee benefits

7.13

1,579,902

1,804,990

Financial liabilities

7.14

297,788,034

281,537,972

of which related parties

15,250,937

10,626,608

Provisions for risks and charges

7.15

1,315,278

1,082,731

Deferred tax liabilities

7.5

12,842

13,013

Other liabilities

7.16

3,347,475

6,032,549

Total non-current liabilities

304,043,531

290,471,256

Financial liabilities

7.14

93,865,349

75,125,790

of which related parties

284,746

814,339

Current tax payables

7.18

73,016

Trade payables

7.17

128,274,663

146,839,867

of which related parties

62,229,529

70,824,101

Other liabilities

7.16

15,009,790

15,803,680

of which related parties

3,946,063

2,829,855

Total current liabilities

237,149,802

237,842,353

Total shareholders’ equity and liabilities

643,625,377

648,992,704

Pag. 140 di 246

INCOME STATEMENT

(in Euro)

Notes

2023

of which non-recurring

2022

of which non-recurring

Revenues

8.1

518,444,406

694,343,333

of which related parties

219,964,774

332,084,678

Other revenues and income

8.2

2,551,344

407

7,099,124

39,298

of which related parties

Total revenues and other revenues and income

520,995,750

407

701,442,456

39,298

Cost of raw materials and changes to inventories

8.3

(440,724,131)

(134,171)

(554,993,034)

of which related parties

(342,415,320)

(370,480,079)

Service costs and rents, leases and similar costs

8.4

(46,182,810)

(771,976)

(75,189,985)

(527,595)

of which related parties

(1,137,654)

(2,401,474)

Labour costs

8.5

(36,882,565)

(1,135,224)

(37,732,601)

(178,933)

of which related parties

94,772

153,108

Other costs and operating charges

8.6

(695,354)

(100,600)

(883,657)

(254,674)

of which related parties

(26,000)

Depreciation and amortisation

8.7

(10,466,187)

(10,710,713)

(Provisions & write-downs)/ releases

8.8

772,560

(359,777)

Increase in internal work capitalised

8.9

1,564,817

1,412,246

Operating Profit/(loss)

(11,617,921)

(2,141,564)

22,984,936

(921,905)

Financial Income/(Charges) from Investments

8.10

16,486,504

183,028

of which related parties

16,486,346

182,659

Financial income

8.11

2,188,118

5,219,302

of which related parties

1,743,879

632,636

Financial charges

8.12

(19,051,896)

(9,312,339)

of which related parties

(1,859,346)

(2,008,626)

Exchange gains/(losses)

8.13

(347,187)

480,933

Profit/(loss) before taxes

(12,342,381)

(2,141,564)

19,555,859

(921,905)

Income taxes

8.14

6,701,377

(3,625,433)

Net profit/(loss)

(5,641,004)

(2,141,564)

15,930,426

(921,905)

COMPREHENSIVE INCOME STATEMENT

(in Euro)

Note

December 2023

December 2022

Profit/(loss) for the year

(5,641,004)

15,930,426

Actuarial gains/(losses)

(21,806)

227,999

Tax effect on actuarial gains/(losses)

5,233

(54,720)

Other income items not to be reversed to income statement in subsequent periods

(16,572)

173,279

Currency difference from conversion of financial statements in currencies other than the Euro

Other income items to be reversed to income statement in subsequent periods

Total comprehensive income

7.12

(5,657,577)

16,103,705

Pag. 141 di 246

CASH FLOW STATEMENT

(in Euro)

Note

At December 31, 2023

At December 31, 2022

Operating activities

Profit/(loss) for the year

(5,641,004)

15,930,426

Income taxes

8.14

(6,701,377)

3,625,433

Investment income and charges

8.10

(16,486,504)

(183,028)

of which related parties:

(16,486,346)

(182,659)

Financial income

8.11

(2,188,118)

(5,219,302)

of which related parties:

(1,743,879)

(632,636)

Financial charges

8.12

19,051,896

9,312,339

of which related parties:

1,859,346

2,008,626

Exchange gains/(losses)

8.13

347,187

(480,933)

Asset disposal (gains)/losses

(136,642)

(289,155)

Provisions & write-downs/(Releases)

8.8

(772,560)

359,777

Amortisation, depreciation and write-downs of tangible and intangible assets

8.7

10,466,187

10,710,713

Cash flow from operating activities before working capital changes

(2,060,935)

33,766,271

Decrease/(Increase) in inventories

7.6

8,552,598

(11,759,239)

Increase/(decrease) in trade payables

7.17

(18,565,204)

13,763,149

of which related parties:

(8,594,572)

18,535,453

Decrease/(Increase) in trade receivables

7.7

37,211,420

(62,410,668)

of which related parties:

38,965,522

(67,186,393)

Changes to assets and liabilities

(2,816,313)

(5,189,051)

of which related parties:

(4,490,779)

4,566,662

Net paid financial charges

(14,155,156)

(8,598,997)

Income taxes paid

(68,277)

(1,132,058)

Dividends received

17,043,497

183,028

Utilisation of provisions

(676,016)

(462,698)

Cash flow generated/(absorbed) from operating activities (A)

24,465,612

(41,840,264)

Investing activities

Investments in tangible assets

7.2

(6,580,073)

(6,811,367)

Disposal of tangible assets

7.2

2,632,894

863,247

Investments in intangible assets

7.1

(1,097,268)

(2,182,808)

Disposal of intangible assets

7.1

132,440

Investments in financial assets

7.3

(26,502,681)

(50,000)

Disposal of financial assets

7.3

Cash flow generated by investing activities (B)

(31,547,129)

(8,048,488)

Financing activities

Drawdown non-current bank loans and borrowings

100,000,000

94,000,000

Repayment non-current bank loans and borrowings

(71,064,734)

(52,285,013)

Net changes in current and non-current financial assets and liabilities (including IFRS 16)

10,768,792

(7,295,557)

of which related parties:

9,552,679

(699,325)

Distribution of dividends

7.12

(11,991,953)

(6,046,158)

of which related parties:

(7,168,974)

(3,576,364)

Acquisition of minority interests

Acquisition of treasury shares

(597,523)

(5,469,675)

Cash flow from generated/(absorbed) by financing activities (C)

27,114,581

22,903,596

Net cash flow in the year (A)+(B)+(C)

20,033,064

(26,985,155)

Opening cash and cash equivalents

7.10

52,712,510

79,697,665

Pag. 142 di 246

Closing cash and cash equivalents

7.10

72,745,574

52,712,510

Pag. 143 di 246

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(in Euro)

Share capital

Legal reserve

Share premium reserve

Negative reserve for treasury shares in portfolio

Non-distributable reserve for listing costs

FTA Reserve

IAS 19 Reserve

Other reserves

Retained earnings

Total reserves

Net Result

Total Shareholders’ Equity

January 1, 2022

49,722,417

699,173

19,975,348

(2,544,855)

(3,287,529)

(2,156,097)

(354,728)

22,484,182

20,400,033

55,215,527

11,153,279

116,091,224

Share capital increase

Allocation of prior-year result

557,664

10,595,615

11,153,279

(11,153,279)

Distribution of dividends

(6,046,158)

Treasury share purchases

(5,469,675)

Profit/(loss) for they year

15,930,426

Actuarial gains/(losses) employee benefits

173,279

Comprehensive income

173,279

15,930,426

16,103,705

At December 31, 2022

49,722,417

1,256,837

19,975,348

(8,014,531)

(3,287,529)

(2,156,097)

(181,449)

16,438,024

30,995,648

55,026,253

15,930,426

120,679,096

Share capital increase

Other changes

30,995,648

(30,995,648)

Allocation of prior-year result

796,521

15,133,905

15,930,426

(15,930,426)

Distribution of dividends

(11,991,953)

Treasury share purchases

(597,523)

Net Result

(5,641,004)

Actuarial gains/(losses) employee benefits

(16,572)

Comprehensive income

(16,572)

(5,641,004)

(5,657,577)

At December 31, 2023

49,722,417

2,053,359

19,975,348

(8,612,054)

(3,287,529)

(2,156,097)

(198,021)

50,575,624

58,350,631

(5,641,004)

102,432,044

Pag. 144 di 246

NOTES TO THE FINANCIAL STATEMENTS

1.GENERAL INFORMATION

1.1Introduction

Aquafil S.p.A. (“Aquafil”, “Company” or “Parent company” and, together with its subsidiaries, “Group” or “Aquafil Group”) is a joint stock company listed on the Italian Stock Exchange, Euronext STAR Segment since December 4, 2017, resulting from the business combination through merger by incorporation of Aquafil S.p.A. (pre-merger), founded in 1969 in Arco (TN) and renowned for the

Pag. 145 di 246

production and distribution of fibres and polymers, principally polyamide, into Space 3 S.p.A., as an Italian registered Special Purpose Acquisition Company (SPAC), with efficacy from December 4, 2017.

The majority shareholder of Aquafil S.p.A. is Aquafin Holding S.p.A., with registered office in Via Leone XIII No. 14, 20145 Milan, Italy, which however does not exercise management and co-ordination activities. The ultimate parent company, which draws up specific consolidated financial statements, is GB&P S.r.l. with registered office in Via Leone XIII No. 14, 20145 Milan, Italy.

Aquafil produces and sells fibres and polymers, principally polyamide 6, on a global scale through the:

(i)BCF Product Line (carpet fibres), or synthetic yarns mainly intended for the textile flooring sector and used in “contract” segments (hotels, airports, offices, etc.), residential buildings and the automotive market;

(ii)NTF Product Line (clothing fibres), or synthetic yarns mainly intended for the clothing sector (sportswear, classic, technical or specialist apparel);

(iii)Polymers Product Line, or plastic raw materials, mainly targeting the engineering plastics sector for subsequent use in the moulding industry.

The Company’s products are also sold on the market under the ECONYL® brand, which offers the Company’s products obtained by regenerating industrial waste and end-of-life products.

The Company enjoys a consolidated presence in Europe, the United States and Asia.

1.2 Financial Statement Presentation

These financial statements were prepared for the year ended December 31, 2023 in accordance with EU Regulation 1606/2002 of July 19, 2022 and Article 9 of Legislative Decree No. 38 of February

Pag. 146 di 246

28, 2005, in compliance with International Financial Reporting Standards, issued by the International Accounting Standards Board and endorsed by the European Union (“IFRS”).

The Financial Statements were approved by the Board of Directors of the company on March 14, 2024, and audited by PricewaterhouseCoopers S.p.A., statutory auditors of the company.

1.3 Non-Financial Report

Aquafil S.p.A., as an Entity of Significant Public Interest (“EIPR”) and the parent company of the Aquafil Group, prepares and presents, from financial year 2017, the “Consolidated Non-Financial Report”, as per Article 5 “Placement of the report and communication” as per Legislative Decree 254/2016 concerning the communication of non-financial and diversity disclosure by certain large enterprises and groups. Therefore, Aquafil, as per Article 6 exemptions and special cases, is not subject to the obligation to prepare an individual non-financial report relating to only the separate financial statements.

2.ACCOUNTING POLICIES AND MEASUREMENT CRITERIA

The main accounting policies adopted in the preparation of the Separate Financial Statements are reported below. These accounting policies were applied in line with the year 2022 presented for comparative purposes and those applied at December 31, 2023.

2.1Basis of preparation

As previously indicated, these financial statements were prepared in accordance with IFRS, i.e. all “International Financial Reporting Standards”, all “International Accounting Standards” (“IAS”), all interpretations of the International Reporting Interpretations Committee (“IFRIC”), previously called

Pag. 147 di 246

the Standards Interpretations Committee (“SIC”) which, at the approval date of the Financial Statements, were endorsed by the European Union pursuant to EU Regulation No. 1606/2002 of the European Parliament and European Council of July 19, 2002.

These financial statements were prepared:

•on a going-concern basis of the company, as the directors verified the absence of financial, operating or other indicators which may suggest difficulties with regards to the company’s capacity to meet its obligations in the foreseeable future and in particular in the next 12 months.

•under the historical cost convention, except for the measurement of financial assets and liabilities where the obligatory application of the fair value criterion is required.

2.2Form and content of the financial statements

The financial statements of Aquafil S.p.A. have been prepared in euro. The financial statements and the relative classification criteria adopted by the company, within the options permitted by IAS 1 “Presentation of financial statements” (“IAS 1”) are illustrated below:

•the balance sheet is presented with separation between “current and non-current” assets and liabilities;

•the income statement was prepared separately from the comprehensive income statement, and was prepared classifying operating costs by expense type;

•the cash flow statement prepared in accordance with the “indirect method”.

Pag. 148 di 246

The financial statements utilised are those which best represent the result, equity and financial position of the company.

Subsidiaries

A party controls an entity when it is: (i) exposed, or has the right to participate, in the relative variable economic returns and (ii) able to exercise its decisional power on the activities relating to the entity in order to influence these returns. The existence of control is verified where events or circumstances indicate an alteration to one of the above-mentioned factors determining control. The year-end of the subsidiary companies coincides with that of Aquafil S.p.A..

Associated Companies

Associated companies are companies in which the Company has a significant influence, which is presumed to exist when the percentage held is between 20% and 50% of the voting rights.

Business combinations

The company did not undertake in the year any business combinations as defined by IFRS 3.

Pag. 149 di 246

Impairment test

The impairment test assesses whether there exist any indications that an asset may have incurred a reduction in value. For indefinite useful life intangible assets an assessment should be made at least annually that their recoverable value is at least equal to the book value and, when considered necessary, or rather in the presence of trigger events (IAS 16 paragraph 9), the impairment test must be undertaken more frequently.

In assessing the recoverable value of its property, plant and equipment, investment property and intangible assets, the Group generally applies the criterion of the value in use, where required, i.e. the presence of trigger events.

These forecasts cover the period of the next three years; consequently, the cash flows relating to the subsequent years are determined on the basis of a growth rate which does not exceed the average growth rate for the sector and the country.

Where the book value of an asset is higher that its recoverable value a loss in value is recognised which is recorded in the income statement under “Amortisation, depreciation and write-downs”.

When the reasons for the write-down no longer exist, the carrying value of the asset is restated through the income statement, in the account “Amortisation, depreciation & write-downs”, up to the value at which the asset would be recorded if no write-down had taken place and amortisation or depreciation had been recorded.

Translation of accounts in foreign currencies

Pag. 150 di 246

Transactions in currencies other than the Euro are recognised at the exchange rate at the date of the transaction. Assets and liabilities denominated in currencies other than the euro are subsequently adjusted to the exchange rate at the reporting date. Exchange differences are recognised to the income statement under “Exchange gains and losses”.

Non-monetary assets and liabilities denominated in currencies other than the euro are recorded at historical cost, utilising the exchange rate on the initial recording of the transaction.

The primary exchange rates adopted for the translation of the monetary assets and liabilities in foreign currencies with the euro are shown in the table below:

Rate at December 31, 2023

Average

2023 average

Rate at December 31, 2022

Average

2022 average

US Dollar

1.11

1.08

1.07

1.05

Croatian Kuna

7.54

7.53

Chinese Yuan

7.85

7.66

7.36

7.08

Turkish Lira

32.65

25.76

19.96

17.41

Baht

37.97

37.63

36.84

36.86

UK Sterling

0.87

0.89

0.85

Australian Dollar

1.63

1.57

1.52

Japanese Yen

156.33

151.99

140.66

138.03

Chilean Peso

977.07

908.20

913.82

917.86

Swiss Franc

0.93

0.97

2.3 Accounting standards

The most significant accounting policies adopted in the preparation of the Financial Statements are reported below.

Classifications of current and non-current assets and liabilities

Pag. 151 di 246

The company classifies an asset as current when:

•it is held for sale or consumption, in the normal operating cycle;

•it is principally held for trading;

•it is expected to be realised within 12 months from the reporting date; or

•it comprises cash or cash equivalents whose use is not restricted or restrictions such as to impede its use for at least 12 months from the reporting date.

All assets that do not meet the conditions listed above are classified as non-current.

The Company classifies a liability as current when:

•it is expected to be settled within the normal operating cycle;

•it is principally held for trading;

•it must be settled within twelve months of year-end; or

•the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

All the liabilities which do not satisfy the above-mentioned conditions are classified as non-current.

Intangible assets

An intangible asset is an asset without physical substance, identifiable and capable of generating future economic benefits. The requisite of identifiability is normally met when an intangible asset is:

•attributable to a legal or contractual right; or

•separable, that is, it can be sold, transferred, leased or exchanged independently.

Pag. 152 di 246

Control over an intangible asset consists of the right to take advantage of future economic benefits arising from the asset and the possibility of limiting its access to others.

An intangible asset, generated during a project’s development phase, which complies with the definition of development on the basis of IAS 38, is recognised as an asset if:

•the cost can be measured reliably;

•the product/process is technically feasible;

•it is likely that the company will obtain the future economic benefits that are attributable to the asset developed, and

•where the company intends to complete the project’s development and has sufficient resources to do so.

Intangible assets with finite useful lives

Intangible assets with definite useful lives are recognised as cost, as previously described, net of accumulated amortisation and any impairment.

