Group, FY2025 financial report

Consolidated Annual Financial Report

2025

Table of Contents

Summary

Letter to Shareholders 4

Directors' report 6

Introduction 6

History of the Energy Group 6

Group Structure and consolidation scope 7

Governance structure and company ownership 7

Analysis of the Group's situation, performance, and operating results 8

Significant events of the year 9

Overall summary of performance 9

Market Data and Products 9

Internal Organizational Structure 10

Economic, Equity, and Financial Position 11

Financial indicators 15

Main risks and uncertainties 16

Company organisation 18

Information on Environmental Management 18

Information regarding relations with personnel 18

Research and Development 19

Sustainability 19

Related Party Transactions 19

Outlook 19

Branches 20

Results for the fiscal year 20

Consolidated Balance Sheet 21

Consolidated Profit and loss account 24

Consolidated cash flow statement, indirect method 27

Notes to the cash flow statement 28

Introduction to the Notes to the Financial Statements 29

Information on the composition of the corporate group 29

Balance Sheet - Assets 41

Fixed Assets 41

Current assets 47

Prepayments and accrued income 51

Capitalised financial charges 51

Balance Sheet - Liabilities 51

Net Equity 52

Provisions for Risks and Charges 55

Employees' leaving entitlement 56

Payables 56

Accrued liabilities and deferred income 59

Profit and loss account 59

Production revenues 60

Production Costs 61

Financial Income and Expenses 63

Amount and nature of individual revenue/expense items of exceptional magnitude or significance 63

Other Information 63

Employment Data 64

Fees, advances, and receivables granted to directors and statutory auditors, and commitments undertaken on their behalf 64

Remuneration to the statutory auditor or auditing firm 64

Commitments, guarantees, and contingent liabilities not reflected on the balance sheet 64

Information on Transactions with Related Parties 64

Information on off-balance-sheet arrangements 64

Information on significant events occurring after the end of the fiscal year 64

L e t te r to Share hol de rs

Dear Shareholders,

First and foremost, I would like to express my sincere gratitude for the trust and support you continue to show toward the Energy Group. For us, 2025 marked the beginning of a gradual return to stability following the challenges we faced in 2024. The actions taken last year to strengthen the Group's operational and commercial structure have begun to yield tangible results, enabling us to significantly improve our key economic and financial indicators.

Despite a market environment that remains challenging for the renewable energy and energy storage sectors, the Group has demonstrated adaptability and resilience, laying a solid foundation for sustainable growth in the coming years.

2025 was a year of consolidation and gradual recovery in profitability for the Energy Group:

• Consolidated financial results: sales revenue stood at €29.8 million, down from €37.2 million in 2024, reflecting a market still characterized by caution in investment. Despite the decline in revenue, the Group improved its economic performance. EBITDA returned to positive territory, reaching €0.8 million (3% EBITDA margin) compared to -€16.0 million (-43%) in 2024. It should be noted that the 2024 fiscal year was significantly impacted by a major write-down of inventory value, which was necessary primarily to realign the value of certain assets with market value. Net loss for the year was -€2.5 million, an improvement over the -€17.6 million of the previous year, though still not in positive territory. This result was achieved thanks to an increase in margins and the value added provided to customers.
• Strategic investments: we continued to invest in areas we consider fundamental for future development, with a particular focus on Commercial & Industrial (C&I) storage systems and high-value-added projects in energy storage systems and related services, as well as commercial development in the DACH region.
• Innovation, diversification, integration: we continued efforts to strengthen our presence in the Italian C&I market and across the EMEA region, and we advanced the development of integrated products and services within the Energy Group, leveraging internal expertise and synergies among companies.
• Sustainability: We continue to integrate ESG principles into corporate management and product development, building on the path we began with the publication of our first Sustainability Report. Future Objectives

  Looking ahead to 2026 and beyond, the Energy Group intends to continue its path of growth and competitive strengthening through several key strategic priorities:

• International Expansion: We will continue to expand into Central and Northern European markets, with a particular focus on the DACH and Dutch regions.
• Development of XL solutions: we will strengthen our Extra Large Energy Storage business while maintaining our presence in the Small & Large segment.
• Technological Innovation: We will invest in and consolidate our production processes, know-how, and innovation.
• Cloud and engineering services: We will further develop our cloud platform and the application of artificial intelligence in after-sales processes and core technology.

• Strategic partnerships: We will intensify collaboration with strategic partners to reach a broader customer base, with a focus on servitization and energy efficiency.

• Financial management: We will use the tools at our disposal to better manage market dynamics and optimize inventory.

In conclusion, 2025 marks a new milestone for the Energy Group on its path to recovery and diversification. We have strengthened the Group's industrial and technological foundations, expanding our expertise and international presence, broadening our technological portfolio, and extending our market reach.

I would like to express my sincere gratitude to all employees, managers, and partners who contribute to the

Group's development every day with passion and professionalism.

On this foundation, we look to the future with confidence and determination, ready to seize the opportunities presented by the energy transition and to continue creating sustainable value for our shareholders and for the entire ecosystem in which we operate.

Sincerely,

Alessandro Granuzzo, Chairman of Energy S.p.A.

D i re c tors ' re port

Prepared in accordance with Article 2428 of the Italian Civil Code. Period from January 1, 2025, to December 31, 2025.

Introduction

Dear Shareholders,

The financial statements submitted for your approval describe the Group's financial and equity performance during the 2025 fiscal year. Based on the results contained therein, the financial statements show a net loss for the year of €2,484,073, reflecting the challenges faced during the fiscal year.

This report concerns the analysis of operations, in accordance with the provisions of Article 2428 of the Italian Civil Code, and serves to provide an overview of the Group's situation and the performance of operations for the fiscal year, with particular regard to costs, revenues, and investments. It is an integral part of the consolidated financial statements as of December 31, 2025, which have been audited by KPMG.

It should be noted that the consolidated financial statements as of December 31, 2025, were prepared in accordance with the provisions of the Italian Civil Code, in accordance with Italian accounting standards, and in compliance with applicable tax regulations.

History of the Energy Group

The Energy Group's journey began in 2013 with the founding of Energy S.r.l. in Rovereto (Trento). Initially conceived as an Innovative Startup, the company focused on the promising market for energy storage systems for the residential sector and, after about a year of research into innovative technologies for residential systems, launched the technical adaptation, marketing, and after-sales support of photovoltaic electricity storage systems. In 2020, Energy obtained the status of Innovative SME and took a significant step forward by expanding its offering with the launch of the zeroCO2® product line, designed for both the residential and industrial markets. Starting in 2021, the range of products offered was expanded, and the company's commercial presence was further extended, both in Italy and abroad.

In 2022, Energy S.r.l. became Energy S.p.A. and completed its listing on the Euronext Growth Milan (EGM) market of Borsa Italiana. The IPO enabled the company to raise significant capital, intended to pursue increasing vertical integration and consolidate its position as a full system integrator in the BESS sector. On May 23, 2023, Energy established the subsidiary Energyincloud s.r.l. (EiC), through which, in July 2023, it completed the acquisition of the business unit of Cloud Computing s.r.l., integrating advanced technologies for the remote control and management of energy production, storage, and consumption systems.

In addition, in May 2023, the affiliate Pylon LifeEU s.r.l. was established-in partnership with Pylon Technologies Europe B.V.-for the research, development, and manufacture of lithium-ion batteries for stationary energy storage.

On June 7, 2024, Energy S.p.A. completed the acquisition of 90% of Enermore S.r.l. - which subsequently changed its name to Energyonsite S.r.l. - a company specializing in consulting, design, production, installation, and maintenance of complex energy production and storage systems. This acquisition marked the formation of the Energy Group, a full-system technology manufacturer and leader in energy storage systems, as well as a provider of cloud and engineering services.

In November 2024, Energy S.p.A. acquired an additional 13.5% stake in the share capital of its subsidiary EnergyInCloud S.r.l. The transaction reinforces the Energy Group's strategy in providing advanced services for the remote control and management of energy production, storage, and consumption systems.

On July 18, 2025, Energy S.p.A. established the newco Energyonsite GmbH, headquartered in Munich, dedicated to the German market, and in November 2025 acquired the remaining 10% of the shares in Energyonsite GmbH held by the minority shareholder, thereby gaining 100% ownership.

Group Structure and consolidation scope

The Group's structure as of December 31, 2025, is as follows:

The companies included in the scope of consolidation are Energy S.p.A. (hereinafter also "Parent Company") and the subsidiaries Energyonsite S.r.l., Energyincloud S.r.l., and Energyonsite GmbH (hereinafter also "subsidiaries" or "Controlled Companies").

The investment in the associate Pylon LiFeEU S.r.l., over which significant influence is exercised but which is not subject to control, has been accounted for using the equity method.

Governance structure and company ownership

The Energy Group's mission is to contribute significantly to a more efficient, sustainable, flexible, and resilient energy management system through technologically advanced solutions and value-added services-thereby playing an active role in mitigating climate change and driving the energy transition, while generating value for all stakeholders. This is achieved by maximizing self-generation of electricity, actively contributing to grid stability, and offering goods and services aligned with market needs.

Regarding Energy's capital structure, the following events occurred during 2025:

• On June 9, 2025, the Company announced the filing of its articles of incorporation following the

  cancellation of 3,792,000 "Price Adjustment Shares" (PAS, third and final tranche)

• On November 14, 2025, the Company executed the purchase agreement for 10% of the shares of Energyonsite s.r.l. held by the minority shareholder, thereby gaining 100% ownership of the shares.

  The ownership structure of Energy S.p.A. as of December 31, 2025, is as follows:

  Shareholder Common Shares

  % of share capital

  Freman Holding S.r.l.*	10,506,070	19.43%
  Elmagi s.r.l.**	10,456,688	19.34%
  Euroguarco S.p.A.	10,278,222	19.01%
  Vee Holding s.r.l.***	10,270,638	18.99%
  RPS S.p.A.	4,166,500	7.70%
  Market	8,398,462	15.53%
  Total	54.076.580 100,00%

  *Company attributable to: Andrea Taffurelli, Executive Director of the Board of Directors of Energy S.p.A.; the Common Shares include 48,000 shares held by Taffurelli under a stock option plan (2023)

  **Company attributable to: Davide Tinazzi, Chief Executive Officer of Energy S.p.A.;

  the Common Shares include 40,654 shares held by Tinazzi under the stock option plan (2023)

  ***Company wholly attributable to Sun Hongwu

  The Parent Company's corporate governance structure is based on a traditional organizational model and consists of the following bodies:

• Shareholders' Meeting, the body representing the interests of the general shareholder base, responsible for making the most significant decisions regarding the Company's operations, including appointing the Board of Directors, approving the financial statements, and amending the Articles of Association;

• Board of Directors - composed of 5 members, including one independent director and one CEO;

• Board of Statutory Auditors, composed of 3 standing members and 2 alternate members;

• Accounting oversight is entrusted to the independent audit firm.

  The Board of Directors plays a central role within the corporate organization. It is responsible for strategic and organizational direction and holds, within the scope of the corporate purpose, all powers not expressly reserved by law or the Articles of Association to the Shareholders' Meeting, for the purpose of carrying out the ordinary and extraordinary administration of the Company.

  The highest managerial responsibilities within the Company are assigned to the Chief Executive Officer in accordance with the powers delegated by the Board of Directors.

  The Company has an internal control system consisting of rules, procedures, and an organizational structure designed to monitor:

• the efficiency and effectiveness of business processes

• the reliability of financial information

• compliance with laws, regulations, the Articles of Association, and internal procedures

• the safeguarding of the Company's assets

  The Company has adopted and maintains an Organizational and Management Model in accordance with the requirements of Legislative Decree 231/2001.

  The Group's internal organizational structure is discussed in a dedicated section below.

  Analysis of the Group's situation, performance, and operating results

  Description of the context and results

  Energy storage systems are essential products in the energy transition from fossil fuels to renewables and are attracting significant public and private investment. The energy storage sector is part of a long-term market trend that shapes its development and potential, driven by several key factors, such as (a) increased volatility in energy prices, exacerbated by geopolitical tensions and fluctuations in the cost of natural gas and crude oil; (b) the risks of blackouts and the need to stabilize and make the grid more flexible, due in part to the increased penetration of renewables and consumption peaks resulting from the spread of electric mobility; (c) changes in the regulation of energy markets and energy-intensive entities; (d) the complementary nature of storage systems with renewable energy sources, such as wind and solar power, which are inherently intermittent; (e) the demand for electric vehicles, which, although it has grown less than expected, nevertheless entails a strategic need for charging infrastructure with advanced storage systems; (f) public incentive policies for the energy transition and energy independence; (g) the evolution of regulated and unregulated electricity markets.

  With regard to the external environment, fiscal year 2025 was negatively impacted by several factors:

• a slight decline in prices due to oversupply across the entire renewable energy sector, significantly less pronounced than that observed in 2023 and 2024

• a significant reduction in demand in the residential segment, continuing the trend from 2024

• the persistence of relatively high interest rates-albeit declining in the latter part of the year-for much of 2025

• the serious uncertainties generated by delays in regulatory definitions and the resulting uncertainty for investments

  The Group nevertheless intends to evolve and strengthen its leadership position in the energy storage sector, adapting to market dynamics and the opportunities offered by the global energy transition.

  Significant events of the year

  During the period under review, the Group continued to pursue its medium- to long-term strategy, while taking into account the changing market conditions.

• On July 18, 2025, the Parent Company established the newco Energyonsite GmbH, based in Munich, dedicated to the German market

• On November 14, 2025, Energy S.p.A. signed the purchase agreement for 10% of the shares of Energyonsite s.r.l.

  Overall summary of performance

  An analysis of the financial statements as of December 31, 2025 reveals the following:

• Consolidated revenues of €29,835,761, down due to the contraction in demand caused by the factors

  outlined in the "Description of the Context and Results" section.

• 's export share remained largely unchanged (39% in 2025, amounting to €11.6 million, versus 37% in 2024, amounting to €13.8 million).

• Significant increase in the share of revenue from the commercial and industrial segment (45% in 2025, amounting to €13.5 million, compared to 14% in 2024, amounting to €5.2 million ).

• Total gross operating margin of €791,549 (3% EBITDA margin), an improvement compared to €-15,995,458 in 2024. The 2024 margin included an inventory write-down of €9,999,773, necessary in part to realign the value of certain assets to market value.

• Conservative continuation of investments in fixed assets, specifically: the completion of the assembly line for the first battery production department, construction work on the new Gigafactory in the adjacent area, further technical developments on the cloud platform and new products.

• Product design reviews, integration of functionalities and new features, and investments aimed specifically at advancing technical developments on the cloud platform .

• Service costs substantially in line with the previous year .

• A reduction in working capital, with trade working capital amounting to €21,623,628, compared to

  €26,606,458 as of December 31, 2024.

• Net financial position worsened compared to 2024, as a result of the preceding points.