The estimated useful life of the various categories of intangible assets is as follows:

Estimated useful life

Concessions, licences & trademarks

10 years

Development costs

5 years

Industrial patents & intellectual property rights

10 years

Other intangible assets

Duration of contract

Pag. 153 di 246

Property, plant & equipment

The estimated useful life of the main categories of property, plant and equipment is as follows:

Estimated useful life

Buildings and light constructions

10 - 17 - 33 years

General plant and machinery

7 - 8 - 10 - 13 years

Industrial and commercial equipment

2 - 4 - 8 years

Other assets

4 - 5 - 8 years

Right-of-Use

Duration of contract

A tangible fixed asset is eliminated from the financial statements when the asset is sold or when no expected economic benefits exist from its use or disposal. Any gains or losses (calculated as the

Pag. 154 di 246

difference between net income from sales and the net book value of the asset sold) are recognised in the income statement in the year of disposal.

Leased assets

Companies that operate as lessee therefore recognise in their financial statements, at the effective date of the lease, an asset representing the right to use of the asset (defined as the “Right-of-Use”) and a liability, attributable to the obligation to make the payments provided for in the contract. The lessee should subsequently recognise the interest concerning the lease liability separate from the depreciation of the right-of-use assets. IFRS 16 also requires lessees to restate the amounts of the lease liability on the occurrence of certain events (e.g. a change to the duration of the lease, a change to the value of the future payments due to a change in an index or rate utilised to determine these payments). In general, the restatement of the amount of the lease liability implies an adjustment also to the right-of-use asset.

Pag. 155 di 246

Impairment of intangible and tangible assets

Intangible and tangible assets with definite useful life

Where these indicators exist, an estimate of the recoverable value of the above-mentioned assets is made, recording any write-down compared to the relative book value in the income statement. The recoverable value of an asset is the higher between the fair value, less costs to sell, and its value in use, determined discounting the estimated future cash flows for this asset, including, where significant and reasonably determinable, those deriving from the sale at the end of the relative useful life, net of any transaction costs. In defining the value in use, the expected future cash flows are discounted utilising a pre-tax rate that reflects the current market assessment of the time value of money, and the specific risks of the asset. For an asset that does not generate independent cash flows, the recoverable value is determined in relation to the cash-generating unit to which the asset belongs.

A loss in value is recognised in the income statement when the carrying value of the asset, or of the relative CGU to which it is allocated, is higher than its recoverable value. The loss in value of CGU`s are firstly attributed to the reduction in the carrying value of any goodwill allocated and, thereafter, to a reduction of other assets, in proportion to their carrying value and in the limit of the relative recoverable value. When the reasons for the write-down no longer exist, the book value of the asset is restated through the income statement, up to the value at which the asset would be recorded if no write-down had taken place and amortisation or depreciation had been recorded.

Pag. 156 di 246

Equity investments

In subsidiaries

Investments in subsidiaries are recorded at acquisition or subscription cost.

Where there is an indication of a loss in value, the recoverability of the recognition value is verified through a comparison between the carrying amount and the higher between the value in use, determined discounting the future cash flows of the investment and, where possible, the hypothetical sales value determined based on recent transactions or market multiples.

The share of the loss exceeding the carrying amount is recorded in a specific provision for the amount that the company considers there exists legal or implied obligations to cover the losses or in any case within the limits of the book net equity. Where there is a subsequent improvement in the performance of the investee subject to the write-down such as to consider the reasons for the impairment no longer existing, the investments are revalued within the limits of the write-downs recognised in previous years. The dividends from subsidiaries are recorded in the income statement in the year in which they are approved.

In associates

Associated companies are companies in which the Company has a significant influence, which is presumed to exist when the percentage held is between 20% and 50% of the voting rights. Associated companies are measured under the equity method and are initially recorded at cost. The equity method is as described below:

•the profits and losses pertaining to the Company are recognised when the significant influence begins and until the significant influence ceases to exist. In the case where, due to losses, the company valued under this method indicates a negative net equity, the carrying value of the investment is written down and any excess pertaining to the Company, where this latter is

Pag. 157 di 246

committed to comply with legal or implicit obligations of the investee, or in any case to cover the losses, is recorded in a specific provision; the equity changes of the companies valued under the equity method, not recorded through the income statement, are recorded directly in the comprehensive income statement;

•the gains and losses not realised, generated on transactions between the Company/Subsidiaries and investments measured under the equity method are eliminated based on the share pertaining to the investee, except for losses, when they represent a reduction in value of the underlying asset, and dividends which are fully eliminated.

The transfer of shareholdings resulting in the loss of joint control or significant influence over the investee company determines the recognition in the comprehensive income statement:

•of any gain/loss calculated as the difference between the amount received and the corresponding fraction of the carrying amount transferred;

•of the effect of the remeasurement of any residual investment in line with the relative fair value;

•of any values recorded under other comprehensive items related to the investee for which reclassification to the comprehensive income statement is envisaged.

Pag. 158 di 246

Securities other than equity investments

Securities other than equity investments, included under “Financial assets”, are held in portfolio until maturity. They are recognised at acquisition cost (with reference to the “trading date”) including transaction costs.

Loans, receivables and financial assets held-to-maturity

The financial assets are measured based on IFRS 9.

Company assesses at each reporting date whether a financial asset or a group of financial assets have incurred a loss in value.

Impairments of financial assets

At the reporting date, all the financial assets, other than those measured at fair value through the comprehensive income statement, are analysed in order to verify whether there is evidence of a loss in value. An impairment loss is recognised if, and only if, this evidence exists as a result of one or more events that have an impact on the asset’s expected future cash flows, occurring after its initial recognition.

In the valuation account is also taken of future economic conditions.

Pag. 159 di 246

the financial assets are restated up to the value deriving from the application of the amortised cost criterion.

Inventories

Inventories are recorded at the lower of purchase or production cost and realisable value represented by the amount that the Company expects to obtain from their sale in the normal course of operations of the assets, net of accessory costs. The cost of inventories is calculated using the weighted average cost method. The value of finished or semi-finished product inventories includes direct or indirect processing costs. To determine the weighted average cost of production or processing, the Company considers the weighted average cost of the raw material and the direct and indirect production costs, generally taken as a percentage of direct costs.

The value of inventories was recorded net of any impairment provisions.

Trade and other receivables (current and non-current)

Trade receivables and other current and non-current receivable are considered financial instruments, principally relating to customer receivables, non-derivative, not listed on an active market, from which fixed or determinable payments are expected. Trade receivables and other receivables are classified in the balance sheet under current assets, except for amounts due beyond 12 months from the reporting date, which are classified as non-current. These financial assets are recorded in the balance sheet when the company becomes part of the related contracts and are derecognised when the right to receive the cash flow is transferred together with all the risks and benefits associated with the asset sold.

Pag. 160 di 246

Impairments on receivables are recognised in the income statement when there is objective evidence that the Company will not be able to recover the credit on the basis of contractual conditions.

The write-down amount is measured as the difference between the asset’s carrying amount and the present value of expected future cash flows.

The value of receivables is shown in the balance sheet net of the corresponding doubtful debt provision.

Cash and cash equivalents

Employee benefits

For the defined benefit plans, which include post-employment benefit provisions due to employees pursuant to Article 2120 of the Italian Civil Code, the amount to be paid to employees is quantifiable only after the termination of the employment service period, and is related to one or more factors such as age, years of service and remuneration. Therefore, the relative charge is recorded in the income statement based on actuarial calculations. The liability recorded in the accounts for defined benefit plans corresponds to the present value of the obligation at the reporting date. The obligations for the defined benefit plans are determined annually by an independent actuary utilising the projected unit credit method. The present value of the defined benefit plan is determined discounting the future cash flows at an interest rate equal to the obligations (high-quality corporate) issued in euro and takes into account the duration of the relative pension plan.

Pag. 161 di 246

The actuarial gains and losses deriving from these adjustments and the changes in the actuarial assumptions are recognised in the comprehensive income statement.

From January 1, 2007, the Finance Act and relative decrees enacted introduced important amendments in relation to post-employment benefits, among which was the choice given to the employee to determine where the benefit matured in the period is invested. In particular, the new post-employment benefits can be utilised by the employee for their own chosen pension scheme or they may choose to leave the amount in the company. In the case of allocation to external pension funds, the Company is only liable to pay a defined contribution to the selected fund and as from that date, the newly matured portion are in the nature of defined contribution plans and are therefore not subject to actuarial valuation.

Trade and other payables (current and non-current)

Elimination of financial assets and liabilities

Financial assets (or, where applicable, part of a financial asset or part of a group of similar financial assets) are derecognised from the financial statements when:

•the right to receive the financial cash flows of the asset terminate;

•the company retains the contractual right to receive the cash flows from the asset, but assumes a contractual obligation to pay the cash flows fully and without delay to a third party;

Pag. 162 di 246

•the company has transferred its right to receive cash flows from the asset and (a) has transferred substantially all of the risks and rewards of ownership of the financial asset or (b) has not transferred or retained substantially all of the risks and rewards of the asset, but has transferred control over same.

A financial liability is derecognised from the financial statements when the underlying liability is settled, cancelled or fulfilled.

Derivative financial instruments

Derivative financial instruments are only used by Aquafil for the hedging of financial risks related to interest rate fluctuations on bank debt.

A derivative is a financial instrument or other contract:

•that requires a zero initial net investment, or lower than what would be required for contracts with a similar response to changes in market conditions;

•which is settled at a future date.

The financial instruments are undertaken to hedge against the interest rate risk. In accordance with IAS 39, which remains applicable optionally with respect to IFRS 9 in the case of the hedging of interest rate exposure, derivative financial instruments are accounted for in accordance with the procedures established for hedge accounting only when:

•the hedging instrument is formally designated and documented at the start of hedging;

•the hedge is expected to be highly effective;

•such efficacy can be reliably measured;

•the hedge is highly effective during the various accounting periods for which it is designated.

Pag. 163 di 246

It should be noted that the derivative instruments currently in place (IRS - Interest Rate Swaps), although subscribed for hedging purposes with regard to changes in interest rates, have been treated, for accounting purposes and consistently with the past, as non-hedging instruments (and therefore the relative fair value is recognised in the income statement), as it is very complex to prepare the mandatory hedging relationship.

Measurement of the fair value of financial instruments

Fair value measurement is based on the assumption that the sale of the asset or transfer of the liability is undertaken on the principal market, or rather the market in which the largest volume and levels of transaction take place for the asset or liability. In the absence of a principal market, it is assumed that the transaction takes place on the most advantageous market to which the company has access, or rather the market which would maximise the results of the sales transaction of the asset or minimise the amount to be paid for the transfer of the liability.

In the fair value measurement, the company takes into account the specific characteristics of the asset or the liability, in particular, for the non-financial assets, the capacity of a market operator to generate economic benefits utilising the asset to its maximum and best use or by selling to another market operator that would utilise the asset to its maximum or best use. The fair value measurement of assets and liabilities utilises appropriate techniques for the circumstances and for which sufficient data is available, maximising the use of observable inputs.

Pag. 164 di 246

IFRS 13 identifies the following fair value hierarchy which reflect the importance of the inputs used in the relative measurement:

•level 1 Quoted Price (active market): data used in valuations are represented by prices quoted on markets in which identical assets and liabilities are traded with those being valued;

•level 2 Use of Observable Market Parameters (for example, for derivatives, the exchange rates recorded by the Bank of Italy, market interest rate curves, volatility provided by qualified providers, credit spreads calculated on the basis of CDS’, etc.) other than level 1 quoted prices;

•level 3 Use of Non-Observable Market Parameters (internal assumptions, for example, financial flows, risk-adjusted spreads, etc.).

Warrants

The company has issued warrants, that is, financial instruments that give the holder the right to purchase (call warrants) a determined quantity of ordinary shares (underlying) at a predefined price (strike-price) within a set deadline. Two types of warrants are issued: "Market Warrants" which were also listed, and non-listed "Sponsor Warrants". Listed "Market warrants" were cancelled in 2022 as having expired.

Warrants issued by the company have the characteristics to be considered as equity instruments since both instruments contain a pre-set execution value (defined as the "fixed for fixed criteria").

Pag. 165 di 246

Provisions for risks and charges

•the existence of a present obligation, legal or implicit, deriving from a past event is probable;

•it is probable that compliance with the obligation will result in a charge;

•the amount of the obligation can be estimated reliably.

Revenues and costs

Revenues from the sale of goods and services as well as the purchase costs of goods and services are recognised on the transfer of control of the relative goods or completion of the service.

Pag. 166 di 246

Revenues are recognised in accordance with IFRS 15 and therefore as per the following 5 steps:

6)identification of the contract with the customer. The standard contains specific provisions to assess whether two or more contracts should be combined and to identify the accounting implications of any contractual amendments;

7)identification of the contractual obligations contained in the contract;

8)calculation of the transaction price, which should be made taking into consideration, among others, the following elements: any amounts paid on behalf of third parties, which must be excluded from the consideration, variable price components (such as performance bonuses, penalties, discounts, reimbursements, incentives, etc...) and any financial component, present where the payment terms granted to the customer contain a significant extension period;

9)allocation of the transaction price to the contractual obligations, on the basis of the stand-alone sales price of each good or service; separately;

10)recognition of the revenue, when (or if) each contractual obligation is satisfied through the transfer of the goods or service, which occurs when the customer obtains the control and therefore has the capacity to decide upon and/or control its use and substantially obtain all the benefits. Control may be transferred at a specific point in time or over time.

The analysis undertaken indicated that the obligations arising for the Parent Company to its clients mainly concern the production and supply of finished products according to the terms and conditions requested, and in particular:

•payment deadlines are on average between in line with generally applied market averages. “Cash discounts” are contractually granted in the case of early settlement and were recognised as a direct reduction in revenues. No payment deferments are granted which could be considered as qualifying as a loan;

•the finished product is sold without the granting of warranty periods and/or without return and/or suspension of ownership clauses. Any returns and reimbursements are agreed

Pag. 167 di 246

among the parties on a case by case basis following critical analysis of the reasons which may have resulted in any non-compliance issues.

It is therefore considered that:

(iv)the moment of transfer of control to clients of their products coincides with the transfer of the associated risks and benefits, as contractually defined by the delivery terms applied and which are in line with those generally accepted within the sector;

(v)the consideration does not include any financial component, with the exception of the cash discounts which are recognised as a reduction in revenues, while the component of the transport service and insurance (applicable only with specific delivery terms) is however completed in the same period as the transfer of control of the goods and therefore accrues to the same period;

(vi)no contractual obligations are in place which suspend the transfer of control of the goods and therefore only the returns/reimbursements that may be agreed (concerning the goods sold in the year) may be recognised as a reduction of the relative revenues.

Financial income and charges

Financial income and charges are recognized in the income statement in the period in which they are earned or incurred according to IFRS 9.

Dividends

Pag. 168 di 246

The distribution of dividends to Aquafil S.p.A.’s shareholders is represented as a movement of shareholders’ equity and recorded as a liability in the financial year in which this distribution is approved by the Shareholders’ Meeting.

Income taxes

Current taxes are determined on the basis of estimated taxable income, in compliance with tax regulations applicable to companies and are recorded in the income statement under the item "Income taxes for the year", with the exception of those relating to items directly debited or credited to a shareholders’ equity reserve; in such cases, the relative tax effect is directly recognised in the respective shareholders’ equity reserves. The income statement shows the amount of income taxes for each item included in the "other components of the consolidated comprehensive income statement".

Deferred tax assets and liabilities are calculated in accordance with the balance sheet liability method. Deferred taxes are calculated on temporary differences between the values recorded in the financial statements and the corresponding values recognised for tax purposes. The deferred tax assets, including those relating to any tax losses carried forward, are recognised only for those amounts for which it is probable there will be future assessable income to recover the amounts. Tax assets and liabilities are offset, separately for current taxes and for deferred taxes, when the income tax is applied by the same fiscal authority, there is a legal right of compensation and the payment of the net balance is expected. Deferred tax assets and liabilities are calculated utilising the tax rates which are expected to be applied in the years when the temporary differences will be realised or settled, taking into account current tax regulations or substantially in force at the reporting date. Other taxes not related to income, such as indirect taxes and duties are included under “Other operating costs and charges”.

From the year 2018 Aquafil S.p.A. was included in the tax consolidation regime with the parent company Aquafin Holding S.p.A., interrupted in 2017 due to the merger by incorporation of Aquafil S.p.A. into Space 3 S.p.A.. The tax consolidation regime is also confirmed for the year 2023.

In addition, it should be noted that Article 12 of Legislative Decree No. 142 of 29/11/2018 defined the concept of "non-financial holding companies” ("Industrial Holdings"), for which, "the prevalent

Pag. 169 di 246

exercise of acquiring investments in parties other than financial intermediaries exists when, based on the figures of the last approved year-end financial statements, the total amount of investments in these parties and other equity elements undertaken between them, considered as a whole, is higher than 50 per cent of the total assets on the balance sheet", with effect from the year 2018.

Due to this amendment by Legislative Decree 142/2018, therefore, as of the year 2018, previously excluded companies fall under “Industrial Holding" and particularly those which have holdings but whose financial income predominantly comprises revenues from industrial activity.

The company which qualifies as an "Industrial Holding" must calculate the Irap taxable base in accordance with Article 6, paragraph 9 of the Irap Decree, that is, by adding to the normally determinable taxable base, 100% of the interest income and other financial income and subtracting 96% of the interest expense and similar charges; in addition, the increased rate envisaged for banks and other financial institutions must be applied to the value of production relevant for IRAP purposes. It should be noted that also for 2023, the IRAP rate for the industrial holding companies in the province of Trento, applicable to non-financial holding companies and similar entities pursuant to paragraph 9 of Article 6 of Legislative Decree No. 446/97 is 4.65%, and the benefits normally granted to industrial companies are not applied.