  Market Data and Products

  Range of products and services offered

  The Group offers two product categories:

• the "Small&Large ESS" category, launched in 2014, featuring energy storage systems for residential users and small-to-medium-sized industrial and commercial users

• the "Extra Large ESS" ("XL," or "C&I," commercial & industrial) category, launched in the fourth quarter of 2021 and further developed in subsequent years, for industrial and commercial users with energy storage needs exceeding 50 kW; In this area, the Company provides system integration services for large

energy storage systems (over 50 kW) based on a proprietary Energy Management System. The range is equipped with software features that also enable the activation of multi-stack and1 services. The Company offers a cloud-based intelligent ESS management service, which ensures historical data management and continuous maintenance of algorithms, in relation to which the Company continuously conducts research, development, and updates to improve the services offered and enable the use of new features.

Foreign Trade Data

During the period under review, 39% of revenues were generated abroad (EU and non-EU) and 61% in Italy. In absolute terms, foreign sales totaled €11,553,962, concentrated primarily in Central and Northern European countries. Further details can be found in the chapter Profit and Loss Account, starting on page 11 .

General Situation of the Group

The financial year under review shows a decrease in revenues compared to the previous year, in light of the facts outlined above. However, this decrease in revenues did not compromise the Group's ability to meet its obligations and continue its investments.

The Group financed working capital and investments both through operating cash flows generated by operations and by utilizing bank debt.

Consolidated equity at year-end, consisting of the sum of share capital and reserves, amounts to €45,257,043. Fixed assets amount to €32,701,705, due to increases in fixed assets related to the construction of the new adjacent building that will house the Gigafactory.

Internal Organizational Structure

As of December 31, 2025, the Energy Group had a total of 84 employees, including managing partners directly involved in company operations. The total workforce reflects an organizational structure spanning multiple companies, characterized by complementary operating models and growing integration among the Group's various entities.

During the fiscal year, 21 new hires were made, compared to 16 departures, resulting in an overall net increase. The new hires primarily filled technical, operational, and clerical roles, contributing to the strengthening of internal expertise and supporting the Group's development activities.

The workforce composition shows a prevalence of technical-administrative and operational profiles, consistent with the characteristics of the sector and the business model of the subsidiaries. In particular, the acquired entities maintain lean and highly specialized organizational structures, contributing to the development of specific skills and the consolidation of overall operational capabilities.

The gender distribution shows 67 men and 17 women, with women accounting for approximately 20% of the total workforce. This configuration reflects the significant proportion of technical and operational roles, typical of the sector, while representing an area of focus for future talent attraction and development policies.

From a demographic perspective, the Group has a relatively young workforce in core functions and greater seniority in certain specialized areas. The average age is close to 37.

1 "Multi-stack" refers to overlapping services managed in parallel, such as self-consumption, peak shaving, and grid services, based on selection criteria that automatically determine the extent to which each service is fulfilled (e.g., setting a minimum of 80% coverage for on-demand grid services to avoid penalties, ensuring a certain level of peak shaving, and directing the remainder toward self-consumption)

Overall, 2025 represents a year of organizational strengthening and consolidation of skills for the Group, with a workforce structure capable of supporting business evolution and the progressive integration among the various companies.

Economic, Equity, and Financial Position

The performance indicators provide a brief overview of the Group's performance and operating results. The performance indicators examined here are primarily of an economic nature, as detailed in the relevant section. The section titled "Economic, Balance Sheet, and Financial Position According to Management Accounting Formats" presents the balance sheet, net financial position, profit and loss account, and cash flow statement for the fiscal years 2025 and 2024, prepared in accordance with a management accounting classification used by the Board of Directors to support the Group's economic, balance sheet, and financial analysis.

Below are some management tables that the Board of Directors uses for the Group's balance sheet, economic, and financial analysis.

Profit and loss account

Turnover from sales and services for 2025 amounted to €29,835,761, representing a decrease of €7,364,178 (-20%) compared to the previous year (€37,199,939). This reduction in revenue s is fully consistent with the overall trend in the sector and, in any case, is the result of very different dynamics between the two demand segments, as shown in the tables below.

The Group's backlog as of February 28, 2026, amounts to €12.9 million, to be realized in 2026.

Consolidated EBITDA was positive at €791,549, equal to 3% of net revenue. Margins improved compared to 2024, thanks in part to increased sales of the higher-value-added product range.

Overhead costs (services, personnel, other) amounted to €11,278,843, a slight increase compared to 2024 (€10,641,934).

The profit and loss account shows a net loss for the year of €2,484,073, fully absorbed by available reserves. Below is the breakdown of revenue by geographic area, in euros:

2 cost of materials purchased and inventory variance

3 use of third-party assets, miscellaneous operating expenses, and other provisions

Below is a breakdown of revenue by product category:

The following is a breakdown of revenue by sales channel:

By number of storage systems and power (Energy S.p.A.):

An analysis of revenue by segment shows that the share of export revenue in 2025 remained largely unchanged compared to 2024. Consolidated foreign revenues amount to €11,553,962, representing 39% of the total, or a 2% increase in relative terms compared to 2024, although this represents an absolute decrease of €2,214,913 compared to 2024.

Revenues for 2025 in the "Extra Large" (XL) range-amounting to €13,519,458-result from a 161% increase compared to 2024 (€5,177,249), representing a deliberate and significant counter-trend to the overall market trend, driven by sales to an expanding customer base. The "Other" category includes revenues that, during consolidation, cannot be attributed to the analysis of storage systems in kW.

At year-end, there were over 130 registered and connected zero-CO₂XL systems. The installations cover Commercial, Industrial, and Agrivoltaic applications.

Looking at sales by channel, in 2025 the majority came from EPCs and others (43%)-linked to the C&I segment-followed by generalist distributors (29%) and specialist distributors (18%), unlike 2024, which saw a predominance of VAR (Value Added Reseller) customers.

In terms of storage systems, the number of systems sold is 1,945, with a total capacity of 33 MW, up from 30 MW in 2024.

The costs incurred by the Group in 2025 on goods sold, net of financial expenses and taxes, amounted to

€34,121,593. Of these costs, €5,337,407 represent costs for services, €4,638,344 represent personnel costs, while €20,666,344 represent the cost of raw materials used and the change in raw material inventory.

Balance Sheet

Fixed assets increased compared to the previous fiscal year, in line with investments, particularly in tangible assets. As of December 31, 2025, they totaled €32,701,705, of which €5,855,132 were intangible assets and

€25,983,046 were tangible fixed assets. Intangible fixed assets include costs related to the EGM listing of

€3,139,597 (historical cost) and development costs. Tangible fixed assets include investments in the new building under construction on the site adjacent to the headquarters, machinery for the battery assembly line, and other improvements to the existing building.

Consolidated financial fixed assets totaling €863,526 consist primarily of the investment in the associate Pylon lifeEU s.r.l.

The group's trade working capital amounts to €21,623,628, consisting mainly of net inventory of €24,694,590, trade receivables of €4,567,766, and trade payables of €7,638,728. The total figure is down by €4,982,830 compared to 2024.

Other receivables and prepayments and accrued income amount to €2,464,845 and include tax receivables of

€593,964 and deferred tax assets of €1,342,773, as well as other receivables and prepaid expenses and deferred income.

Other payables and accrued expenses and deferred income amount to €1,787,589 and include tax liabilities of

€322,672, liabilities to social security and welfare institutions of €248,748, and other payables and accrued liabilities.