Assets and liabilities available for sale and discontinued operations

Non-current assets held-for-sale are not depreciated and are valued at the lower of the subscription value and their fair value, less selling costs.

Pag. 170 di 246

Non-current assets and current and non-current assets of disposal groups classified as held-for-sale constitute discontinued operations if, alternatively:

•they represent a significant autonomous branch of activity or a significant geographical area of activity; or

•is part of a disposal programme of an important independent activity or geographical area of activity;

•are a subsidiary acquired exclusively for the purpose of sale.

It should be noted that at December 31, 2023, Aquafil had only assets held-for-sale consisting of machinery and equipment and had no discontinued operations.

Use of accounting estimates

Numerous items in the financial statements are subject to estimates and while not all of these accounts are individually significant, they are significant on an overall basis.

Pag. 171 di 246

The accounting policies which require greater subjectivity by the directors in the preparation of the estimates and for which a change in the underlying conditions or the assumptions may have a significant impact on the financial results of the Company are briefly described below.

Impairments

The tangible and intangible assets with definite useful lives are verified to ascertain if there has been a loss in value, which is recorded by means of a write-down, when it is considered there will be difficulties in the recovery of the relative net book value through use. The verification of such difficulties requires the directors to make valuations based on the information available within the company and on the market, as well as from historical experience. In addition, when it is determined that there may be a potential reduction in value, the company determines this through using the most appropriate technical valuation methods available. The correct identification of the indicators of a potential reduction in value of tangible and intangible assets, as well as the estimates for their determination depends on factors which may vary over time, impacting upon the valuations and estimates made by the directors.

Amortisation & Depreciation

Pag. 172 di 246

Inventories

Inventories of products which are obsolescence or slow moving are periodically subject to valuation tests and written down when the recoverable value is lower than the carrying amount. The write-downs are made based on assumptions and estimates of management deriving from experience and historic results and compared with market values.

Doubtful debt provision

the recoverability of receivables is valued taking account of the non-payment risk, of aging of receivables and of the losses recorded in the past on similar receivables.

Provisions for risks and charges

Provisions for risks and charges are recorded to cover known or likely losses or liabilities, the timing and extent of which are not known with certainty at the reporting date.

Pag. 173 di 246

a rate which reflects market conditions, the change in the cost of money in the period and the specific risk related to the obligation. The increase in the value of the provision from changes in the cost of money in the period is recognised as a financial charges.

Possible risks that may result in a liability are disclosed in the notes on potential liabilities without any provision.

Deferred tax assets

2.4Accounting standards not yet applicable

The developments in the IFRS and the relative interpretations (IFRIC) applicable from periods beginning after January 1, 2023 are outlined below.

Document endorsed by the EU at November 30, 2023

Document title

Issue date

Effective entry date

Date approved

EU Regulation and publication date

Notes and references to this checklist

Lease Liabilities in a Sale and leaseback transaction (Amendments to IFRS 16)

September 2022

January 1, 2024

November 20, 2023

(EC) 2023/2579

See point

535

Pag. 174 di 246

November 21, 2023

Document title

Issue date

by the IASB

Effective date of the IASB document

Expected endorsement date

by EU

Standards

IFRS 14 Regulatory Deferral Accounts

January 2014

January 1, 2016

Postponed pending the new accounting standard on "rate-regulated activities".

Amendments

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)

September 2014

Postponed until the completion of the IASB project on the equity method

Endorsement process postponed pending the conclusion of the IASB project on the equity method

Classification of liabilities as current or non-current (Amendments to IAS 1) and Non current liabilities with covenants (Amendments to IAS 1)

January 2020

July 2020

October 2022

January 1, 2024

Q4 2023

Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) IFRS 9)

May 2023

January 1, 2024

TBD

Lack of Exchangeability (Amendment to IAS 21)

August 2023

January 1, 2025

TBD

Pag. 175 di 246

3.FINANCIAL RISK MANAGEMENT

The principal business risks identified, monitored and, as illustrated below, actively managed by the Company are as follows:

•market risk, deriving from fluctuations in exchange rates between the euro and the other currencies in which the Company operates, the interest rate and raw material prices;

•credit risk, deriving from the possibility of default by a counterparty;

•liquidity risk, deriving from insufficient financial resources to meet financial commitments.

The Company’s objective is to maintain a balanced management of its financial exposure over time to ensure a liability structure that is in equilibrium with the composition of assets and capable of ensuring the necessary operational flexibility through the use of liquidity generated by current operating activities and recourse to bank financing.

The ability to generate liquidity from ordinary operations and debt capacity allow the Company to adequately meet its operational requirements, the financing of operating working capital and investment capital, and to meet its financial obligations.

The Company’s financial policy and management of the relative financial risks are guided and monitored at central level. In particular, the central finance function is tasked with evaluating and approving forecast financial needs, monitoring the trend and, where necessary, implementing suitable corrective actions.

The following section provides qualitative and quantitative information on the impact of these risks on the company.

3.1 Market risk

Pag. 176 di 246

Currency risk

Exposure to the risk of exchange rate variations arises from the Company’s commercial activities which are also carried out in currencies other than the euro. Revenues and costs denominated in foreign currencies may be influenced by exchange rate fluctuations with an impact on trade margins (economic risk), just as trade and financial payables and receivables denominated in foreign currency may be affected by the conversion rates used, with an effect on the economic result (transaction risk).

The principal exchange rates the Company is exposed to are:

•EUR/USD, in relation to transactions carried out in US Dollars;

•EUR/GBP, in relation to transactions carried out in UK sterling.

The Company does not adopt specific policies to hedge exchange rate fluctuations, with the exception of contracts occasionally entered into due to the contingent requirements of its commercial activities. It should be noted that there is periodic massive offsetting between the values of purchase components in foreign currencies, mainly US dollars, and the values of sales in the same currency, which significantly mitigates the currency risk. The company is however exposed to a contained level of exchange rate risk stemming from operations as a portion of cash flows, sales and also purchases are denominated in the same currency (natural hedging).

Analysis of sensitivity of exchange rate risk

For the purposes of an exchange rate sensitivity analysis, balance sheet items as at December 31, 2023 (financial assets and liabilities), denominated in a currency other than the functional currency of the Company were identified. In assessing the potential effects arising from changes in exchange rates, inter-company payables and receivables in currencies other than the account currency were also taken into consideration.

Pag. 177 di 246

The table below highlights the results of the analysis:

+10%

-10%

(in thousands of Euro)

Book value

Exposition to currency risk

Gains/(Losses)

Financial assets

Cash and cash equivalents

72,746

12,813

(1,281)

1,281

Trade receivables (net credit notes)

79,395

13,422

(1,342)

1,342

of which related parties

76,632

14,812

(1,481)

1,481

Tax effect

630

(630)

Total financial assets

(1,994)

1,994

Financial liabilities

Trade payables

(128,275)

(13,069)

1,307

(1,307)

of which related parties

(62,230)

(9,691)

969

(969)

Tax effect

(314)

314

Total financial liabilities

993

(993)

Total

(1,001)

1,001

For comparability with the previous year, a similar analysis at December 31, 2022 is presented below:

+10%

-10%

(in thousands of Euro)

Book value

Exposition to currency risk

Gains/(Losses)

Financial assets

Cash and cash equivalents

52,713

7,473

(747)

747

Trade receivables (net credit notes)

115,825

23,091

(2,309)

2,309

of which related parties

115,597

24,840

(2,484)

2,484

Tax effect

734

(734)

Total financial assets

(2,323)

2,323

Financial liabilities

Trade payables

(146,840)

(16,224)

1,622

(1,622)

Pag. 178 di 246

of which related parties

(70,824)

(12,823)

1,282

(1,282)

Tax effect

(389)

389

Total financial liabilities

1,233

(1,233)

Total

(1,090)

1,090

Note: the plus sign indicates a higher profit and an increase in shareholders’ equity; the minus sign indicates a lower profit and a decrease in shareholders’ equity.

Interest rate risk

The Company uses external funding and utilises on-demand liquidity from market instruments. Changes in the interest rates impact on the cost and return of the various forms of loans and uses, with an effect therefore on the financial charges. The Company policy seeks to limit interest rate fluctuation risk through undertaking fixed or variable rate medium/long-term loans; hedging is carried out through the trading of derivative instruments (e.g. IRS - Interest Rate Swaps; IRC - Interest Rate Collar), utilised only for hedging purposes and not for speculative purposes. These contracts, although subscribed for hedging purposes relating to the financial exposure of the Company, were not treated as hedges for accounting purposes, given the technical complexity of the accounting demonstration of the hedging relationship and the relative effectiveness, and therefore with end-of-period Mark to Market (MTM) adjustment effects recognised directly in the income statement.

The following tables summarise the main information concerning hedging derivatives on interest rates as at December 31, 2023:

(Euro thousands)

Contract opening date

Contract maturity date

Notional value at signing date in foreign currency

Notional currency

Fair value at

December 31, 2023

IRS Intesa San Paolo

28/12/2021

31/12/2027

30,000

Euro

1,387

IRS Credit Agricole

29/05/2017

28/06/2024

10,000

Euro

IRS Intesa San Paolo

19/06/2018

31/01/2024

15,000

Euro

IRS Banca Popolare Milano

20/06/2018

30/06/2025

25,000

Euro

171

IRS Banca Popolare Milano

06/06/2019

30/06/2025

15,000

Euro

126

IRS Credit Agricole

09/08/2019

28/12/2025

10,000

Euro

148

IRS Intesa San Paolo

25/09/2019

31/12/2024

20,000

Euro

101

IRS Monte dei Paschi di Siena

30/09/2023

30/09/2026

20,000

Euro

(445)

Pag. 179 di 246

IRC BNL

05/07/2023

05/07/2028

10,000

Euro

(175)

Total

155,000

1,354

For comparability with the previous year, a similar analysis at December 31, 2022 is presented below:

(Euro thousands)

Contract opening date

Contract maturity date

Notional value at signing date in foreign currency

Notional currency

Fair value at

At December 31, 2022

IRS Intesa San Paolo

28/12/2021

31/12/2027

30,000

Euro

2,514

IRS Credit Agricole

29/05/2017

28/06/2024

10,000

Euro

IRS Intesa San Paolo

19/06/2018

31/01/2024

15,000

Euro

IRS Banca Popolare Milano

20/06/2018

30/06/2025

25,000

Euro

434

IRS Banca Popolare Milano

06/06/2019

30/06/2025

15,000

Euro

322

IRS Credit Agricole

09/08/2019

28/12/2025

10,000

Euro

323

IRS Intesa San Paolo

25/09/2019

31/12/2024

20,000

Euro

325

Total

125,000

4,063

Sensitivity analysis related to interest rate risk

With reference to interest rate risk, a sensitivity analysis was carried out to determine the effect on the income statement and shareholders’ equity resulting from a hypothetical positive and negative change of 100 bps in interest rates compared to those actually recorded in each period.

The analysis was carried out by primarily focusing on the following items:

•cash and cash equivalents;

•short and medium/long-term financial liabilities.

The table below highlights the results of the analysis:

Pag. 180 di 246

(in thousands of Euro)

Impact on Net Profit

Effect on Net Equity

Change

+ 100 bps

- 100 bps

+ 100 bps

- 100 bps

FY 2023

(1,034)

1,034

(1,034)

1,034

For comparability with the previous year, a similar analysis at December 31, 2022 is presented below:

(in thousands of Euro)

Impact on Net Profit

Effect on Net Equity

Change

+ 100 bps

- 100 bps

+ 100 bps

- 100 bps

FY 2022

(626)

626

(626)

626

Note: the plus sign indicates a higher profit and an increase in shareholders’ equity; the minus sign indicates a lower profit and a decrease in shareholders’ equity.

Raw material price risk

The Company’s production costs are influenced by the price trends of the main raw materials used. The price of these materials varies depending on a wide range of factors, to a large extent uncontrollable by the company and difficult to predict.

Specifically, the company implements a strategy to offset the price volatility risk of the commodities used through contractual hedging which are limited to price changes for raw materials, energy sources and partly, selling prices.

3.2 Credit risk

The Company’s exposure to credit risk relates to the possibility of insolvency (default) and/or in the deterioration of the credit rating of a counterparty and is managed through adequate valuation instruments of all counterparties by a dedicated department, utilising the appropriate instruments to carry out constant monitoring, on a daily basis, of the behaviour and credit rating of clients.

Pag. 181 di 246

The company hedges its credit risk through insurance policies on the client exposure, undertaken with primary debt insurance companies. External companies providing corporate information are utilised both to initially evaluate the reliability and for on-going monitoring of the economic and financial situation of clients.

The following table provides a breakdown of trade receivables from third parties at December 31, 2023, grouped by due date and net of the doubtful debt provision:

(in thousands of Euro)

At December 31, 2023

Not yet due

Overdue within 30 days

Overdue between 31 and 90 days

Overdue between 91 and 120 days

Overdue beyond 120 days

Guaranteed trade receivables (a)

5,742

3,423

1,945

112

(2)

264

Credit Notes to Customers

(3,226)

Non-guaranteed trade receivables (b)

677

461

154

Non-guaranteed trade receivables impaired (c)

199

Trade receivables before doubtful debt provision [(a)+(b)+(c)]

3,392

658

2,006

113

(2)

617

Doubtful debt provision

(315)

Trade receivables

3,078

658

2,006

113

(1)

302

For comparability with the previous year, a similar analysis at December 31, 2022 is presented below:

(in thousands of Euro)

At December 31, 2022

Not yet due

Overdue within 30 days

Overdue between 31 and 90 days

Overdue between 91 and 120 days

Overdue beyond 120 days

Guaranteed trade receivables (a)

4,509

2,441

796

935

294

Credit Notes to Customers

(3,686)

Non-guaranteed trade receivables (b)

443

111

166

Non-guaranteed trade receivables impaired (c)

199

Trade receivables before doubtful debt provision [(a)+(b)+(c)]

1,466

(1,189)

871

1,046

660

Doubtful debt provision

(1,210)

(472)

(78)

(660)

Trade receivables

256

(1,189)

871

574

Pag. 182 di 246

3.3Liquidity risk

Liquidity risk relates to the risk of the company being unable to meet its payment obligations due to the inability to source new funds or liquidate assets on the market. This results in a negative impact on economic performance if it is obliged to incur additional costs to meet its commitments or insolvency.

The liquidity risk to which the company is exposed relates to the inability to source sufficient funding for operations, in addition to industrial and commercial operations. The principal factors which determine the liquidity situation are, on the one hand, the resources generated and absorbed by the operating and investment activities and on the other the maturity dates and the renewal of the payable or liquidity of the financial commitments and also market conditions.

The company can avail of on-demand liquidity and has a significant availability of credit lines granted by a number of leading Italian and international banks. The company considers that the funds and credit lines currently available, in addition to those that will be generated from operating and financial activities, will permit the satisfaction of its requirements deriving from investment activities, working capital management and the repayment of debt in accordance with their maturities.

The table below shows an analysis of amounts due, based on contractual repayment obligations, relating to financial liabilities, trade payables and other current and non-current liabilities as at December 31, 2023:

(in thousands of Euro)

December 31, 2023

Within 1 year

Between 1 and 5 years

Beyond 5 years

Bond loan

70,649

13,258

51,677

5,714

Other current and non-current financial liabilities

305,469

80,323

222,565

2,581

Liabilities for intercompany RoU

1,509

285

1,224

Loans from subsidiaries

14,027

Trade payables

66,045

Intercompany trade payables

62,230

Other current and non-current liabilities

14,411

11,064

3,347

Other current and non-current intercompany liabilities

3,946

Pag. 183 di 246

All the amounts in the table above refer to the nominal amounts not discounted, stated with regards to the residual contractual maturities, both in terms of the capital and interest portions. The company expects to meet these commitments through cash flows generated from operating activities and where necessary, through medium-term financing operations.

In this risk analysis, we add the more detailed conclusions of the Directors’ Report on the impact of the spread of COVID-19 (coronavirus), the conflict between Russia and Ukraine and the most recent conflict between Israel and Palestine. In particular, it can be stated that - overall and based on the declaration of the World Health Organisation on the conclusion of the global health emergency - no impact and/or effect is seen (i) on the value of the assets shown in the financial statements (ii) on the recoverability of trade receivables (iii) on the net realisable value of inventories. As mentioned previously, the impact on the business thus far has remained, on the whole, limited. Therefore, no specific risks have been identified in terms of the ability of the Group and of Aquafil S.p.A. to meet its future commitments (including compliance with the "covenants" at December 31, 2024 set out in certain loan agreements) and/or which may impact the Group's ability to continue as a going concern.

With regards to the conflict between Russia and Ukraine and between Israel and Palestine, it is confirmed that this situation does not have direct impacts on the company, as currently not having (i) any investment in any the countries mentioned, nor (ii) financial instruments or liquidity in these currencies.

3.4Climate change risks

The Company and the Aquafil Group is passionate about its environmental, social and governance policies and plays an active role in the community.

The Group’s organisational structure for many years has considered the environmental impact of its processes and products and continuously assesses possible improvement actions, with an approach firmly focused on sustainability and circularity.

Pag. 184 di 246

This structure particularly considers the consequences for its activities, processes and local organisations from climate change, whose risk is consistently monitored and assessed. It may be stated that no significant impacts are currently expected on the operating activities carried out in the various regions in which the Company and Group operates.