Net working capital as of December 31, 2024, amounted to €28,589,687. Invested capital as of December 31, 2024, amounted to €55,682,141, while as of December 31, 2025, it stood at €55,110,089, representing a decrease of €572,052.

The group's total sources of funding, amounting to €55,110,089, consists of net equity (€45,257,043) and net financial position of €9,853,046. The group's financial debt, which is exclusively to banks with self-liquidating lines, import financing and medium-term loans, comprises short-term bank debt of €7,387,879 and medium- to long-term bank debt of €4,178,194, net of cash and cash equivalents of €1,713,027.

Net financial position

Cash Flow

(thousands of euros) 12/31/2025 Consolidated

Opening liquid funds

Net cash flows Closing liquid funds

4,699

(2,986)

1,713

18,834

(14,136)

4,698

(1) Other receivables and prepayments and accrued income; Other payables and accrued expenses and deferred income, employees' leaving entitlement and other provisions

Financial indicators

The following table summarizes some of the key economic indicators used to measure the company's

performance during the period:

All ratios, which are based on the relationship between operating profit and other metrics, are down compared to previous years due to the decline in volumes and margins.

Below are some notes on the calculation of the indicators.

EBITDA

The EBITDA reconstructed above is defined as: net loss for the year, adjusted for the following components: (i) income taxes for the year, (ii) financial items, and (iii) depreciation and amortization of tangible and intangible assets, impairment losses, and other provisions.

Main risks and uncertainties

In this section of the present report, in compliance with the provisions of Article 2428 of the Italian Civil Code, the undersigned intend to report on risks, namely those events that could potentially have negative effects on the pursuit of corporate objectives and thus hinder value creation.

The identification and management of risks represent a strategic element for the protection, maintenance, and enhancement of the Company's value over time.

FINANCIAL RISKS

Credit Risk

Credit risk represents the Company's exposure to the risk of potential losses arising from the failure of counterparties to fulfill their obligations.

Trade receivables are reported net of the allowance for doubtful accounts. It is believed that this value provides a fair representation of their estimated realizable value. There are no particular risks arising from credit concentration. New customers acquired in 2025 have a good credit rating.

Liquidity risk

Liquidity risk refers to the possibility that the financial resources available to the Company may not be sufficient to meet its financial and commercial obligations within the established terms and deadlines.

The financial structure established by the management with banks and financial institutions has enabled, and is expected to continue to enable, the Company to meet its financial needs on a regular basis. The cash flows generated by the Group, together with the financial resources that may be provided by the banking system, are sufficient to meet foreseeable ordinary financial needs; therefore, there is no liquidity risk.

In order to stabilize the expected cash flows of an "underlying" asset represented by the variable interest rate on financial debt, the Group has maintained interest rate hedging derivatives on certain loans. Although the current fiscal year recorded a significant outflow of liquidity, it shows financial resources that are currently deemed adequate to support the continuation of operations, subject to constant monitoring of changes in financial needs.

Foreign Exchange Risk

Foreign exchange risk can be defined as the aggregate of the effects on economic and financial results arising from fluctuations in currencies other than the euro that companies operating in foreign markets must face.

The Group's primary objective is to protect the profit margin on its sales and purchases from external factors. Given the limited value of sales and purchases in currencies other than the euro, this risk is not considered significant. The Group constantly monitors risks that may arise from foreign exchange risk in order to promptly adopt the necessary management tools aimed at reducing such risk.

OPERATIONAL RISKS

Dependence on Suppliers

The Group primarily relies on long-term technological and production partnerships with selected suppliers with whom it has established a lasting and mutually beneficial relationship. This strategic choice has also provided a competitive advantage in the market over the past few years. Naturally, these de facto alliances expose the Energy Group to a certain degree of risk, as the termination of such relationships for any reason, or the occurrence of critical issues in supply relationships, could negatively impact operations. Although considered a low-probability event, the Group has implemented and will continue to implement mitigation measures in this regard, both in terms of its supplier portfolio and the acquisition of skills and processes that reduce the degree of dependence or, if necessary, allow for shorter recovery times. The Group has identified alternative suppliers outside of China to ensure production continuity even in the event of geopolitical issues.

Key Management Figures

The Group continues its process of management consolidation, team building, and the establishment of business processes designed to reduce dependence on long-standing key personnel. As of December 31, 2025, there are 13 department heads in the first line of management.

Economic Outlook

In 2025, the European economy recorded moderate growth, broadly in line with 2024. Inflation approached the ECB's target, albeit with fluctuations linked in particular to the energy component. Domestic demand remained subdued, partly due to financial conditions that were still restrictive-though gradually normalizing-and a high level of international uncertainty. In this context, trade tensions and global trade policy shocks acted as an additional brake on consumption and investment decisions.

Market Risk

The renewable energy and energy storage sectors continue to be characterized by rapid evolution and significant regulatory influence, affecting both technical aspects and investment support mechanisms. Their growing strategic importance for European Union countries, particularly in light of the energy security and decarbonization targets set at the European level, keeps these sectors at the center of public policies and regulatory initiatives across various institutional levels. In this context, the introduction or revision of regulatory provisions can have significant effects on the sector's operations, even in the short term.

Throughout 2025, continuing the trend initiated in previous years, the European and national regulatory framework continued to evolve through the introduction and gradual consolidation of instruments aimed at promoting the development of renewable energy sources, strengthening energy infrastructure, and expanding energy storage systems. These measures were accompanied by initiatives focused on simplifying permitting processes and supporting investments in the energy transition. However, uncertainties remain regarding the operational definition and long-term stability of incentive mechanisms, which may affect the timing of certain projects and the overall dynamics of investments in the sector.

Geopolitical Risks

Global geopolitical tensions continue to affect international trade and supply chains, particularly with regard to economic relations between the European Union, the United States, and China, which account for a significant portion of the company's supplies. In this context, the introduction of trade restrictions, tariffs, or export limitations could impact the availability and costs of strategic components. Although the former Soviet Union region does not represent a significant market for the Energy Group, the Group has adopted a proactive approach aimed at mitigating risks associated with the geographic concentration of supply chains, through supplier diversification initiatives and the development of technological solutions designed to reduce dependence on specific geographic areas.

Cybersecurity Risk

The Group is exposed to cybersecurity risk due to the increasing use of IT systems and the spread of digitalization processes. The consequences of this risk could include data loss, business interruptions, or privacy breaches.

The Group is committed to continuously strengthening its IT systems, implementing security procedures, training staff, and protecting IT infrastructure with ad hoc measures, with particular reference to the NIS2 regulation and the ISO 27001 standard.

Climate Change Risk

Although the Company acts as an enabler for the energy transition aimed at mitigating climate change, it cannot avoid acknowledging that a general risk linked to the impacts of this macro-phenomenon exists, albeit of a minor nature given the specific characteristics of its operations. Also in relation to the subsequent section "Sustainability" (p.19 ), Energy adopts both risk transfer measures through insurance and active policies and actions to reduce the impacts of its activities.

Company organisation

In compliance with the obligations set forth in Article 2423-bis of the Italian Civil Code, Energy S.p.A. confirms the adoption of organizational structures appropriate to its size and operational complexity. The Company has implemented efficient internal control and risk management systems, ensuring transparent and responsible management and extending them throughout the Group. The internal organization is constantly monitored and updated to respond dynamically to market needs and strategic objectives. Collaboration across various organizational levels and the clear definition of responsibilities support the effectiveness of our structure. We reaffirm our commitment to sustainability and growth, ensuring corporate management consistent with the principles of fairness and integrity.

Information on Environmental Management

The Italian Civil Code requires that the analysis of the financial position and performance, in addition to being consistent with the size and complexity of the Company's business, also contain "to the extent necessary for understanding the Group's financial position and performance, financial performance indicators and, where applicable, non-financial indicators relevant to the Group's specific activities, including information pertaining to the environment and personnel" (Art. 2428, para. 2).

As can be seen from the provision cited above, the Civil Code requires directors to assess whether additional environmental information may contribute to an understanding of the Group's situation.

In light of the above considerations, the administrative bodies believe they may omit the information in question as it is not, at present, material and, therefore, is not considered to contribute to an understanding of the Group's situation and operating results. Such information will be disclosed whenever there are concrete, tangible, and significant environmental impacts capable of generating potential financial and income-related consequences.

Information regarding relations with personnel

Regarding this point, it should be noted that the information provided is intended to explain how the relationship between the Group and the people with whom it collaborates is conducted. The section "Internal Organizational Structure" on page10 describes the main statistics regarding personnel and their evolution.

The Company does not experience significant staff turnover and is expanding its workforce. This growth is supported by collaboration with specialized agencies. Currently, there are no union representatives among the workforce, and no labor disputes have been reported.

With regard to Occupational Health and Safety, no significant accidents have occurred. The Risk Assessment Document (DVR) has been updated, and specific risk assessments have been completed in line with the Company's ongoing organizational development. Organizational and production developments are continuously monitored from an HSE perspective, both at the technical level and in terms of internal roles, responsibilities, and competencies. During 2025, the subsidiary Energyonsite s.r.l. obtained ISO 45001 and ISO 9001 certifications, while Energyincoud s.r.l. obtained ISO 27001 and ISO 9001 certifications for ISMS.

Research and Development

The constant effort to anticipate market trends has led the Parent Company to develop larger-scale storage systems built from modular components that can be integrated into a system.

This macro-project has already yielded concrete results in fiscal year 2021, enabling the Company to expand its commercial offering beyond residential applications. This offering expanded further in 2022, 2023, and 2024 with the introduction of new larger-scale products, mid-range products, and outdoor applications. Today, the company is able to cover commercial, industrial, agrivoltaic, utility-scale, and grid-scale applications.

In 2025, the Group consolidated its commitment to innovation, carrying out 12 development projects with a focus on new solutions for the storage and distributed energy market. These projects aim to expand and refine the product range, adapt products to new requirements, and improve them based on feedback received from the field. In parallel with hardware development, software development continued and was enhanced.

Sustainability

Energy continues its journey of integrating sustainability principles into its business model according to ESG (Environmental, Social, and Governance) criteria, recognizing these aspects as key elements for creating value in the medium to long term.

Over the past few fiscal years, the Parent Company has initiated a process to analyze the impacts-both positive and negative, current and potential-generated by its activities along the value chain, completing the first materiality analysis and identifying the sustainability issues most relevant to Energy and its stakeholders, as well as their connection to the Sustainable Development Goals of the United Nations 2030 Agenda.

This process enabled the definition of a sustainability roadmap and led to the preparation of the first Sustainability Report for the 2023 fiscal year, followed by the second edition covering the 2024 fiscal year and published in 2025. The document serves as a tool for transparency toward stakeholders and represents a gradual alignment with the evolving European regulatory framework on sustainability reporting.

The activities undertaken represent a step in the process of integrating ESG aspects into corporate strategies and

processes, with the aim of strengthening the Company's ability to generate sustainable value over the long term.

Related Party Transactions

No significant transactions with related parties were recorded during the period under review. The register was updated following the appointment of the Board of Directors of Energy S.p.A. in May 2025. Please refer to the section on related parties in the Notes to the Financial Statements for further information.

O ut l ook

Although the market environment remains characterized by volatility and evolving competitive dynamics in the renewable energy and energy storage sectors, the Group intends to continue strengthening its position in its various target market segments.

In particular, during the coming fiscal year, the Group will continue to pursue a strategy focused on expanding sales channels and progressively diversifying its product portfolio, with the aim of capturing new customer segments and consolidating its presence in markets where it already operates.

The Group also intends to capitalize on the expansion of its product range, which began in 2025, enabling it to compete in niche markets characterized by high technical requirements and greater application complexity, thereby strengthening its ability to offer integrated solutions in high-value-added segments. At the same time, further development of the engineering and design services offering is planned, with the aim of supporting customers in the implementation of increasingly complex energy systems. In this context, the Group will also continue to enhance its digital and cloud services, an area in which investments aimed at improving energy system management and monitoring platforms are ongoing.

Geographically, the Group plans to further strengthen its presence in the DACH region (Germany, Austria, and Switzerland), both through collaborations with professionals dedicated to commercial and technical

development and through the newly established Energyonsite GmbH, which serves as an operational hub for business development in this area.

In this context, the coming fiscal year will be characterized by the progressive consolidation of the Group's business model, with increasing integration between products, engineering services, and digital platforms, with the aim of capitalizing on the opportunities offered by the evolution of the energy storage market and the energy transition.

Branches

Details of the Group's offices are provided in the following list:

• Registered office of Energy S.p.A. and Energyincloud s.r.l. at Piazza Manifattura 1, Rovereto (TN)

• Energy's operational headquarters in Sant'Angelo di Piove di Sacco, PD (new location in 2022) - Via Zona Industriale, 8/10

• Registered office and operational headquarters of Energyonsite s.r.l. at Via Gänsbacher 36, Vipiteno (BZ)

Results for the fiscal year

Based on the information provided, we invite you to approve the consolidated financial statements as of December 31, 2025. The coverage of the loss is detailed in the individual financial statements of the Group companies.

Rovereto, March 27, 2026

On behalf of the Board of Directors,

The Chairman of the Parent Company, Alessandro Granuzzo

Basic Information Company Name: ENERGY SPA

Headquarters: PIAZZA MANIFATTURA 1, ROVERETO, TN

Share capital: 616,605.80 Fully paid-in share capital: Yes

Chamber of Commerce code: TN

VAT number: 02284640220

Tax ID: 02284640220

REA Number: 213161

Legal form: CORPORATION Primary Industry Sector (ATECO): 466420

Company in liquidation: No Single-member company: no

Company subject to management and coordination no

by another entity: Name of the company or entity exercising management and coordination:

Membership in a group: yes

Name of the parent company: ENERGY SPA Country of the parent company: ITALY

Registration number in the register of cooperatives:

Cons o l i d ate d Bala nce Shee t

Total inventory 24,694,590 24,777,082

due after one year 111,087 118,858

Total receivables 7,439,996 10,086,237

III - Current financial assets - -

5) Derivatives 8,383 32,027

Total current financial assets 32,027 8,383 32,027

Cons o l i d ate d Profit and l os s ac co unt

12/31/2025 12/31/2024

C ons o l i date d cas h f l ow s tate m e nt, i ndi re c t me thod

N o te s to the cas h f l ow s tate me nt

Cash flow decreased by €2.98 million during the fiscal year. This decrease is primarily attributable to three major factors.

Cash flow from operating activities was positive by 5.73 million euros, attributable to a positive change in net working capital (9.3 million euros) due largely to the reduction in inventory linked to the sale of products purchased in previous fiscal years.

Cash flow from investing activities was negative by €7.49 million, primarily due to investments for the construction of the new building (approximately €5.6 million) and development costs of nearly €1 million.

Financing activities show a decrease of approximately €1.23 million, primarily due to a reduction in medium- to long-term financial debt of approximately €4.33 million.