4.MANAGEMENT OF CAPITAL

The Company’s capital management is aimed at ensuring a solid credit rating and adequate levels of capital indicators to support investment plans, in accordance with contractual obligations entered into with lenders.

The Company acquires the necessary capital to finance the needs for business development and operations; financing sources are divided into a balanced mix of risk capital and debt capital to ensure a balanced financial structure and the minimisation of the total cost of capital, for the consequent benefit of all stakeholders.

The remuneration of risk capital is monitored on the basis of the market trend and business performance, once all other obligations have been met, including the debt service; therefore, in order to ensure an adequate remuneration of capital, the safeguarding of business continuity and business development, the Company constantly monitors the development of the debt level in relation to shareholders’ equity, business performance and forecasts of expected cash flows in the short and medium/long-term.

Pag. 185 di 246

5.CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES

The tables below illustrate the breakdown of financial assets and liabilities of the Company required by IFRS 7, as per the categories identified by IFRS 9, at December 31, 2023:

(in thousands of Euro)

Financial assets and liabilities measured at fair value through P&L

Loans and receivables

Financial liabilities at amortised cost

Total

Current and non-current financial assets

1,974

Current and non-current intercompany financial assets

Equity investments in group companies

333,710

Investments in other companies

164

Financial receivables from third parties

100

Current and non-current financial receivables from group companies

35,437

Trade receivables

2,763

Trade receivables intercompany

76,632

Other receivables and non-current assets

3,609

Intercompany tax receivables

5,854

Cash and cash equivalents

72,746

Total

1,974

531,016

532,989

Current and non-current financial liabilities

375,498

Current and non-current intercompany RoU payables

1,509

Current and non-current intercompany financial liabilities

14,027

Trade payables to suppliers

65,699

Advances and other current payables

346

Intercompany trade payables

62,230

Other non-current liabilities

3,347

Other current liabilities

11,064

Intercompany tax payables

3,946

Derivative financial instruments

619

Total

619

537,666

538,285

The other financial assets and liabilities are short-term and regulated at market interest rates and therefore the book value is considered to reasonably approximate fair value.

5.1Measurement of the fair value

Pag. 186 di 246

•Level 1: fair value determined with reference to listed prices (not adjusted), on active markets for identical financial instruments;

•Level 2: fair value determined with valuation techniques with reference to observable variables on active markets;

•Level 3: fair value determined with valuation techniques with reference to non-observable variables on markets;

The table below summarises the assets and liabilities measured at fair value at December 31, 2023, on the basis of the level which reflects the inputs utilised in the determination of the fair value.

(in thousands of Euro)

December 31, 2023

December 31, 2022

Derivative financial instruments – Liabilities

(619)

Derivative financial instruments - Assets

1,974

4,063

Total

1,354

4,063

6.DISCLOSURE BY OPERATING SEGMENT

Pag. 187 di 246

For the purposes of IFRS 8 – Operating Segments, company activity is identifiable in a single operating segment.

In fact, the Company structure identifies a strategic and singular vision of the business and this representation is consistent with the manner in which management takes its decisions, allocates resources and defines the communication strategy. Dividing the business into separate divisions is therefore currently viewed as detrimental to its economic interests.

7.NOTES TO THE BALANCE SHEET

7.1.Intangible assets

The breakdown in the account and changes in the period were as follows:

(Euro thousands)

Patents & property rights - Know-how

Trademarks, concessions, licenses and similar

other intangible assets

Intangible assets in progress

Total

Balance at 31.12.2021

3,899

10,295

14,270

Historic cost

203

4,376

18,230

10,295

33,104

Acc. amort.

(203)

(4,300)

(14,331)

(18,834)

Increase

1,137

991

2,183

Reclassifications

9,805

(9,798)

Decrease

(132)

Amortization

(40)

(3,584)

(3,624)

Balance at 31.12.2022

11,256

1,355

12,705

Historic cost

203

4,434

29,172

1,355

35,164

Acc. amort.

(203)

(4,339)

(17,916)

(22,458)

Increase

101

997

1,097

Reclassifications

280

(361)

(82)

Write-downs

Decrease

Amortization

(31)

(3,413)

(3,444)

Balance at 31.12.2023

8,223

1,990

10,277

Historic cost

203

4,434

29,552

1,990

36,179

Acc. amort.

(203)

(4,370)

(21,329)

(25,902)

Pag. 188 di 246

The increases in the year, totalling Euro 1,097 thousand, mainly refer to the Information and Communication Technology activities represented by the costs of developing specific software implementation projects.

Other Intangible assets include the Company’s investments in the development of new products and processes, including the "Effective" project coordinated by Aquafil and funded by the Bio-Based Industries Joint Undertaking (BBI JU) as part of the European Horizon 2020 research programme and focused on the production of bio-caprolactam. The bio-caprolactam production process was started in 2022 on a pilot basis, generating annual amortisation of Euro 1,821 over a five-year period.

7.2.Property, plant & equipment

The breakdown in the account and changes in the period were as follows:

(Euro thousands)

Land and Buildings

Plant & Equipment

Equipment

Other assets

Assets in progress and advances

Total before RoU

Right-of-Use

Total

Balance at 31.12.2021

11,758

16,337

213

4,237

32,624

4,505

37,129

Historic cost

32,250

137,880

5,028

1,762

4,237

181,156

7,117

188,273

Acc. deprec.

(20,492)

(121,543)

(4,815)

(1,682)

(148,532)

(2,612)

(151,144)

Increase

165

959

5,644

6,811

1,536

8,347

Reclassifications

1,477

1,451

(2,958)

(9)

Write-downs

Decrease

(181)

(263)

(444)

(313)

(756)

Depreciation

(1,892)

(3,640)

(52)

(24)

(5,609)

(1,478)

(7,087)

Balance at 31.12.2022

11,508

14,925

194

6,660

33,374

4,250

37,624

Historical cost

33,892

138,679

5,046

1,737

6,660

186,014

7,022

193,036

Acc. deprec.

(22,384)

(123,754)

(4,852)

(1,651)

(152,641)

(2,772)

(155,412)

Increase

1,854

221

4,428

6,580

1,061

7,641

Reclassifications

235

2,461

(2,695)

Write-downs

Decrease

(1,443)

(797)

(2,240)

Depreciation

(1,433)

(3,741)

(110)

(23)

(5,307)

(1,716)

(7,022)

Balance at 31.12.2023

10,374

15,499

386

6,950

33,286

2,799

36,085

Historic cost

34,191

142,963

5,338

1,746

6,950

191,187

4,337

195,523

Pag. 189 di 246

Acc. deprec.

(23,817)

(127,463)

(4,952)

(1,669)

(157,901)

(1,538)

(159,439)

The increases in the year, overall amounting to Euro 7,641 thousand, principally relate to:

-for Euro 1,061 thousand the application of IFRS 16;

-for approx. Euro 1,588 thousand the technological improvement and upgrading of existing plant and equipment (mainly in progress);

-for approx. Euro 3,506 thousand for projects to improve production and industrial efficiency (the majority of which still ongoing).

The decreases however concern the sale of spinning systems to the subsidiary Aquafil USA, and to RoU decreases, as presented below.

(Euro thousands)

Right-of-use buildings

Right- of-use equipment and transport vehicles

Right-of-use motor vehicles

Total

Balance at January 01, 2022

3,721

279

505

4,505

Historical cost

5,615

631

870

7,117

Acc. deprec.

(1,895)

(352)

(365)

(2,612)

Increase

525

292

861

Decreases

(75)

(210)

(28)

(314)

Depreciation

(988)

(244)

(246)

(1,478)

Exchange rate differences

Balance at December 31, 2022

3,573

185

492

4,250

Historic cost

5,741

330

951

7,022

Acc. deprec.

(2,167)

(146)

(459)

(2,772)

Increases

351

311

399

1,061

Pag. 190 di 246

Decreases

(778)

(6)

(13)

(797)

Depreciation

(1,131)

(305)

(280)

(1,716)

Exchange rate differences

Balance at December 31st 2023

2,015

185

599

2,799

Historic cost

2,774

466

1,097

4,337

Acc. deprec.

(759)

(281)

(498)

(1,538)

The decrease of Euro 778 thousand of Building right-of-use principally stems from the early conclusion of the lease contract between Aquafil and Aquafin Holding for the building located in San Martino Buon Albergo, owned by the latter.

At December 31, 2023, the company did not identify any impairment indicators relating to property, plant and equipment.

7.3Current and non-current financial assets

The breakdown of the account is shown below (including current and non-current):

(Euro thousands)

December 31, 2023

December 31, 2022

Equity investments in group companies

333,710

307,915

Investments in other companies

164

Non-current financial receivables parent companies

234

Escrow bank deposits and guarantee deposits

100

102

Non-current financial receivables from associates

Non-current financial receivables from subsidiaries

35,408

39,821

Current financial receivables from subsidiaries

950

Derivative financial instruments

1,974

4,063

Total

371,385

353,127

of which current

1,974

5,013

of which non-current

369,412

348,114

The breakdown of investments in subsidiaries and associates is illustrated below:

Company

Registered office

Holding

Opening balance

Increases

Write-downs

Total

Tessilquattro S.p.A.

Arco (IT)

100.00%

22,545

Aquafil USA Inc.

Cartersville (USA)

100.00%

124,298

Aquafil SLO d.o.o.

Ljubjiana (SLO)

100.00%

73,343

25,000

98,343

Pag. 191 di 246

Aquafil Jiaxing Co. Ltd

Jiaxing (CHN)

100.00%

53,523

1,348

54,871

Aquafil CRO d.o.o.

Oroslavje (CRO)

100.00%

11,730

Aquafil UK Ltd

Ayrshire (UK)

100.00%

Aquafil Asia Pacific Co. Ltd

Rayoung (THA)

99.99%

8,608

Aqualeuna G.m.b.H.

Leuna (GER)

100.00%

10,964

Aquafil Tekstil Sanayi Ve Ticaret A.S.

Istanbul (TUR)

99.99%

557

(557)

Aquafil Benelux France B.V.B.A.

Harelbake (BEL)

99.90%

Cenon S.r.o.

Zilina (SLO)

100.00%

Aquafil India Private Ltd

New Dehli (IND)

99.97%

Aquafil Oceania

Melbourne (AUS)

100.00%

Aquafil Japan Corp

Tokyo (JPN)

100.00%

1,142

Bluloop S.r.l. Benefit Company

Arco (IT)

100.00%

Nofir AS

Bodo (NO)

31.66%

1,018

Polyservice

Lyon (FR)

45.00%

Total

307,915

26,352

(557)

333,710

The increase of the investment in Aquafil SLO d.o.o., in September 2023, was made through total capital contributions of Euro 25 million.

On May 8, 2023, a payment of Euro 1,348 thousand was made with a consequent increase in the investment held in Aquafil Jiaxing Co. Ltd.. This liquidity contribution was necessary in order to pay in the remainder of the capital subscribed and not yet settled into the subsidiary. Following the final payment, the entire share capital of the company Aquafil Jiaxing Co. Ltd has therefore been fully paid-in.

On August 6, 2023 Aquafil S.p.A. and Politecnici S.r.l. incorporated the company Poly-Service S.a.s., based in Lyon (France), with a share capital of Euro 10,000. Aquafil holds 45% of the company, while Politecnici S.r.l. holds 55%. The corporate purpose of the company is the design, production and marketing of plastics, rubber, nylon and related products, in addition to semi-finished, finished and recycled products based on plastics, particularly nylon, in addition to the collection of post-consumer plastics, rubber, nylon and related products and subsequent processing into secondary raw materials. No significant operations are reported as the company is in the start-up phase.

The subsidiary Aquafil Tekstil Sanayi was fully written-down in 2023 for Euro 557 thousand.

The write-down recorded in the year derives from the application of the impairment test on the investees where there were indicators of loss in value as described in paragraph 12 of international accounting standard IAS 36.

Investments in other companies

Pag. 192 di 246

The investments in other companies increased in view of the new investment which, in May 2023, was recognised for Euro 150 thousand in the company Karun World Ltd., with registered office in Warwick (Great Britain), equal to 1.83% of the share capital. The company is engaged in the environmentally-sustainable production of eyewear from the collection of waste materials, such as rope or fishing nets recovered from the coasts and mountains of Patagonia.

Investments in other companies mainly refer to the investment in Banca di Verona for Euro 11 thousand and the investment in the company Trentino Export S.c.a.r.l. for Euro 3 thousand.

Escrow bank deposits and guarantee deposits

The escrow bank deposits and guarantee deposits refer to guarantees provided to suppliers for various services.

Financial receivables from subsidiaries, associates and parent companies

The breakdown of current and non-current receivables parent companies, subsidiaries and associates is illustrated below:

in thousands of Euro

December 31, 2023

of which current

December 31, 2022

of which current

AQUAFILSLO d.o.o.

30,000

35,200

AQUALEUNA G.m.b.H.

950

AQUASPACE S.p.A

AQUAFIN HOLDING S.p.A

234

AQUAFIL JAPAN

4,158

4,621

BLULOOP

300

TOTAL

35,437

41,034

950

•Aquafil SLO d.o.o.

Pag. 193 di 246

Residual receivables from the subsidiary consist of two loans:

•a loan granted in February 2022 for Euro 10,000 thousand with maturity in February 2025, whose residual payable is Euro 10,000 thousand;

•a second loan granted in August 2022 for Euro 20,000 thousand with maturity in July 2027, whose residual payable is Euro 20,000 thousand.

•Aqualeuna G.m.b.H.

The residual receivable from the subsidiary at December 31, 2023 was Euro 950 thousand.

•Aquafil UK Ltd

The receivable from the subsidiary, totalling Euro 3,510 thousand, refers to loans granted in June 2021, December 2022 and October 2023.

Given the loss reported by the subsidiary, the financial receivable was completely written down.

•Aquaspace

The receivable from other related parties relates to guarantee deposits of Euro 29 thousand paid by the Company over a multi-year lease for the property located in Via del Garda 40 - Rovereto.

•Aquafin Holding

The receivable from the parent company concerned the deposit of Euro 234 thousand, which was fully reimbursed on December 21, 2023 following the mutual resolution of the multi-year lease for the property owned by Aquafin Holding located in San Martino Buon Albergo, Verona.

•Aquafil Japan

The loan to the Japanese subsidiary at December 31, 2023 amounted to Euro 4,158 thousand.

Pag. 194 di 246

•Bluloop S.r.l.

The loan to the subsidiary was provided during the year in order to support its development phase, as the company was established in 2022.

Derivative financial instruments

The fair value of the derivative financial instruments (IRS - IRC), recognised to current financial assets, decreased by Euro 2 million, substantially due to the change in the market interest rate curve. As previously illustrated, “hedge accounting” was not applied to these derivatives as, although entered into for hedging purposes, have been considered for accounting purposes and consistently with the past, as non-hedging instruments (and therefore the relative fair value is recognised in the income statement), as it is very complex to prepare the mandatory hedging relationship.

7.4.Other non-current assets

In 2023, the final transfer was received to settle the receivable from the EU for the “Effective” research project co-ordinated by Aquafil and funded by Bio-Based Industries Joint Undertaking (BBI JU) as part of the European Horizon 2020 research programme, with the entire chain (from raw material manufacturers to brands) involved in validating the use of bio Nylon 6 and other bio-polymer consumer market products; reference should be made also to the Directors' Report for more details on the project.

In particular, with the signing of the agreement between the partners and other lenders, an overall amount of Euro 1.7 million was stipulated, with deferred income recognised under Other liabilities

Pag. 195 di 246

(Note 7.16) which was equal to Euro 673 thousand at December 31, 2023. The receivable was reduced for the amounts effectively paid by the European Union, substantially recognised on the basis of the convention rules which provides for payment based on the state of advancement. Therefore, at December 31, 2023, the company did not have any residual receivable from the EU.

7.5Deferred tax assets and liabilities

The breakdown of the items "Deferred tax assets” and “Deferred tax liabilities" is shown below:

(Euro thousands)

December 31, 2023

December 31, 2022

Deferred tax assets

6,721

2,172

Deferred tax liabilities

(13)

Total

6,708

2,159

The relative movement is comprised of:

(Euro thousands)

At January 1, 2023

Provisions / releases to net equity

Provisions / releases to income P&L

At December 31, 2023

Deferred tax assets

Provision for risks and charges

205

(72)

133

Doubtful debt provision

194

(118)

Measurement of employee benefits as per IAS 19

(23)

(10)

Intangible and tangible fixed assets

470

(108)

361

Tax losses

996

2,008

3,004

Inventories

Other provisions

Application of the amortised cost method

Derivative financial instruments

Ace

345

Exchange rate differences

257

(94)

163

Interest expense (Art. 96 of Consolidated Income Tax Act)

2,575

Total deferred tax assets

2,172

4,543

6,721

Deferred tax liabilities

Intangible and tangible fixed assets

(13)

Other

Total deferred tax liabilities

(13)

Pag. 196 di 246

Total net deferred tax assets

2,159

4,543

6,708

Total deferred tax assets and liabilities recognised to the income statement

4,543

With regard to deferred tax assets:

•Deferred tax assets on the intangible and tangible fixed assets refer to the reversal of intangible fixed assets following the adoption of IAS accounting standards;

•deferred tax assets on tax losses of Euro 3,004 thousand refer to the mutual agreement procedure under Article 6 of the Convention for the elimination of double taxation in the case of the adjustment of profits of associated companies of July 23, 1990 No. 90/436/EEC - relating to the acceptance of the agreement by the competent financial administrations in Italy and Germany in relation to the tax year 2017. Similarly to 2016, on February 15, 2023 the Company submitted, pursuant to Article 3, paragraph 1, of Law No. 99 of March 22, 1993, a refund application for IRES and IRAP purposes to the Provincial Directorate of Trento for Euro 996 thousand and thus awaits the refund authorisation measure. The increase for the year of Euro 2,008 thousand (of which Euro 1,630 thousand for IRES and Euro 378 thousand for IRAP) refers to the mutual agreement procedure initiated on October 4, 2023, similarly to that undertaken for the 2017 tax period and as discussed in more detail in the Contingent Liabilities section.