For these reasons, cash and cash equivalents at the end of the fiscal year amount to €1,713,027.

Notes to the Financial Statements

Consolidated Financial Statements as of 12/31/2025

I ntroduc t i on to the N ote s to the F i n ancia l S tate m e nts

The consolidated financial statements consist of the balance sheet, the profit and loss account, the cash flow statement, and the notes to the financial statements, prepared in accordance with the criteria set forth by current regulations and in compliance with national accounting standards. This document reflects the results of the accounting records regularly maintained by the parent company and its subsidiaries, adjusted for eliminations inherent to the consolidation process, as well as for the adjustments outlined in the remainder of these notes.

The Group's financial position and results of operations are presented in a clear, truthful, and accurate manner in accordance with the provisions of Legislative Decree 127/91; where necessary, the additional disclosures required by Article 29, paragraph 3, of the aforementioned decree are also provided.

In particular, the cash flow statement, prepared in accordance with OIC 10, shows the Group's cash flows,

appropriately adjusted to exclude those relating to intragroup transactions.

The notes to the financial statements illustrate, in addition to the consolidation criteria, the valuation principles followed in preparing the consolidated financial statements, in compliance with applicable civil law; the following are also included: the lists of companies included and excluded from consolidation, and the reconciliation statement between the parent company's equity as reported in the separate financial statements and the equity as reported in the consolidated financial statements.

The consolidated financial statements are also accompanied by a report from the parent company's Board of Directors regarding the Group's financial position and the performance of its operations.

Information on the composition of the corporate group

The companies included in the scope of consolidation as of December 31, 2025, in addition to the parent company Energy S.p.A., are:

• EnergyOnSite S.r.l.: a wholly-owned subsidiary based in Vipiteno (BZ), specializing in consulting, design, and supervision of the installation and maintenance of large-scale energy storage systems. During the fiscal year, the Group became the sole shareholder by acquiring the remaining 10% stake in the company.

• EnergyInCloud S.r.l.: a 79% owned subsidiary based in Rovereto (TN), a startup active in the development of software applications in the IoT sector.

• EnergyOnSite GmbH: a wholly-owned subsidiary based in the Munich area, Germany, established to

expand the Group's presence in the German market.

In addition to these, Energy S.p.A. holds a 30% stake in the share capital of Pylon LiFeEU S.r.l., based in

Sant'Angelo di Piove di Sacco (PD).

Investee - Company

Name

Shareholder -

Company Name

Role

Type of control with

respect to the Parent Company

% of direct control /

% of exercisable voting rights

% of

consolidation

All companies belonging to the group as of the consolidated financial statements' reporting date have been

included in the scope of consolidation.

Currenc

y

Reason for exclusion

Investee - Company

Name

Investor -

Company Name

Registered Office

Share

Capital

Directly controlled subsidiaries:

ENERGYINCLOUD SRL ENERGY SPA Piazza Manifattura No. 1 -

Rovereto (TN)

ENERGYONSITE LLC ENERGY SPA 36 Gaensbacher Street -

Vipiteno (BZ)

Grünwalder Weg 32 -

10,000 Euro

20,000 Euro

ENERGYONSITE GMBH ENERGY SPA

Oberhaching (Munich -Germany)

25,000 Euro

Companies excluded from consolidation and accounted for using the equity method:

Directly affiliated companies:

PYLON LIFEEU SRL ENERGY SPA

VIA ZONA INDUSTRIALE No. 14 SANT'ANGELO DI PIOVE DI S (PD)

10,000 Euro Lack of control

All financial statements of the companies included in the scope of consolidation are expressed in euros. Regarding the corporate group structure, it should be noted that in July 2025, EnergyOnSite GmbH was established, a company incorporated under German law with the purpose of expanding the Group's presence in the German market.

Furthermore, in November 2025, the acquisition of an additional 10% stake in the share capital of EnergyOnSite Srl was completed.

Finally, in December 2025, a 7.5% stake in the share capital of EnergyInCloud Srl was sold as part of a plan to expand the shareholder base to include specific key company executives.

Preparation of the Consolidated Financial Statements

The information contained in this document is presented in the order in which the relevant items appear in the balance sheet and profit and loss account.

With reference to the introductory section of these notes to the financial statements, it is hereby certified that, pursuant to Article 2423, paragraph 3 of the Italian Civil Code, if the information required by specific legal provisions is insufficient to provide a true and fair view of the company's financial position, the supplementary information deemed necessary for this purpose is provided.

The consolidated financial statements were prepared using the financial statements of the companies belonging to the Group as of December 31, 2025, as prepared by their respective management bodies.

The financial statements used to prepare the consolidated financial statements were all prepared using valuation criteria consistent with those used by the parent company in its own financial statements.

The structure and content of the balance sheet, profit and loss account, and cash flow statement are those required for the financial statements of the consolidated companies, as the conditions set forth in the second sentence of Article 32, paragraph 1, of Legislative Decree 127/91 do not apply.

The consolidated financial statements, as well as these notes to the financial statements, have been prepared in euros.

Principles for the Preparation of the Consolidated Financial Statements

Pursuant to Article 2423, paragraph 2, of the Italian Civil Code, these financial statements present a clear, true,

and fair view of the Group's financial position and results of operations for the fiscal year.

The following general principles were observed in the preparation of the consolidated financial statements:

• assets and liabilities were valued on a prudent basis. The components of individual asset and liability items were valued separately to prevent gains on some items from offsetting losses on others. To this end, only gains realized as of the end of the reporting period were recognized, while risks and losses attributable to the period were recognized even if known after the end of the period; furthermore, there are no heterogeneous elements included in the individual items;

• the recognition and presentation of items are carried out taking into account the substance of the transaction or contract; in other words, the correctness of the recognition or derecognition of balance sheet and profit and loss account items was verified by comparing accounting principles with the rights and obligations derived from the contractual terms of the transactions;

• Income and expenses for the period have been recognized, regardless of the date of collection or payment. Accrual is the timing criterion by which positive and negative income components have been allocated to the profit and loss account for the purpose of determining the period's result. It should be noted that costs are correlated with the period's revenues;

• the significance of the individual elements comprising the financial statement items was assessed within the overall context of the financial statements, taking into account both qualitative and quantitative factors;

• accounts were considered for comparability over time; therefore, for each item in the Balance Sheet and Profit and loss account, the amount of the corresponding item from the prior year was disclosed, except in exceptional cases where one or more items were incomparable or unsuitable. Where items are not comparable, those relating to the prior year have been adjusted, with relevant comments provided in the Notes to the Financial Statements for significant circumstances.

  Structure and Content of the Consolidated Financial Statements

  The structure of the Balance Sheet and the Profit and loss account is as follows:

• the Balance Sheet and Profit and loss account reflect the provisions of Articles 2423-ter, 2424, and 2425 of the Italian Civil Code;

• the items in the Balance Sheet and Profit and loss account have been recorded in accordance with the principles of Articles 2424-bis and 2425-bis of the Italian Civil Code.

The Cash Flow Statement has been prepared in accordance with Article 2425-ter of the Italian Civil Code and in

compliance with the provisions of accounting standard OIC 10 "Cash Flow Statement."

The Notes to the Financial Statements, prepared in accordance with Articles 2427 and 2427-bis of the Italian Civil Code and other provisions of the Italian Civil Code other than those mentioned above, as well as in accordance with specific legal provisions other than those mentioned above, also contain all supplementary information deemed necessary to provide a true and fair view of the economic, financial, and financial position, even if not required by specific legal provisions.

With regard to the provisions of Article 2423-ter, paragraph 6, of the Italian Civil Code, it is noted that no offsetting permitted by law has been performed.

Exceptional cases pursuant to Article 2423, paragraph 5, of the Italian Civil Code

No exceptional cases occurred that would have required the use of the exceptions referred to in Article 2423, paragraphs 4 and 5, of the Italian Civil Code.

Changes in accounting policies

No exceptional cases occurred that required the use of the exceptions provided for in Article 2423-bis, paragraph 2, of the Civil Code.

Comparability and adjustment issues

This report represents the Group's first consolidated financial statements; for this reason, the financial

statements do not include a column for the prior year.

Valuation criteria applied

The criteria applied in the valuation of financial statement items and in value adjustments comply with the provisions of the Italian Civil Code and the guidelines contained in the accounting standards issued by the Italian Accounting Board.

Pursuant to Article 2427, paragraph 1, no. 1 of the Italian Civil Code, the most significant valuation criteria adopted in compliance with the provisions of Article 2426 of the Italian Civil Code are described below, with particular reference to those financial statement items for which the law permits different valuation and adjustment criteria or for which no specific criteria are provided.

The carrying amounts expressed in foreign currency have been recorded, after conversion into euros at the exchange rate in effect at the time of their recognition, or at the exchange rate as of the end of the fiscal period, in accordance with the provisions of OIC Accounting Standard 26.

Intangible assets, provided the conditions set forth in the accounting standards are met, are recorded on the balance sheet at purchase and/or production cost and are amortized on a straight-line basis over their expected useful lives.

The value of fixed assets is shown net of accumulated amortization and any write-downs.

Amortization was calculated in accordance with the following predetermined schedule, which is deemed to ensure a proper allocation of the cost incurred over the useful life of the intangible assets in question:

The amortization method for intangible assets has been applied consistently in each fiscal year, based on the remaining economic useful life of each individual asset or expense.

Pursuant to and for the purposes of Article 10 of Law No. 72 of March 19, 1983, and as also provided for in subsequent monetary revaluation laws, it is hereby stated that no monetary revaluation has ever been performed on intangible assets still held on the balance sheet.

It should be noted that no write-downs were necessary for these capitalized expenses pursuant to Article 2426, paragraph 1, no. 3 of the Italian Civil Code, as, in accordance with accounting standard OIC 9, no indicators of potential permanent impairment of intangible assets were identified.

Start-up and expansion costs were recorded as assets on the balance sheet with the consent of the Board of Statutory Auditors, as they are expected to provide benefits over multiple years; these costs were amortized over a period not exceeding five years.

Development costs were recorded as assets on the balance sheet with the consent of the Board of Statutory Auditors, as they meet, in the Company's prudent judgment, the criteria required by OIC 24: the costs are recoverable and relate to specific, feasible development projects for which the Company possesses the necessary resources. Furthermore, the costs relate to a clearly defined, identifiable, and measurable product or process. Since it is possible to reliably estimate their useful life, these costs are amortized over their useful life.

Intangible assets are recognized at purchase cost, including incidental costs, and are amortized within the legal or contractual limits applicable to them.

Goodwill, provided the conditions set forth in the accounting standards are met, has been recorded as an asset on the balance sheet with the consent of the Board of Statutory Auditors, as it was acquired for consideration, and has been amortized, within the 20-year limit provided for by OIC 24, in accordance with its useful life, as provided for in Article 2426, paragraph 1, no. 6 of the Italian Civil Code.

Intangible assets under construction, recorded under item B.I.6, are initially recognized on the date the first costs for their creation are incurred and include both internal and external costs incurred. These costs remain recorded as assets under construction until the project is completed and are not subject to amortization until that time.

Assets belonging to the category of tangible fixed assets, recognized on the date on which the risks and rewards associated with the acquired asset are transferred, are recorded in the financial statements at purchase cost, plus any incidental expenses incurred until the assets are ready for use and, in any case, within the limit of their recoverable value. These assets are shown on the balance sheet net of accumulated depreciation and impairment losses.

The carrying amount of the assets, grouped into homogeneous classes by nature and year of acquisition, is allocated over the fiscal years during which they are expected to be used. This procedure is implemented by systematically charging depreciation amounts to the profit and loss account in accordance with predetermined schedules, established when the asset is available and ready for use, based on the estimated remaining useful life of the assets. These schedules, subject to annual review, are based on the gross value of the assets and assume a residual value of zero at the end of their useful life.

Depreciation of tangible fixed assets, whose useful life is limited, was calculated in accordance with the following predetermined schedule:

For fixed assets acquired during the fiscal year, the above rates were reduced by half, as the resulting depreciation amount does not differ significantly from the amount calculated from the moment the asset is available and ready for use.

The depreciation criteria for tangible fixed assets have not changed from those applied in the previous fiscal year. Pursuant to and for the purposes of Article 10 of Law No. 72 of March 19, 1983, as also referred to in subsequent monetary revaluation laws, it is specified that no monetary revaluation has ever been performed for tangible assets still on the balance sheet.

It should be noted that it was not necessary to recognize impairment losses pursuant to Article 2426, paragraph 1, no. 3 of the Italian Civil Code, as, in accordance with accounting standard OIC 9, no indicators of potential permanent impairment of tangible fixed assets were identified.

The company has separately accounted for the land underlying the buildings it owns, and no depreciation has been recorded for this land, as these are assets for which no depletion of future utility is expected.

Since land does not lose its utility over time, it has not been depreciated.

Tangible fixed assets under construction, recorded under item B.II.5, are initially recognized on the date the first costs for the construction of the asset are incurred and include both internal and external costs incurred for the construction of the asset. These costs remain recorded as fixed assets under construction until the project is completed and are not subject to depreciation until that time.

Receivables recorded under financial assets have been recognized in the financial statements using the amortized cost method, as defined in Article 2426, paragraph 2, of the Italian Civil Code, taking into account the time factor and the estimated realizable value, in accordance with the provisions of Article 2426, paragraph 1, no. 8, of the Italian Civil Code.

For receivables for which the application of the amortized cost method and/or discounting was deemed irrelevant for the purpose of providing a true and fair view of the company's financial position and results of operations, they were recorded at their estimated realizable value. This occurred, for example, in the case of receivables with a maturity of less than twelve months or, with regard to the amortized cost criterion, where transaction costs, commissions, and any other difference between the initial value and the value at maturity are immaterial, or, in the case of discounting, when the interest rate inferable from the contractual terms is not significantly different from the market interest rate.

Inventory items are initially recognized on the date on which the risks and rewards associated with the acquired asset are transferred. Inventory is initially recorded at purchase or production cost and subsequently measured at the lower of cost and the corresponding realizable value derived from the market.

Purchase cost refers to the actual purchase price plus incidental charges. The purchase cost of materials includes, in addition to the price of the material, transportation costs, customs duties, other taxes, and other costs directly attributable to that material. Returns, trade discounts, rebates, and bonuses are deducted from costs.

The cost determination method adopted for fungible goods is the weighted average cost.

Work in progress on order is valued using the completed contract method, defined based on the following parameters:

• production cost;

• Recognition of revenue from the contract in the fiscal year in which the work is completed.

This method was adopted because it allows for a valuation based on actual data, in accordance with the principle of prudence.

Receivables recorded in the balance sheet represent rights to demand, at a specified or determinable maturity, fixed or determinable amounts of cash, or goods/services of equivalent value, from customers or other parties. Receivables arising from the sale of goods and the provision of services are recognized in accordance with the requirements set forth in the commentary section on revenue. The amortized cost method is not applied in cases where its effects are immaterial, generally for short-term receivables or when transaction costs, commissions paid between the parties, and any other difference between the initial value and the maturity value of the receivable are immaterial.