•deferred tax assets of Euro 345 thousand were allocated during the year 2023 in reference to the accrued ACE benefit, which could not be used in the absence of positive assessable income;

•deferred tax assets of Euro 2,575 thousand were allocated during the year 2023, in relation to the amount of interest charges not deducted under the Income Tax law (TUIR) (Article 96), as the amount exceeds the limit of 30% of ROL, and will therefore be deducted in subsequent years.

The Company filed an evidential request concerning the non-application of the anti-evasion provisions of Article 10, paragraph 2 and paragraph 3, letters a) and c), of the new economic-development decree on the basis that amounts paid out by the Company, during the period 2011-2022, to non-resident companies of the Group and subject to the non-application request could not, directly or indirectly, be considered transfers to resident companies of the Group and, consequently, a duplication of the economic-development (ACE) benefit. On November 2, 2023, the Italian inland

Pag. 197 di 246

revenue office issued a favourable opinion on the non-applicability of the anti-evasion provisions of Article 10, paragraph 2 and paragraph 3, letters a) and c), of the new “ACE” decree.

In relation to “Deferred tax liabilities”, the account “Intangible and tangible fixed assets” refers for Euro 13 thousand to the reversal of intangible assets following the adoption of IAS accounting standards.

7.6Inventories

The changes in the account were as follows:

(Euro thousands)

December 31, 2023

December 31, 2022

Raw materials, ancillary and consumables

17,035

21,497

Inventories of finished products and goods

39,816

43,907

Total

56,851

65,404

Inventories are recorded net of the obsolescence provision amounting to Euro 255 thousand and relates to slow moving prior stock.

The decrease is due to the dual effect of the decrease in prices of raw materials and industrial cost components and the decrease in volumes of stock at the end of the year, particularly of raw materials.

7.7Trade receivables

Pag. 198 di 246

The changes in the account were as follows:

(Euro thousands)

December 31, 2023

December 31, 2022

Trade receivables

3,078

1,438

Parent, associates and other related parties

76,632

115,597

Doubtful debt provision

(315)

(1,210)

Total

79,395

115,825

The decrease in receivables is closely connected with the lower revenues, prices and the altered collection deadlines with the Group companies.

The following table shows the movement of the doubtful debt provision:

(Euro thousands)

Balance at January 1, 2023

(1,210)

Utilisations

113

Reversals

782

Balance at December 31, 2023

(315)

The utilisation of the doubtful debt provision relates to the closure of certain receivables arising in previous years deemed uncollectible. Releases are the result of an updated analysis of the collectability of trade receivables outstanding at the balance sheet date.

Reference should be made to the previous paragraph 3.2 for details on the credit risk management policy.

Receivables from subsidiaries, parent and related parties

The account includes current trade receivables as follows:

(in Euro thousands)

December 31, 2023

December 31, 2022

Pag. 199 di 246

AQUAFIL ASIA PACIFIC CO.

232

163

AQUAFIL ENGINEERING GMBH

AQUAFIL UK LIMITED

3,324

1,233

AQUAFILSLO d.o.o.

17,017

57,740

AQUALEUNA G.m.b.H.

374

303

AQUAFIL CARPET RECYCLING

298

AQUAFIL CARPET Rec.#2

AQUASPACE S.p.A

TESSILQUATTRO

38,079

29,114

AQUAFIL Usa Inc.

10,647

23,501

AQUAFIN HOLDING S.p.A

275

305

AQUAFIL TEXTIL SANAYI

605

1,003

AQUAFIL China

5,191

1,940

AQUAFIL O'MARA

146

AQUAFIL JAPAN

397

NOFIR

BLULOOP

121

Total

76,632

115,597

The decrease in trade receivables from subsidiaries, parent companies and related parties was mainly due to the decrease in the receivables from the subsidiaries Aquafil USA and Aquafil SLO, as a result of the Group’s decreased sales.

7.8Income tax receivables

There are no IRES receivables for current taxes.

7.9.Other current assets

The changes in the account were as follows:

(Euro thousands)

December 31, 2023

December 31, 2022

Tax receivables

730

4,339

Supplier advances

224

399

Pension and social security institutions

162

Employee receivables

256

272

Tax receivables from parent

5,854

247

Tax receivables subsidiaries

Other receivables

220

246

Pag. 200 di 246

Prepayments and accrued income

2,123

1,697

Total

9,463

7,361

The following is specified in relation to the above items:

•“Tax receivables”: principally refer to:

ofor Euro 132 thousand the recovery of VAT from insolvency procedures;

oEuro 282 thousand in tax credits determined pursuant to Article 1, paragraph 35, of Law No. 190 of 23/12/2014 and subsequent amendments, and determined as follows: 1. for fundamental research, industrial research and experimental development in science and technology, the tax credit is recognised at 10% of the eligible expenses; 2. for technological innovation for the creation of new or substantially improved products or production processes, the tax credit is recognised at 10% of the eligible expenses; 3. the tax credit is recognised at 10% of the eligible expenses for technological innovation aimed at achieving an objective of digital innovation 4.0;

ofor Euro 85 thousand receivables for withholding taxes on dividends received from the subsidiaries Aquafil Jiaxing and Aquafil Asia Pacific.

•“Supplier advances”: these refer mainly for Euro 224 thousand in advances for services yet to be provided.

•“Tax receivables from parents”: for Euro 5,854 thousand these refer to tax receivables from Aquafin Holding S.p.A. generated by the transfer of the tax losses of Aquafil S.p.A., Tessilquattro S.p.A. e Bluloop S.rl. Benefit Company to the tax consolidation, with Aquafin Holding S.p.A. as the consolidating entity, but through Aquafil S.p.A., which per the tax consolidation agreement remains responsible for netting in the calculation of tax receivables and payables relating to IRES (company income tax) as per Article 228 et seq. of the Income Tax Law. The significant increase mainly stems from the tax loss of Aquafil S.p.A., following the reporting of a net loss for the year, which in the context of the tax consolidation increased the receivable from the consolidated Aquafin Holding S.p.A..

•“Other receivables”: The balance refers for Euro 220 thousand to the European CISUFLO project within the scope of the Ecodesign activities: CIrcularSUstainableFLOorcovering with 17 consortium members in which Aquafil participates as PA6 producer & recycler with the specific role of verifying in pilot and industrial tests the recyclability of the carpets developed with the new design criteria; the project kick-off meeting between all consortium members took place

Pag. 201 di 246

on June 16, 2021, for a total development of approx. 4 years; The first tranche of the reporting period for Euro 26 thousand was received in 2023;

•“Prepayments and accrued income”: these mainly refer to prepayments for insurance premiums for Euro 165 thousand, information and communication technology consultancy fees invoiced in advance of completion of service for Euro 467 thousand, prepayments for electrical system charges for Euro 726, prepayments for purchases of maintenance materials for Euro 94 thousand, personnel training grants for Euro 393 thousand, and costs related to the SACE guarantee for Euro 45 thousand.

7.10Cash and cash equivalents

The account is comprised of:

(Euro thousands)

December 31, 2023

December 31, 2022

Cash and equivalents

Bank and postal deposits

72,737

52,702

Total

72,746

52,713

The account refers to the company’s current account balances.

The breakdown of cash and cash equivalents by currencies is illustrated in the table below:

(in thousands of Euro)

December 31, 2023

EUR

59,924

USD

11,821

GBP

JPY

991

Total

72,737

Pag. 202 di 246

The Company has maintained an adequate level of available liquidity as a prudent measure in order to reduce liquidity risk and also so as to combat the potential impact of the ongoing conflicts.

For further details, reference should be made to the cash flow statement.

We highlight the following with regards to loans in the year:

new medium-term unsecured loans agreed by Aquafil S.p.A. for a total amount of Euro 100 million, of which Euro 40 million with SACE “Supportitalia” guarantees, against the repayment of outstanding loans in 2023 for a total of Euro 58.8 million. Borrowings are detailed in the Explanatory Notes.

There were no restrictions on liquidity.

7.11.Assets held for sale

The account includes machinery constructed internally for installation at other companies of the Group for Euro 703 thousand. The decrease on the previous year mainly concerns the sales of the spinning lines transferred to the US subsidiary Aquafil USA.

Pag. 203 di 246

7.12Shareholders’ Equity

Share capital

At December 31, 2023, the Company authorised share capital amounted to Euro 50,522 thousand, whose subscribed and paid-up capital amounts to Euro 49,722 thousand, while the unsubscribed and unpaid portion relates to, for Euro 800 thousand, the capital increase in service of Aquafil Sponsor Warrants. The subscribed and paid-up share capital is divided into 51,218,794 shares without nominal value divided into:

•42,902,774 ordinary shares, identified by the ISIN Code IT0005241192;

The share capital of the company amounts to Euro 49,722,417; the number of ordinary shares is 42,902,774, with 8,316,020 class B shares and a total therefore of 51,218,794 shares.

The breakdown of Aquafil S.p.A.’s subscribed and paid-up share capital at December 31, 2023 is shown below:

Type of shares

No. shares

% of Share Capital

Listing

Ordinary

42,902,774

83.76%

MTA, STAR Segment

Class B

8,316,020

16.24%

Non-listed

Class C

0.00%

Non-listed

Total

51,218,794

100%

Pag. 204 di 246

On the basis of communications sent to the National Commission for Companies and the Stock Exchange (CONSOB), and received by the Company pursuant to Article 120 of Legislative Decree No. 58 of February 24, 1998, as well as the effect of the conversion of Market Warrants in the year, holders of a significant shareholding as at December 31, 2023 - i.e. considering Aquafil S.p.A.’s qualification as an SME pursuant to Article 1 (w-quater). 1 of the CFA, of a shareholding of greater than 5% of Aquafil S.p.A. share capital with voting rights.

The declarant or subject at the top of the equity chain

Direct shareholder

Type of shares

No. shares

No. votes

GB&P S.r.l.

Aquafin Holding S.p.A.

Ordinary

21,554,705

Class B

8,316,020

24,948,060

Total

29,870,725

46,502,765

Holding

58.32%

68.54%

The availability and distributability of shareholders’ equity is outlined in the following table:

Description

Amount

Origin

Possibility of utilisation

Quota available

Share capital

49,722,417

Legal reserve

2,053,359

- of profits

2,053,359

Share premium reserve

19,975,348

of capital *

A,B

19,975,348

Negative reserve for treasury shares in portfolio

(8,612,054)

of share capital

Non-distributable reserve for listing costs

(3,287,529)

of share capital

FTA Reserve

(2,156,097)

of share capital

IAS 19 reserve

(198,021)

of share capital

Total capital reserves

5,721,648

Other reserves

50,575,624

- of profits

A,B,C

50,575,624

- Retained earnings

- of profits

A,B,C

Total profit reserves

52,628,983

50,575,624

Profit/(loss) for the year

(5,641,004)

Total Shareholders’ Equity

102,432,043

Non-distributable reserve

1,990,244

Distributable Reserve

48,585,380

* The share premium reserve is distributable when the legal reserve reaches one-fifth of the share capital.

** Non-distributable portion equal to intangible assets in progress

Warrants

Pag. 205 di 246

The following were initially issued on listing:

(i)7,499,984 Aquafil Market Warrants, listed and identified by the ISIN Code IT0005241200, which incorporate the right to the allocation of Aquafil S.p.A. shares of Conversion Market Warrants and are exercisable under the conditions set out in the relative regulation approved by the Space3 extraordinary shareholders’ meeting by resolution of December 23, 2016. Pursuant to the Aquafil S.p.A. Market Warrant Regulation (ISIN IT0005241200), December 4, 2022 was the deadline for the exercise of the Aquafil Warrants financial instruments, as 60 (sixty) months had elapsed since the date of admission to listing of Aquafil’s ordinary shares (ISIN IT0005241192);

(ii)800,000 Aquafil Sponsor Warrants, identified by the ISIN Code IT0005241754, non-listed and exercisable within ten years from the date of December 4, 2017, payable at the unit exercise price of Euro 13.00 (on achieving a "Strike Price" of Euro 13.00), in response to the allocation of an Aquafil Share of Aquafil Conversion Sponsor Warrants for each Sponsor Warrant exercised.

It should be noted that on December 4, 2022, the exercise deadline for the Aquafil Warrants financial instruments concluded, and therefore as of December 31, 2022, 2,014,322 Aquafil Market Warrants have been converted with the allotment of 498,716 Conversion Shares. As of December 31, 2023, therefore, no other Market Warrants are outstanding, while it is noted that no Aquafil Sponsor Warrants have been converted.

Legal reserve

The legal reserve at December 31, 2023 was equal to Euro 2,053 thousand; the increase of Euro 797 thousand was approved by the Shareholders’ Meeting of April 27, 2023 which allocated to this reserve one twentieth of the profit for the year 2022.

Pag. 206 di 246

Share premium reserve

The share premium reserve amounted to Euro 19,975 thousand at December 31, 2023 and is derived from the merger transaction between Aquafil S.p.A. and Space 3 S.p.A. on December 4, 2017.

Negative reserve for treasury shares in portfolio

The negative reserve for treasury shares in portfolio totalled Euro 8,612,054 at December 31, 2023. It should be noted that, on October 20, 2021, Aquafil S.p.A. announced that the Company’s Shareholders authorised the purchase of treasury shares in accordance with Article 2357 of the Italian Civil Code. This authorisation by Shareholders has a duration of 18 months from the date of the authorising resolution. The operation is aimed at enabling the Company to purchase and/or make use of the Company’s ordinary shares for: (i) making investments and limiting anomalous changes in share prices so as to promote regular trading outside of normal fluctuations tied to market trends, while, in any event, observing applicable laws and regulations; and (ii) establishing a securities reserve for future uses in accordance with the strategies that the Company intends to pursue as payment in corporate transactions with other parties or other extraordinary uses. The Shareholders authorised the purchase, in one or more tranches, of ordinary shares up to a maximum number which, taking account of the ordinary shares which may be held in portfolio by the company and by its subsidiary, does not total more than 3% of share capital.

On December 31, 2023, following the purchases made, Aquafil held 1,278,450 treasury shares, equal to 2.4961% of the share capital.

Listing costs / Share capital increase reserve

Pag. 207 di 246

This item amounted to Euro 3,287 thousand at December 31, 2023, as a decrease in shareholders’ equity and relates to the costs incurred in 2017 for the listing and thereafter the share capital increase.

“First Time Adoption” Reserve (FTA)

The FTA reserve amounts to Euro 2,156 thousand, as a reduction of net equity, and represents the conversion effects from Italian GAAP to IFRS.

IAS 19 reserve

At December 31, 2023, the IAS 19 reserve was equal to a Euro 198 thousand reduction in shareholders’ equity and includes the actuarial effects at that date of severance indemnities and all the other benefits for employees of Group companies.

Retained earnings

Following the Shareholders’ Meeting resolution of April 27, 2023, the retained earnings of Euro 30,996 thousand was allocated to increase the extraordinary reserve, both having the same nature.

Extraordinary Reserve

At December 31, 2023, they amount to Euro 50,575 thousand. The increase of Euro 34,138 thousand on the previous year follows the allocation of the Retained earnings and of the 2022 net profit not allocated to dividend.

Pag. 208 di 246

Dividends

The Shareholders’ Meeting of April 27, 2023 approved the distribution of dividends, with the payment to shareholders of a dividend of Euro 0.24 per share, for a total of Euro 12 million.

7.13Employee benefits

The account is comprised of:

(in thousands of Euro)

Balance at December 31, 2022

1,805

Financial charges

Advances and settlements

(305)

Actuarial (gain) / loss

Balance at December 31, 2023

1,580

The post-employment benefits provision includes the effects of discounting as required by the IAS 19 accounting standard.

For completeness the table below shows the changes in the previous year:

(in thousands of Euro)

Balance at December 31, 2021

2,176

Financial charges

Advances and settlements

(172)

Pag. 209 di 246

Actuarial (gain) / loss

(228)

Balance at December 31, 2022

1,805

The following is a breakdown of the main economic and demographic assumptions used for actuarial valuations:

Financial assumptions

December 31, 2023

Discount rate

2.95%

Inflation rate

2.00%

Annual increase in employee leaving indemnity

3.00%

Demographic assumptions

Death

The RG48 mortality tables published by the General State Controller

Disability

INPS tables by age and gender

Retirement

100% on satisfying AGO requirements

Annual frequency of Turnover and leaving indemnity advances

Frequency advances

4.50%

Frequency turnover

2.50%

The bond’s financial average duration at December 31, 2023 is approximately 7 years.

For comparability with the previous year a breakdown of the main economic and demographic assumptions used for actuarial valuations at December 31, 2022 is shown below:

Financial assumptions

2022

Discount rate

3.57%

Inflation rate

2.30%

Annual increase in employee leaving indemnity

3.23%

Demographic assumptions

Pag. 210 di 246

Death

The RG48 mortality tables published by the General State Controller

Disability

INPS tables by age and gender

Retirement

100% on satisfying AGO requirements

Annual frequency of Turnover and leaving indemnity advances

Frequency advances

4.50%

Frequency turnover

2.50%

7.14Current and non-current financial liabilities

The account is comprised of:

(Euro thousands)

December 31, 2023

of which current portion

December 31, 2022

of which current portion

Medium/long term bank loans

301,010

76,865

259,688

59,911

Accrued interest and charges on medium/long-term bank loans

(5)

(379)

Total medium/long-term loans

301,005

76,859

259,310

59,533

Bond loans

70,248

12,857

83,158

12,857

Accrued interest and charges on bonds

401

251

Total bond loan

70,649

13,258

83,409

13,108

Current and non-current RoU liabilities

3,000

775

4,401

1,379

Financing payables to Finest S.p.A.

Liabilities for derivative financial instruments

619

Other lenders and banks – short term

2,354

1,106

Loans intercompany

14,027

8,438

Parent company loans

Total

391,653

93,865

356,664

75,126

Medium/long term bank loans

Pag. 211 di 246

This account refers to payables relating to financing agreements obtained from major credit institutions. These agreements mainly envisage the payment of interest at a fixed rate or, alternatively, at a variable rate typically linked to the Euribor rate for the period plus a spread.

At the end of the year, all of the Group's loans were contracted by Aquafil S.p.A., which supports through loans and capital increases the investment activities of its subsidiaries.

Aquafil S.p.A. in 2023 maintained its levels of liquidity, which had significantly increased in the previous two years, partly with a view to maintaining liquidity in consideration of the conflicts between Russia and Ukraine and in the Middle East. In 2023, the loans were settled on schedule and new medium/long-term loans were agreed for a total amount of Euro 100 million with leading banks.

The two new medium-term loans, for an amount of Euro 20 million each, the first with Monte dei Paschi di Siena and the second with Intesa SanPaolo, are supported by the SACE “Supportitalia” guarantee (Article 15 of Legislative Decree No. 50 of 17.5.2022).

The funds raised were used to maintain liquidity.

(in thousands of Euro)

Original amount

Granting date

Maturity date

Loan Repayments

Rate applied

At December 31, 2023

of which current portion

Medium/long term bank loans - fixed rate

Cassa Centrale Banca – Credito Cooperativo del Nord Est (ex Casse rurali trentine) (*)

15,000

2019

2026

quarterly from 30/09/2021

1.25% fixed from 01/07/2026 Euibor 3 months + 1.00%

7,617

2,977

Cassa Centrale Banca (*)

11,000

2022

2029

quarterly from 31/12/2023

1.20% fixed from 01/04/2026 Euribor 3 months + 1.00%

10,516

1,952

Crédit Agricole (former: Credito Valtellinese) (*)

15,000

2018

2024

quarterly from 05/10/2018

1% fixed

3,259

Cassa Depositi e Prestiti (*)

20,000

2020

2027

half-yearly from 20/06/2023

1.48% fixed

16,000

4,000

Total Medium/long term bank loans - fixed rate

37,391

12,188

Medium/long term bank loans - variable rate

Deutsche Bank (*)

5,000

2018

2024

quarterly from 15/01/2019

Euribor 3 months + 1.20%

938

Deutsche Bank (*)

20,000

2022

2028

quarterly from 01/10/2023

Euribor 3 months + 1.20%

18,000

4,000

Sparkasse - Cassa Risparmio di Bolzano (*)

20,000

2018

2025

quarterly from 31/03/2020

Euribor 3 months + 0.85%

8,102

4,034

Sparkasse - Cassa Risparmio di Bolzano (*)

10,000

2022

2028

quarterly from 31/12/2024

Euribor 3 months + 1.05%

10,000

600

Banca Intesa (*)(**)

15,000

2018

2024

half-yearly from 31/7/2019

Euribor at 6 months + 0.95%

2,571

Pag. 212 di 246

Banca Intesa (*)(**)

30,000

2021

2027

half-yearly from 30/06/2023

Euribor at 6 months + 1.10%

24,000

6,000

Banca Intesa (*)

20,000

2023

2028

quarterly from 31/12/2025

Euribor 3 months + 0.95% + SACE

20,000

Banca di Verona

15,000

2017

2024

quarterly from 30/06/2017

Euribor 3 months + 2%

3,275

Banca di Verona

3,000

2019

2024

quarterly from 06/08/2021

Euribor 3 months + 1.30%

1,182

Banca di Verona

5,000

2022

2027

quarterly from 27/4/2024

Euribor 6 months + 1.20%

5,000

570

Banca di Verona

5,000

2023

2028

quarterly from 04/07/2024

Euribor 3 months + 1.20%

5,000

388

Banca Popolare di Milano (*) (**)

25,000

2018

2026

quarterly from 31/03/2020

Euribor 3 months + 0.90%

11,673

4,492

Banca Popolare di Milano (*) (**)

15,000

2019

2025

quarterly from 30/09/2020

Euribor 3 months + 1.05%

6,173

3,010

Banca Popolare di Milano (*)

15,000

2023

2028

quarterly from 30/09/2023

Euribor 3 months + 1.15%

13,657

2,772

Banca Popolare Emilia Romagna (*) (**)

10,000

2019

2025

monthly from 26/09/2020

Euribor 3 months + 0.75%

4,203

2,516

Banca Nazionale del Lavoro (*)

7,500

2018

2025

half-yearly from 31/12/2019

Euribor 6 months + 1.40%

2,727

2,045

Banca Nazionale del Lavoro (*)

12,500

2018

2025

half-yearly from 31/12/2019

Euribor 6 months +1.25%

4,545

3,409

Banca Nazionale del Lavoro (*)

20,000

2022

2027

quarterly from 08/12/2023

Euribor 3 months + 1.40%

18,750

5,000

Banca Nazionale del Lavoro (*) (***)

10,000

2023

2028

quarterly from 05/10/2024

Euribor 3 months + 1.55%

10,000

625

Crédit Agricole (ex Banca Popolare Friuladria) (*) (**)

10,000

2017

2025

quarterly from 31/03/2019

Euribor 3 months + 1.30%

2,814

1,852

Crédit Agricole (ex Banca Popolare Friuladria) (*) (**)

10,000

2019

2025

half-yearly from 28/12/2020

Euribor 6 months + 1.05%

3,636

1,818

Crédit Agricole (former Banca Popolare Friuladria) (*)

10,000

2023

2029

half-yearly from 30/09/2024

Euribor 6 months + 1.35%

10,000

795

Monte dei Paschi (*)

15,000

2018

2025

half-yearly from 31/12/2019

Euribor 6 months + 0.80%

5,625

3,750

Monte dei paschi (*) (**)

20,000

2023

2028

quarterly from 30/09/2025

Euribor 3 months + 0.75% + SACE

20,000

Crediti Emiliano

5,000

2022

2027

quarterly from 16/9/2023

Euribor 3 month + 0.90%

4,494

1,043

MCC - Banca del Mezzogiorno (*)

10,000

2019

2026

quarterly from 09/11/2020

Euribor 3 month + 1.20%

4,500

2,000

MCC - Banca del Mezzogiorno (*)

15,000

2023

2028

quarterly from 30/06/2025

Euribor 3 month + 1.20%

15,000

Cassa Depositi e Prestiti (*)

20,000

2022

2027

half-yearly from 30/6/2024

Euribor 6 months + 1.55%

20,000

5,000

Mediocredito Trentino Alto Adige

3,000

2022

2026

half-yearly from 15/10/2023

0.85% fixed until 10/15/2022 - Euribor 3 months +1%

2,753

994

Volksbank

5,000

2023

2028

quarterly from 31/03/2025

Euribor 3 month + 1.60%

5,000

Total Medium/long term bank loans - variable rate

263,619

64,677

Accrued interest on medium/long term bank loans

(5)

Medium/long term bank loans - fixed and variable rate

301,005

76,859

* Loans that provide for compliance with financial covenants.

** Loan to which an interest rate swap contract is linked under which interest to be paid to the bank is fixed and equal to the value shown in the table.

*** Loan to which an interest rate collar contract is coupled, as a result of which the interest combines a long position in an interest rate cap and a short position in an interest rate floor. At the end of each reporting period, if the difference between the variable interest rate and the cap rate is positive, the cap seller pays the buyer that difference; if, however, the variable rate is lower than the floor rate, the floor seller must pay the difference between the two rates. If the variable rate reaches values between the cap rate and the cap floor, no payment is made.

Certain loan agreements provide for compliance with financial and equity covenants (expressed at consolidated Group level), as summarised below:

Pag. 213 di 246

Loan

Period

Parameter

Reference

Limit

Crédit Agricole (former Banca Friuladria)

annually

Net Debt / Net Equity

Group

≤ 2.50

annually

Net Debt / EBITDA

≤ 3.75

Crédit Agricole (former Banca Friuladria)

annually

Net Debt / Net Equity

Group

≤ 2.50

annually

Net Debt / EBITDA

≤ 4.00

Banca Intesa San Paolo

annually

Net Debt / Net Equity

Group

≤ 2.50

annually

Net Debt / EBITDA

≤ 3.75

Sparkasse - Cassa di risparmio di Bolzano

annually

Net Debt / Net Equity

Group

≤ 2.50

annually

Net Debt / EBITDA

≤ 3.75

Banca Nazionale del Lavoro

annually

Net Debt / Net Equity

Group

≤ 2.50

annually

Net Debt / EBITDA

≤ 3.75

Banca Popolare di Milano

annually

Net Debt / Net Equity

Group

≤ 2.50

annually

Net Debt / EBITDA

≤ 3.75

Crédit Agricole

annually

Net Debt / Net Equity

Group

≤ 2.50

annually

Net Debt / EBITDA

≤ 3.75

Deutsche Bank

annually

Net Debt / Net Equity

Group

≤ 2.50

annually

Net Debt / EBITDA

≤ 3.75

Monte dei Paschi di Siena

annually

Net Debt / Net Equity

Group

≤ 2.50

annually

Net Debt / EBITDA

≤ 3.75

Casse Centrale Banca C.R. Trentine

annually

Net Debt / Net Equity

Group

≤ 2.50

annually

Net Debt / EBITDA

≤ 3.75

BPER Banca Pop. Emilia Romagna

annually

Net Debt / Net Equity

Group

≤ 2.50

annually

Net Debt / EBITDA

≤ 3.75

MCC/Banca del Mezzogiorno

annually

Net Debt / Net Equity

Group

< 2.50

annually

Net Debt / EBITDA

< 3.75

CDP - Cassa Depositi e Prestiti

annually

Net Debt / Net Equity

Group

≤ 2.50

annually

Net Debt / EBITDA

≤ 3.75

In relation to the financial covenants established in the bond and loan agreements detailed above, the Group prudently obtained before the end of the financial year:

1. by the lenders, the covenant “holiday” for verification of the consolidated NFP/EBITDA leverage ratio for the year ended December 31, 2023, and for the cases applicable to the consolidated half-year report at June 30, 2024, with the return to contractual status at December 31, 2024;

Pag. 214 di 246

2. by the bond subscribers for the revision of the consolidated NFP/EBITDA leverage ratio financial covenant to 5.50 and the return to contractual status at December 31, 2024.

With reference to the loans granted, there are no mortgages or guarantees registered on company assets.

Bond loans

The Company had issued two fixed-rate bond loans for an original total value of Euro 90 million:

1.a first bond loan (“A”), initially issued on June 23, 2015 and subscribed by companies belonging to the US Group Prudential Financial Inc., with a value equal to Euro 50 million, to be repaid in 7 equal instalments of Euro 7.1 million, of which final maturity on September 20, 2028, with residual debt at December 31, 2023 of Euro 35.7 million; the loan is subject to a fixed interest rate of 3.70% with the application of a "margin ratchet" which provides for a gradual increase in the rate up to a maximum of 1% on the fluctuation of the NFP/EBITDA ratio of the Group. The NFP/EBITDA ratio at December 31, 2022, resulted in a rate increase from 3.70% to 4.20% for the following six-month period (from March to September 2023). Due to the NFP/EBITDA ratio at June 30, 2023, the interest rate increased from 4.20% to 4.70%, which remains valid until March 2024.

2.a second bond “B” was issued on May 24, 2019, to finance the business combination of Aquafil O’Mara Inc., and subscribed by companies belonging to the US Group Prudential Financial Inc. for a total of Euro 40 million; the terms provide for repayment in 7 annual instalments from May 24, 2023, the remaining balance of which was Euro 34.3 million at December 31, 2023; the fixed interest rate is equal to 1.87%, with the application of the same margin ratchet condition as for bond “A”. As a result of the NFP/EBITDA ratio at June 30, 2022, the interest rate remained at 1.87% until May 2023, then increased to 2.37% for the period May–November 2023 as a result of the ratio at December 31, 2022. Due to the NFP/EBITDA ratio at June 30, 2023, the interest rate increased to 2.87% until May 2024.

Pag. 215 di 246

The following table summarises the main characteristics of the aforementioned bond loans:

Bond loan

Total Nominal Value

Issue date

Maturity date

Capital portion repayment plan

Interest rate applied

Bond loan A

50,000,000

23/06/2015

20/09/2028

7 annual instalments from 20/09/2022

4.70%

Bond loan B

40,000,000

24/05/2019

24/05/2029

7 annual instalments from 24/05/2023

2.87%

Bond loans envisage compliance with the following financial covenants, as contractually defined, to be calculated on the basis of the Group’s consolidated financial statements:

Bond loan A-B

Financial parameters

Parameter

Covenant limit

Interest Coverage Ratio

EBITDA / Net financial charges

> 3.5

Leverage Ratio (*)

Net Debt / EBITDA

< 3.75

Net Debt Ratio

Net Debt / Net Equity

Minimum Net Equity threshold levels

* This indicator must be calculated with reference to the 12-month period which terminates on December 31 and June 30 for all years applicable.

The terms and conditions of the above bond loans also envisage, as is customary for financial transactions of this type, a structured series of commitments to be borne by the Company and Group companies ("Affirmative Covenants") and a series of limitations on the possibility of carrying out certain transactions, if not in compliance with certain financial parameters or specific exceptions provided for by the agreement with the bondholders ("Negative Covenants"). Specifically, there are in fact certain limitations on the assumption of financial debt, on carrying out certain investments and on acts of disposal of corporate assets. To ensure the timely and correct fulfilment of obligations arising on account of the Parent Company from the issue of securities, the companies Aquafil Usa Inc. and Aquafil SLO d.o.o. have issued joint corporate guarantees in favour of underwriters:

Pag. 216 di 246

Lease liability

The lease liability, which amounts to Euro 3,000 thousand, refers to the effects of the application of IFRS 16.

During December 2023, the existing lease agreement between Aquafil and Aquafin Holding regarding the warehouse located in San Martino Buon Albergo owned by the latter was terminated by mutual consent, leading to a decrease in the related balance.

Loans intercompany

The loan granted to the subsidiary Aquafil Jiaxing Co. Ltd. for USD 15,500 thousand (equating to Euro 14,027 thousand) was confirmed as outstanding at December 31, 2023. This loan increased by USD 6,500 thousand in early 2023.

7.15Provisions for risks and charges

The account is comprised of:

(Euro thousands)

December 31, 2023

December 31, 2022

Other provisions for risks and charges

485

Agents’ supplementary indemnity provision

830

1,083

Total

1,315

1,083

Pag. 217 di 246

The movements in “Other provisions for risks and charges” were as follows:

(in thousands of Euro)

Balance at January 1, 2023

Increases

485

Decreases

Balance at December 31, 2023

485

The amount of Euro 485 thousand recognised to “Other provisions for risks and charges” concerns the audit carried out by the Trento Finance Police, which initiated a general audit on the tax periods of 2018, 2019, 2020 and 2021, and which concluded with notification of a tax audit report (”PVC”) (as outlined in detail in the “Contingent Liabilities” paragraph). The tax audit report indicates that the findings of the auditors contain numerous aspects, which have already been accepted by the Trento Tax Agency as part of the settlement procedures for the audits concerning 2015, 2016 and 2017. It is therefore likely that, following a settlement procedure that may be activated by the Company, pursuant to Article 6(2) of Legislative Decree 218/1997, after the notification of the tax assessment, the findings could be determined in a total of Euro 1,769 thousand, thus with a potential income tax and IRAP burden for the Company estimated at Euro 485 thousand.

It should be noted that, in the PVC, penalties were not applied on the transfer pricing issues, as the documentation was deemed adequate.

The changes in the “Agents’ supplementary indemnity provision” were as follows:

(in thousands of Euro)

Balance at January 1, 2023

1,083

Increases

Decreases

(300)

Balance at December 31, 2023

830

The decrease in the provision concerns the utilisation for the payment of the indemnity to an agent, following conclusion of the agency relationship.

Pag. 218 di 246

7.16Other current and non-current liabilities

(Euro thousands)

December 31, 2023

of which current portion

December 31, 2022

of which current portion

Tax payables

1,554

1,419

Employee payables

5,258

7,083

Payables to social security institutions

1,667

1,765

VAT payables

607

Tax payables to subsidiaries

3,946

2,830

Other current and non-current liabilities

5,325

1,978

8,739

2,706

Total

18,357

15,010

21,836

15,804

The account is comprised of:

•"Tax payables" mainly include withholding taxes and other tax payables.

•the decrease in “Employee payables” mainly concerns the fact that working hours reduced during the year, in addition to the absence of bonuses as the set financial targets were not achieved.

•“Social security payables” which mainly includes the amount owed at year-end by the Company and its employees to social security institutions;

•“Subsidiaries for taxes” which entirely refers to payables to Tessilquattro S.p.A. and Bluloop S.r.l. accrued as a result of the transfer of the latter’s tax losses to Aquafin Holding S.p.A. in its role as tax consolidation entity. Specifically, in accordance with the consolidation agreement, Aquafil S.p.A. is responsible for netting between group companies and the tax consolidation entity Aquafin Holding S.p.A. In fact, an identical opposite amount has been recognised under “Tax receivables from parents” as described above.

•“Accrued liabilities and deferred income” mainly comprise:

Pag. 219 di 246

-the commercial contract with the US group Interface, involving a worldwide collaboration for supply and product development. In particular, Aquafil S.p.A. undertook an obligation until 2026 to guarantee Interface conditions of supply, against which the client, in addition to committing to annual minimum volumes, paid to Aquafil USD 24 million in advance. At December 31, 2023, this deferred revenue (recognised to deferred income) amounts to Euro 4.2 million;

-the deferral of the portion pertaining to future years of the contribution obtained from the European Union for the "EFFECTIVE” research project, described in the Directors’ Report and also commented on in the notes above. The original deferred income recognised for Euro 1.7 million which concerns the overall contribution recorded at the signing date of the agreement with lending banks (with counter-entry to Other non-current assets), amounts to Euro 673 thousand at December 31, 2023. It should be noted that from 2019 onwards, costs relating to the EFFECTIVE project have been capitalised under intangible assets in progress for the portion eligible under IAS 38. The residual contribution concerning the capitalised portion is recognised to the income statement from the present year, as the asset is capitalised and therefore amortised.

7.17Trade payables

The account is comprised of:

(Euro thousands)

December 31, 2023

December 31, 2022

Trade payables - suppliers

65,699

75,648

Intercompany trade payables

62,230

70,824

Advances and other payables

346

368

Total

128,275

146,840

At December 31, there were no debts falling due over five years in the balance sheet.

Pag. 220 di 246

Intercompany trade payables refer to payables deriving from purchases related to the production cycle and are as follows:

(Euro thousands)

December 31, 2023

December 31, 2022

AQUAFIL ASIA PACIFIC CO.

1,543

AQUAFIL UK LIMITED

3,030

1,831

AQUAFILSLO d.o.o.

22,836

37,230

AQUAFIL OCEANIA Pty Ltd

103

101

AQUAFILCRO d.o.o.

4,732

4,399

AQUASPACE S.p.A

TESSILQUATTRO

20,346

14,600

AQUAFIL Usa Inc.

AQUAFIN HOLDING S.p.A

184

AQUAFIL TEXTIL SANAYI

AQUAFIL China

9,243

12,454

AQUAFIL BENELUX FRANCE BVBA

LA TORRE SOCIETA' AGRICOLA

Total

62,230

70,824

The decrease in trade payables is mainly due to the lower production costs (in particular raw materials and energy), as outlined in paragraphs 8.3 and 8.4. It is noted that at year-end approx. Euro 2.6 million had been ceded under confirming mode at market conditions. Considering that the relative financial cost is not significant, the nature of these payables remains commercial.

7.18Current tax payables

For 2023, the payable for current taxes was not recognised in relation to the position to the Tax Authorities for IRAP, as the net production value was negative.

For the year under review, Aquafil S.p.A. calculated IRAP by the method established for financial companies, in light of the new legislation on financial holding companies, at the increased rate of 4.65%. For further information, reference should be made to Note 8.14 below.

Pag. 221 di 246

8.NOTES TO THE INCOME STATEMENT

8.1Revenues

The breakdown of revenues is shown below:

(in thousands of Euro)

2023

2022

EMEA

432,730

554,130

North America

31,159

82,209

Asia and Oceania

54,554

57,975

Rest of the world

Total

518,444

694,343

In accordance with IFRS 15, revenues include, as a direct reduction in their amount, cash discounts, which amount to Euro 2,368 thousand in 2023.

The decrease is due both to a reduction in quantities sold during the year and a decrease in sales prices, due to their alignment with the lower costs for raw materials and other production factors, mainly energy and transport.

8.2Other revenues and income

“Other revenues and income" amount to Euro 2,551 thousand and refers mainly to:

- Euro 2,008 thousand for the energy and gas tax credit subsidy granted during the year for electricity-intensive and natural gas-intensive companies that have met the requirements under the regulations (Decree Law No. 4 of 27/1/2022 and subsequent, Law No. 197, Decree Law No. 34 of 2023);

Pag. 222 di 246

- Euro 224 thousand regarding the portion in the year of the grant recognised by the EU for the "Effective" research project;

- Euro 92 thousand related to the tax credit accrued on the research and development expenses incurred in 2023 and determined as per Article 1, paragraph 35 of Law No. 190 of December 23, 2014;

- Euro 227 thousand for the tax credit on the purchase of capital goods, the purchase of “superbonus” credits and for the contribution recognised by the EU for the "Cisuflo" project.

8.3Raw material costs

The account includes raw materials and consumables costs, in addition to changes in inventories. This decrease reflects the price of oil and of its derivatives, in addition to the lower cost of utilities and prices for caprolactam processes and for polymer purchases. In Europe, the price of raw materials recorded sudden and sharp declines, hitting a low in August. This effect led to a significant misalignment between the unitary values of stock emerging in 2022 and the market price of raw materials, with a temporary although significant impact on the company and Group margin. The account is comprised of:

(Euro thousands)

2023

2022

Raw material purchases

277,111

410,236

Ancillaries and consumables

5,273

6,910

Purchases of other materials

148,992

148,961

Other charges

796

645

Change in inventories

8,553

(11,759)

Total

440,724

554,993

Pag. 223 di 246

The raw material costs incurred in the year include costs from the following subsidiaries and associates:

(Euro thousands)

December 2023

December 2022

AQUAFIL ASIA PACIFIC CO.

4,625

AQUAFIL ENGINEERING GMBH

AQUAFIL UK LIMITED

7,084

6,725

AQUAFILSLO d.o.o.

179,894

198,486

AQUAFILCRO d.o.o.

29,901

45,664

TESSILQUATTRO

90,277

83,457

AQUAFIL China

30,629

36,148

Total

342,415

370,480

8.4Service costs

The account is comprised of:

(Euro thousands)

2023

2022

Transport, shipping & customs

6,863

16,802

Electricity, propulsive energy, water and gas

13,298

30,855

Maintenance

1,946

2,183

Services for personnel

3,017

2,365

Technical, ICT, commercial, legal & administrative consultancy

8,044

7,271

Insurance

1,456

1,603

Marketing and advertising

3,757

4,654

Cleaning, security and waste disposal

481

Warehousing and external storage

2,657

2,554

External processing

2,712

4,394

Statutory auditors fees

146

147

Other service costs

1,421

1,351

Rentals and hire

385

528

Total

46,183

75,190

Service costs from related parties amount to Euro 1,138 thousand and mainly relate to processing costs undertaken by Aquafil SLO d.o.o for Euro 141 and to commissions from Aquafil Benelux France B.V.B.A. for Euro 645 thousand, from Aquafil Oceania for Euro 133 thousand and from Aquafil Tekstil Sanayi Ve Ticaret A.S. for Euro 46 thousand.

Pag. 224 di 246

Compared to 2022, the significant decrease in the year is highlighted, as a result of the highly unstable political and economic situation for Europe, in the costs of utilities in view of the market developments for these production factors and for transport.

The general decrease in service costs follows the lower production volumes, and was particularly significant in terms of transport and utility costs which, as outlined in the Directors' Report, significantly declined during 2023.

8.5Labour costs

These costs are broken down as follows:

(Euro thousands)

2023

2022

Salaries and wages

24,657

23,899

Social security contributions

8,150

8,175

Post-employment benefits

1,545

1,519

Other personnel costs

1,135

179

Director fees

1,394

3,960

Total

36,883

37,733

No top management bonuses were recognised as the operating objectives were not achieved. The decrease in wages and salaries is also due to the lower hours worked in 2023.

The number of employees, broken down by category, is as follows:

December 31, 2023

December 31, 2022

Average 2023

Average 2022

Executives

Managers

White-collar

149

151

150

149

Blue-collar

295

286

305

301

Total

515

512

530

524

8.6Other operating costs and charges

Pag. 225 di 246

These costs are broken down as follows:

(Euro thousands)

2023

2022

Taxes, duties & sanctions

251

259

Losses on asset sales

Penalties on supply contracts

Other operating charges

444

616

Total

695

884

The item "Taxes, levies and penalties" mainly includes the costs for local taxes and taxes not on income.

“Other operating charges” mainly include the share related to the provisioning agreement with Domo Engineering Plastics and costs related to previous years.

8.7Amortisation, depreciation and write-downs of tangible and intangible assets

The account is comprised of:

(Euro thousands)

2023

2022

Amortisation of intangible assets

3,444

3,624

Depreciation of property, plant & equipment

5,307

5,609

RoU depreciation

1,716

1,478

Total

10,466

10,711

Amortisation and depreciation in 2023 is substantially in line with the previous year.

The figure includes the straight-line amortisation and depreciation in the period, in addition to the amortisation on the bio-caprolactam project initiated in the previous year.

Pag. 226 di 246

8.8Provisions and write-downs

The account is comprised of:

(Euro thousands)

2023

2022

Reversal of doubtful debts provision

782

Provisions for risks and charges

(9)

(360)

Total

773

(360)

“Other provisions for risks and charges” principally include the accrual for agents’ supplementary indemnities. The “Release of the doubtful debt provision” follows an analysis of the recoverability of trade receivables, as outlined at paragraph 7.7.

8.9Costs for internal work capitalised

This item, totalling Euro 1,565 thousand at December 31, 2023, mainly concerns the capitalisations made with regards to projects for the improvement and technological upgrading of existing plant and equipment.

8.10Investment income (charges)

The account mainly includes the dividends received from the subsidiaries, respectively for Euro 4,523 thousand from Aquafil Asia Pacific Co. Ltd and for Euro 12,520 thousand from Aquafil Synthetic Fibres.

In addition, the account includes the full write-down of the investment in the subsidiary Aquafil Tekstil Sanayi for Euro 557 thousand.

Pag. 227 di 246

8.11Financial income

The account is comprised of:

(Euro thousands)

2023

2022

Financial income receiv. from Group companies

1,744

633

Other interest

Interest income current accts.

444

Derivative financial instruments

4,506

Total

2,188

5,219

”Derivative financial instruments” decreased on the previous year, which benefited from the positive effect of the change of fair value derivatives (IRS). At December 31, the Mark to Market was positive for Euro 1,354 thousand, although with a reduction on the previous year of financial charges of Euro 2,709 thousand. The decrease is substantially due to the reduction in the fair value of derivatives, due to the movement in the interest rate curve. As previously illustrated, “hedge accounting” was not applied to these derivatives as, although entered into for hedging purposes, have been considered for accounting purposes and consistently with the past, as non-hedging instruments (and therefore the relative fair value is recognised in the income statement), as it is very complex to prepare the mandatory hedging relationship.

The increase in Interest income on current accounts for Euro 444 thousand derives from the current account interest rates applied by the various banks.

Interest income on loans from subsidiaries, parent companies, related companies are as follows:

(Euro thousands)

2023

2022

AQUAFIL UK LIMITED

149

AQUAFILSLO d.o.o.

1,458

445

AQUALEUNA G.m.b.H.

CENON SRO

AQUAFIL JAPAN

BLULOOP

Total

1,744

633

Pag. 228 di 246

8.12Financial charges

The account is comprised of:

(Euro thousands)

2023

2022

Interest on mortgage loans

8,922

3,145

Interest on bonds

2,570

2,705

Interest on current accounts

Bank expenses and commissions

445

263

Write-downs of derivatives and financial instruments

2,709

Interest on factoring transactions

1,254

557

Interest on commercial transactions

1,118

497

Interest to leasing companies

Interest from group companies

Other charges

Financial charges

Financial charges to group companies

101

Interest expenses to Group companies

1,024

431

Write-downs of fixed assets – group companies

691

1,435

Total

19,052

9,312

The increase in “Interest charges on loans”, “Interest on factoring transactions” and “Interest on commercial transactions” is closely linked to the increase in market interest rates.

The “Write-downs of derivatives and financial instruments” was Euro 2,709 thousand, with the charge substantially due to the decrease in the fair value (Mark to Market valuation) of the derivatives, due to the movement in the interest rate curve.

The item "Write-downs of fixed assets - Group companies" includes the write-down of the loan for Euro 691 thousand from the subsidiary Aquafil UK Ltd..

Pag. 229 di 246

8.13Exchange gains and losses

The breakdown of the account is as follows:

(Euro thousands)

2023

2022

Total exchange gains

2,977

9,280

Total exchange losses

(3,324)

(8,799)

Total

(347)

481

The amount, equal to a loss of Euro 347 thousand for the year ended December 31, 2023, is the net balance between exchange rate gains and losses.

8.14Income taxes

The account is comprised of:

(Euro thousands)

2023

2022

Current income taxes

(2,158)

1,286

Deferred tax charges

4,543

(2,339)

Total

6,701

(3,625)

From the year 2018 Aquafil S.p.A. was included in the tax consolidation regime with the parent company Aquafin Holding S.p.A., which regime was interrupted in 2017 due to the merger by incorporation of Aquafil S.p.A. into Space 3 S.p.A.

The substantial difference in the treatment between current and deferred taxes, compared with the previous year, is due the reclassification of the tax consolidation charge/income within current taxes. The rationale behind this change is that the transfer of result is consequently accepted by the consolidating company, and thus in fact its current nature is validated.

Pag. 230 di 246

“Deferred taxes" is mainly composed of the following amounts:

-allocation of Euro 345 thousand in reference to the ACE benefit pertaining to 2023, which was not used due to the absence of assessable income;

-allocation of Euro 2,575 thousand in relation to the amount of non-deductible interest charges under the Income Tax law (TUIR) (formerly Article 96) remaining as a result of the calculation on the ROL for the year and surpluses related to previous periods;

-allocation of Euro 2,008 thousand (of which Euro 1,630 thousand IRES and Euro 378 thousand IRAP), in relation to the mutual agreement procedure initiated on October 4, 2023, similar to that undertaken for the 2017 tax year and as outlined in the Contingent Liabilities paragraph.

”Current income taxes” mainly concerns:

-the settlement agreement regarding the tax assessment for the 2017 tax year for Euro 187 thousand;

-the audit initiated on September 7, 2023 by the Trento Finance Police for the tax years 2018, 2019, 2020 and 2021, which concluded with the notification on December 11, 2023 of a tax assessment report (”PVC”). From the tax assessment report it is presumable that, in accordance with the criteria already used by the Trento Office on the same adjustments contested in previous tax periods, following a settlement procedure that may be activated by the Company, pursuant to Article 6(2) of Legislative Decree 218/1997, after the notification of the tax assessment, the observations could be determined in a total of Euro 1,769 thousand, thus with a potential income tax charge of Euro 425 thousand and IRAP charge of Euro 61 thousand;

-the withholding tax, amounting to Euro 1,611 thousand, in relation to dividends received during 2023 from the subsidiaries Aquafil Asia Pacific Co. Ltd and Aquafil Synthetic Fibres;

-the tax consolidation income of Euro 4,452 thousand, due to the transfer of the tax benefit to the consolidating company Aquafin Holding under the existing tax consolidation agreement.

For the current financial year, it should be noted that Aquafil S.p.A. has calculated IRAP tax, for the purpose of deferred taxes, in accordance with the new rules envisaged for non-financial holding companies (“industrial holdings”) as defined by Article 162-bis, paragraph 1, letter c.1) of

Pag. 231 di 246

Presidential Decree 917/86 ("Income Tax Law") and as set out in Article 6 of Presidential Decree 446/1997 and by Provincial Law 21/2015, Article 16, paragraph 1-bis, letter b), Legislative Decree 446/97, Article 1, paragraph 11-bis, for which an increased rate of 4.65% is envisaged.

The table below shows the reconciliation of the theoretical rate of income tax with the actual impact on the result:

(in thousands of Euro)

2023

2022

Profit/(loss) before taxes

(12,342)

19,556

Tax calculated on applicable rate

(3,536)

28.65%

5,603

28.65%

Total current income taxes

(2,158)

1,286

Total deferred taxes

(4,543)

2,339

Total effective taxes

(6,701)

3,625

Change tax rate

3,165

1,977

Permanent decreases

(4,700)

(1,954)

Permanent increases

671

889

Prior year taxes

683

647

Other taxes (WHT - ACE)

1,611

(379)

Other changes

(1,430)

(1,181)

It should be noted that, based on estimates made at that time, the Aquafil Group did not fall within the scope of application of the rules of Pillar 2, the goal of which is to ensure that large multinationals pay income taxes of at least 15%.

Pag. 232 di 246

9. Non-recurring items

The account is comprised of:

(in thousands of Euro)

2023

2022

Raw material purchases - extraordinary

(134)

Expansion costs of the Aquafil Group

(575)

(406)

Tax, administrative and extraordinary technical consultancy

(133)

(122)

Other services - extraordinary

(66)

Bonuses and incentives

(1,135)

(179)

Other charges - extraordinary

(97)

(255)

Total non-recurring costs

(2,142)

(961)

Other extraordinary income

Non-operating income and charges

(2,142)

(922)

"Expansion costs of the Aquafil Group" refer to costs incurred for the activities and projects related to the expansion of the Group, in particular in India.

“Tax, administrative and extraordinary technical consultancy” refers to costs for fiscal consulting incurred in relation to the joint audit consequent to the position paper received by Aqualeuna G.m.b.H. on the tax audit by the “Bundeszentralamt fur Steuern” office responsible for intercompany transactions in the region for the years 2017, 2018 and 2019.

“Other extraordinary charges “refer to costs related to previous years.

“Bonuses and incentives” mainly concerns redundancy incentives.

The percentage of the non-recurring items of the result, of cash flows, of the equity position, and of the net debt, are reported below.

(in thousands of Euro)

2023

of which non-recurring

Net Profit

(5,641)

(2,142)

37.96%

Net cash flow in the year

20,033

(2,142)

(10.69)%

(*)

Total assets

643,625

0.00%

(**)

Net financial debt

(316,934)

(2,142)

0.68%

(*)

* Amount paid in the year of non-recurring income statement items.

Pag. 233 di 246

** Amount of non-recurring income statement items yet to be paid at year-end.

10.Net financial debt

Below is the breakdown of the net financial debt as at December 31, 2023, determined in accordance with ESMA/2013/319 Recommendations:

NET FINANCIAL DEBT

(Euro thousands)

At December 31, 2023

At December 31, 2022

A. Cash

72,746

52,713

B. Cash and cash equivalents

C. Other current financial assets

1,974

5,013

D. Liquidity (A) + (B) + (C)

74,719

57,725

E. Current financial debt (including debt instruments but excluding the current portion of non-current financial debt)

(2,354)

(1,106)

F. Current portion of non-current financial debt

(91,512)

(74,019)

G. Current financial debt (E + F)

(93,865)

(75,126)

H. Net current financial debt (G - D)

(19,146)

(17,400)

I. Non-current financial debt (excluding current portion and debt instruments)

(240,397)

(211,237)

J. Debt instruments

(57,391)

(70,301)

K. Trade payables and other non-current payables

L. Net non-current financial debt (I+J+K)

(297,788)

(281,538)

M. Total financial debt (H+L)

(316,934)

(298,938)

The following table presents the items included in the net debt regarding related parties:

(thousands of Euro)

December 31, 2023

December 31, 2022

E. Current financial receivables

950

M. Other non-current financial payables

(14,027)

(8,438)

The net financial reconciliation between the beginning and end of the year is presented below. The effects indicated include the currency effects.

(in thousands of Euro)

current portion

non-current portion

Net Debt at December 31, 2022

(298,938)

52,051

(350,989)

Net cash flow in the year

20,033

Contracting/reclassification of current financial receivables

(950)

New bank loans and borrowings

(100,000)

(4,762)

(95,238)

Repayment / reclass. bank loans and borrowings

71,065

New leasing loans

(1,061)

(187)

(875)

Pag. 234 di 246

Repayment / reclass. lease liability

2,462

603

1,859

Change in fair value derivatives

(2,709)

Repayments/drawdown loans to subsidiaries

(5,589)

Other changes

(1,247)

Net Debt at December 31, 2023

(316,934)

133,897

(450,831)

11.RELATED PARTY TRANSACTIONS

Transactions and balances with related parties are illustrated in the tables below

(in thousands of Euro)

Parent companies

Subsidiaries

Related parties

Total

Total book value

% on total account items

Non-current financial assets

December 2023

35,408

35,437

369,412

9.59%

December 2022

234

39,821

40,084

348,114

11.51%

Trade receivables

December 2023

275

76,324

76,632

79,395

96.52%

December 2022

305

115,258

115,597

115,825

99.80%

Current financial assets

December 2023

1,974

0.00%

December 2022

950

5,013

18.95%

Other current assets

December 2023

5,854

9,463

61.86%

December 2022

247

7,361

3.36%

Current financial liabilities

December 2023

(285)

(93,865)

0.30%

December 2022

(536)

(278)

(814)

(75,126)

1.08%

Non-current financial liabilities

December 2023

(14,027)

(1,224)

(15,251)

(297,788)

5.12%

December 2022

(830)

(8,439)

(1,358)

(10,627)

(281,538)

3.77%

Trade payables

December 2023

(184)

(61,951)

(95)

(62,230)

(128,275)

48.51%

December 2022

(70,753)

(71)

(70,824)

(146,840)

48.23%

Other current liabilities

December 2023

(3,946)

(15,010)

26.29%

December 2022

(2,830)

(15,804)

17.91%

Pag. 235 di 246

The transactions of the Company with related parties are illustrated in the table below:

(in thousands of Euro)

Parent companies

Subsidiaries

Related parties

Associates

Total

Total book value

% on total account items

Revenues

FY 2023

231

219,706

219,965

518,444

42.43%

FY 2022

250

331,756

332,085

694,343

47.83%

Raw material costs

FY 2023

(342,415)

(440,724)

77.69%

FY 2022

(370,480)

(554,993)

66.75%

Service costs and rent, lease and similar costs

FY 2023

* (2)

(1,079)

(57)

(1,138)

(46,183)

2.46%

FY 2022

(2,348)

(53)

(2,401)

(75,190)

3.19%

Labour costs

FY 2023

(95)

(36,883)

0.26%

FY 2022

(153)

(37,733)

0.41%

Other operating costs and charges

FY 2023

(26)

(695)

3.74%

FY 2022

(26)

(884)

2.94%

Financial income (charges) from investments

FY 2023

16,486

16,487

100.00%

FY 2022

183

100.00%

Financial income

FY 2023

1,744

2,188

79.70%

FY 2022

633

5,219

12.13%

Financial charges

FY 2023

(23)

(1,807)

(30)

(1,859)

(19,052)

9.76%

FY 2022

(32)

(1,967)

(9)

(2,008)

(9,312)

21.56%

The following table summarises cash flows with related parties and their percentage out of the cash flow indicated in the cash flow statement:

(in thousands of Euro)

Total cash flow statement account

of which related parties

% on total account items

Profit/(loss) for they year

(5,641)

(107,149)

1899%

Investment income/charges

16,487

16,486

100%

Financial income

2,188

1,744

80%

Financial charges

(19,052)

(1,859)

10%

Increase/(Decrease) in trade payables

(18,565)

(8,595)

46%

Pag. 236 di 246

Decrease / (Increase) in trade receivables

37,211

38,966

105%

Changes in other assets and liabilities

(2,816)

(4,491)

159%

Net changes in current and non-current financial assets and liabilities

11,034

9,691

88%

Distribution of dividends

(11,992)

(7,169)

60%

12.REMUNERATION AND BENEFITS OF THE BOARD OF DIRECTORS AND SENIOR MANAGEMENT

The remuneration and benefits in favour of members of the Board of Directors and Senior Executives and the compensations due to the members of the Board of Statutory Auditors are presented below:

Director and Statutory Auditor fees (in Euro thousands)

2023

Short-term benefits

2,954

Other long-term employee benefits

Total

2,992

Senior Executive fees (in Euro thousands)

2023

Short-term benefits

1,416

Other long-term employee benefits

115

Total

1,531

13.OTHER INFORMATION

13.1Commitments and risks

Pag. 237 di 246

Other commitments

At December 31, 2023, the parent company Aquafil S.p.A. provided sureties in favour of credit institutions in the interest of subsidiaries, companies subject to the control of the parent company and third parties for a total of Euro 25,089 thousand.

Contingent liabilities

Provided below is a list of fiscal positions and disputed defined and pending as at the balance sheet date that concern the Parent Company, Aquafil S.p.A. We are not aware of the existence of further disputes or proceedings that are likely to have significant repercussions on the Group’s economic and financial situation.

(i)Tax audit Aqualeuna G.m.b.H.

2013 – 2015 and 2016 – 2017 Periods

The company Aqualeuna G.m.b.H. was involved in a tax audit by the competent German federal tax office in Leuna concerning inter-company transactions. On July 15, 2021, the company was notified by the German tax administration’s audits unit in Halle of the conclusion of the tax audits for fiscal years 2013-2017. The upward adjustment to Aqualeuna's assessable income concerned:

(a) for the period 2013-2015, not subject to international cooperation with the Italian administration, for Euro 735 thousand, offset by the equal utilisation of the company's prior year losses;

recognised the amount of Euro 410 thousand upon closure of the reimbursement file and therefore without impact on the consolidated results;

Pag. 238 di 246

(c) for the 2017 period, not subject to joint audit by the two administrations, upward adjustment for Aqualeuna of Euro 3.7 million and the submission of a request to recognise a decrease in IRES and IRAP assessable income, filed by Aquafil on January 21, 2022. Given the use of past losses of Aqualeuna, the increased taxes for the company for 2013-2017 came to Euro 207 thousand. Aquafil, on January 21, 2022, forwarded to the International Dispute Resolution and Prevention Office of the Large Taxpayers Central Directorate in Rome of the Tax Agency a special Application pursuant to Article 31-quater, paragraph 1, letter c) of Presidential Decree September 29, 1973, No. 600 for the unilateral recognition for IRES and IRAP purposes of the downward adjustment of income against the upward adjustment amounting to Euro 3,733 thousand made in Germany for the stated tax period; the initiation of the procedures provided for in Arbitration Convention No. 90/436/EEC of July 23, 1990, on the elimination of double taxation in the case of adjustments to profits of associated companies. On December 22, 2022, the aforementioned International Dispute Resolution and Prevention Office notified the Company that the mutual agreement procedure pursuant to Article 6 of Arbitration Convention No. 90/436/EEC resulted in an agreement being reached between the competent Italian and German Authorities on the basis of which it was agreed to confirm the adjustments made by the German tax authorities in the amount of Euro 3,733 thousand and to recognise Aquafil the same amount as a corresponding adjustment by the Italian tax authorities.

The German competent authority sent a similar notice to Aqualeuna.

Both companies have sent acceptance of the agreement in relation to the year 2017 to their respective competent authorities.

2018 - 2019 Period

Pag. 239 di 246

For these tax periods, total recoveries therefore result in for German tax purposes for Aqualeuna the reabsorption of the tax losses and positive taxable income for the excess of Euro 282 thousand for 2018 and of Euro 81 thousand for 2019.

In view of that outlined, it is considered that there are no additional contingent liabilities on the part of Aquafil S.p.A. and the Aquafil Group to be covered by an allocation to a risk provision.

(ii)“ACE” tax deduction appeal

On November 2, 2023, the Large Taxpayers Central Directorate responded to the ACE petition filed by the Company on July 4, 2023 with reference to the 2022 tax year, expressing a favourable

Pag. 240 di 246

opinion regarding the request for the disapplication of the anti-avoidance rules set forth in Article 10, paragraphs 2 and 3 (a) and (c) of the new ACE Decree.

The application was submitted in continuity with previous tax periods (2019, 2020 and 2021), in relation to which the Central Directorate issued a favourable opinion.

(iii)Suspension of VAT refund – 2019 fiscal year

On June 22, 2020, the Company filed for a VAT refund in the amount of Euro 488,147 by way of the 2020 tax return (for 2019 income). The reason given was the lower excess credit not transferable for the payment of group VAT (as per Articles 33 and 73 of Italian Presidential Decree 633/1972). On June 17, 2022, the Tax Office, after lengthy investigative and documentary verification activities, notified the Company of the recognition of the 2019 annual VAT credit requested for reimbursement in the amount of Euro 488 thousand, and also in June settled the entire amount, including interest, as required by law.

(iv)Invitation 5-ter of Legislative Decree No. 218/1997 – VAT for 2017

Based on this act, which contests the VAT payable of Space3 S.p.A. (a company that incorporated Aquafil during the tax period of 2017 as part of the listing operation), a payment totalling Euro 658,399 is demanded, of which: VAT: Euro 301 thousand (which does not take account of the refunded VAT), sanctions: Euro 296 thousand (equal to 1/3 of the legal total) and interest of Euro 60 thousand (calculated through November 30, 2023).

At present, the appeal filed with the Trento Office is still under way. Should the disputes and observations filed by the Company not be upheld, the Trento Office will likely issue an

Pag. 241 di 246

assessment notice that includes the VAT credit refunded, which, in such case, will be challenged by the Company.

At present, therefore, any quantification of contingent liabilities is considered premature.

(v)Initiation of audit for direct taxes on 2016, 2017, 2018 and 2019 tax years

Total IRES and IRAP recoveries settled amounted to Euro 1,016 thousand, resulting in higher IRES of Euro 279 thousand, higher IRAP of Euro 13 thousand and interest of Euro 3 thousand.

On May 15, 2023, the case was initiated, in which the disputed aspects were highlighted, in relation to which the Office reserved the right to make the appropriate evaluations.

On September 4, 2023, while reaffirming the legitimacy of its conduct, and solely in order to avoid long and exhausting litigation, the Company reached an agreed settlement for corporate income tax (IRES) and for the regional IRAP tax, in line with what was done for the 2016 tax period. The final settlement, which did not entail any payment to the tax authority due to the offsetting against the period's losses, amounts to Euro 187 thousand.

Pag. 242 di 246

i.transfer pricing issue for the alleged failure to rebill ICT costs to foreign subsidiaries, totalling Euro 2,189 thousand;

ii.transfer pricing issue for failure to invoice interest income to foreign subsidiaries, totalling Euro 667 thousand;

iii.costs and deductions improperly deducted totalling Euro 21 thousand.

It should be noted that, in the PVC, penalties were not applied on the transfer pricing issues, as the documentation was deemed adequate.

13.2 Significant events after December 31, 2023

1.On January 12, 2024, Aquafil S.p.A. received a new unsecured loan in the amount of Euro 10 million from Banca Popolare di Sondrio. The loan is backed by SACE “SupportItalia” guarantee at the all-in Euribor 3-month + 90 bps variable cost, 57-month term of which 24 months grace-period.

2.The following financing was settled by the Company using surplus cash on hand:

Pag. 243 di 246

-on January 30, 2024, syndicate loan received from BCC Verona e Vicenza and the ICCREA Group with a residual balance of Euro 2,626 thousand;

-on January 31, 2024, loan received from Intesa Sanpaolo with a residual balance of Euro 2,571 thousand;

-on February 8, 2024, loan received from BCC Verona e Vicenza with a residual balance of Euro 1,000 thousand;

3.On January 10, 2024, the shareholders of Poly-Service, in extraordinary session, approved an increase in share capital in the amount of Euro 200 thousand, by creating 200,000 new shares with a par value of Euro 1 each, and set the conditions and terms of the capital increase with the new shares issued at par, i.e. Euro 1 per share.

It is noted that all shares were fully subscribed:

-by the company Politecnici for up to 110,000 shares on payment of Euro 110,000 on January 10, 2024;

-by Aquafil S.p.A. for up to 90,000 shares on payment of Euro 90,000 thousand on January 18, 2024.

The subscriptions have been fully paid, and the final completion of the capital increase for Euro 200,000 is highlighted, increasing the capital from Euro 10,000 to Euro 210,000.

Pag. 244 di 246

13.3 Disclosure as per Article 1, paragraph 125 of Law No. 124 of August 4, 2017

With regards to that required by Article 1, paragraph 125 of Law 124/17, the Company recorded the following in 2023:

i) Euro 84 thousand relating to the sale of the external electricity distribution network produced by the photovoltaic plants;

ii) Euro 411 relating to training grants for Aquafil S.p.A.;

iii) Euro 2,008 thousand for the energy and gas tax credit subsidy granted during the year for electricity-intensive and natural gas-intensive companies that have met the requirements under the regulations (Decree Law No. 4 of 01/27/2022);

iv) Euro 92 thousand related to the tax credit accrued on the research and development expenses incurred in 2023 and determined as per Article 1, paragraph 35 of Law No. 190 of December 23, 2014;

v) Euro 224 thousand related to the grant recognised by the EU for the "Effective" research project (portion in the year of the grant);

vi) Euro 22 thousand for the tax credit on the purchase of capital goods;

Pag. 245 di 246

vii) Euro 92 thousand for the contribution recognised by the EU for the "Cisuflo" project (portion in the year of the grant);

viii) Euro 114 thousand relating to the transfer of the “superbonus” tax credit.

With regards to any subventions, contributions or other financial benefits received by the Company in 2023 from the Tax Agency, reference should be made to the preceding paragraphs covering the tax items.

Proposal to allocate profits or for the coverage of losses

Considering the financial and equity position of the Company, we propose to cover the net loss of Euro 5,641,004 through utilisation of the Extraordinary Reserve.

Attachment 1 - Disclosure pursuant to Article 149 of the Consob Issuer’s Regulation

Company providing service

Recipient of service

Type of services

Fees 2023

PwC S.p.A.

Aquafil S.p.A.

Audit separate financial statements

147,370

Total Audit services provided in 2023 to Aquafil S.p.A. by audit firm

147,370

PwC S.p.A.

Aquafil S.p.A.

Audit of the statement of the 2022 research and development costs for the purposes of the tax credit Law 145/18

4,800