Such receivables are initially recorded at face value net of premiums, discounts, and rebates provided for in the contract or otherwise granted, and are subsequently measured at face value plus interest calculated at the nominal interest rate, less principal and interest received, and net of estimated write-downs and credit losses recognized to adjust the receivable to its estimated realizable value.

Financial discounts and rebates, which did not contribute to determining the estimated realizable value as they were not foreseeable at the time of the receivable's initial recognition, are recognized upon collection as financial expenses.

With regard to the estimated recoverable amount, the carrying amount of receivables is adjusted through an allowance for doubtful accounts, taking into account the existence of indicators of impairment. For this purpose, both specific indicators and those based on experience, as well as any other relevant factors, are considered if they suggest that a loss in the value of the receivables is probable. The estimate of the allowance for doubtful accounts is determined by analyzing individually significant receivables and at the portfolio level for the remaining receivables, determining the losses that are expected to be incurred on receivables outstanding as of the balance sheet date. The provision for bad debts on receivables backed by guarantees takes into account the effects of the enforcement of such guarantees. With regard to insured receivables, the provision is limited to the portion not covered by insurance, only if there is reasonable certainty that the indemnity will be recognized.

A derivative financial instrument is defined as a financial instrument or other contract that possesses the following three characteristics:

• its value changes as a result of changes in a specified interest rate, financial instrument price, commodity price, exchange rate, price or rate index, credit rating, credit index, or other variable, provided that, in the case of a non-financial variable, such variable is not specific to one of the contractual counterparties (sometimes referred to as the underlying);

• it does not require an initial net investment or requires an initial net investment that is less than would be required for other types of contracts from which a similar response to changes in market factors would be expected;

• it is settled at a future date.

  Derivative financial instruments (hereinafter also referred to simply as "derivatives") are initially recognized when the company, by becoming a party to the contractual terms-that is, on the contract date-is subject to the related rights and obligations, and are recorded at fair value, even if they are embedded in other derivative financial instruments.

  At each balance sheet date, derivative financial instruments are measured at fair value and classified in the balance sheet under the appropriate current or non-current asset accounts (where they hedge non-current assets or liabilities due beyond 12 months) in cases of positive fair value, or under provisions for risks and charges in cases of negative fair value. Fair value is the price that would be received for the sale of an asset or paid for the transfer of a liability in an arm's-length transaction between market participants as of the measurement date; for unlisted derivatives, it is determined by the company using appropriate valuation techniques, based on assumptions, parameters, and fair value hierarchy levels set forth in the applicable accounting standard.

  Hedge accounting

  Derivative financial instruments may be designated as hedging transactions when:

• the hedging relationship consists solely of eligible hedging instruments and eligible hedged items;

• at the inception of the hedging relationship, there is a formal designation and documentation of the hedging

  relationship, the company's risk management objectives, and the hedging strategy;

• the hedging relationship meets both the qualitative and quantitative requirements for hedge effectiveness.

  Consequently, if derivatives are used from a management perspective for purely hedging purposes but do not fully meet the criteria for designation as hedging instruments, they are measured in accordance with the general rules described above.

  The effectiveness of the hedging relationship is documented not only initially but on an ongoing basis. At each balance sheet date, the company assesses whether the hedging relationship still meets the effectiveness requirements.

  When all the requirements described above are met, hedging transactions may be accounted for using the following accounting models.

  When hedging transactions involve derivative financial instruments with characteristics entirely similar to those of the hedged item and the derivative financial instrument is entered into at market conditions (e.g., a forward or swap with a fair value close to zero) at the date of initial recognition, the accounting model provided for so-called simple hedges, described below, applies if:

• the hedging relationship consists solely of eligible hedging instruments and eligible hedged items;

• at the inception of the hedging relationship, there is a formal designation and documentation of the hedging

  relationship, the company's risk management objectives, and the strategy for implementing the hedge;

• the key terms of the hedging instrument and the hedged item (such as the notional amount, the cash flow settlement date, the maturity, and the underlying variable) match or are closely aligned, and the counterparty's credit risk is not such as to significantly affect the fair value of either the hedging instrument or the hedged item. At each balance sheet date, the company assesses whether the effectiveness criteria described above are met, including a review of the counterparty credit risk of the hedging instrument and the hedged item, which, if significant, could result in the termination of the hedging relationship.

  Changes in fair value of both the hedging instrument and the hedged item are recognized in full in the appropriate profit and loss account line items, without the need to calculate the difference to be allocated to the profit and loss account line item of the hedged item.

  Changes in the fair value of the hedging instrument are recognized in full in the designated equity reserve, without the need to calculate what portion of the hedge is ineffective and therefore must be recognized in the profit and loss account. The same accounting policies described above are then followed for the release of amounts accumulated in the equity reserve.

  A specific section of the notes to the financial statements provides the information required by Article 2427-bis, paragraph 1, of the Italian Civil Code regarding the fair value of derivative financial instruments and that required by OIC 32.

  Liquid fundsCash and cash equivalents are valued according to the following criteria:

  • cash, at face value;

  • bank deposits and checks on hand, at their estimated realizable value. In this specific case, the realizable value coincides with the face value.

Accrued income and accrued expenses represent, respectively, portions of revenues and costs attributable to the current fiscal year that will be recognized in subsequent fiscal years.

Prepaid expenses and deferred income represent portions of costs and revenues, respectively, that have been recognized during the current fiscal year or in prior fiscal years but pertain to one or more subsequent fiscal years.

Therefore, only portions of costs and revenues common to two or more fiscal years are recorded in these accounts, the amounts of which vary according to physical or economic time.

At the end of each fiscal year, the conditions that led to their initial recognition are reviewed, and, if necessary, the required value adjustments are made. In particular, in addition to the passage of time, for accrued income, the estimated realizable value is considered, while for prepaid expenses, the existence of the future economic benefit related to the deferred costs is considered.

Transactions between the company and its shareholders (acting in their capacity as shareholders) may give rise to receivables or payables to shareholders. The company records a receivable from shareholders when the shareholders assume an obligation to the company, while it records a payable when it assumes an obligation to the shareholders.

Payments made by shareholders that do not entail a repayment obligation are recorded in the relevant equity account, while loans received from shareholders that entail a repayment obligation are recorded as liabilities.

Provisions for risks and charges represent liabilities of a specific nature, certain or probable, with an uncertain timing or amount. In particular, provisions for risks represent liabilities of a specific nature and probable existence, whose values are estimated, while provisions for expenses represent liabilities of a specific nature and certain existence, estimated in terms of amount or occurrence date, related to obligations already assumed as of the balance sheet date but which will result in cash outflows in subsequent fiscal years.

Provisions are recognized on an accrual basis for amounts expected to be paid or for goods and services to be provided at the time the obligation must be fulfilled.

Provisions for risks and liabilities are primarily recorded in the profit and loss account items of the relevant categories, with the criterion of classification by nature of costs taking precedence. The amount of provisions is measured based on the best estimate of costs, including legal fees, as of the balance sheet date.

Furthermore, in the case of a provision for expenses, the estimation process may take into account the relevant time horizon if it is possible to make a reasonably reliable estimate of the expenditure associated with the obligation and the date of occurrence, and the latter is so far in the future as to make the present value of the obligation and the estimated liability at the time of expenditure significantly different.

Provisions for risks and charges recognized in a prior period are reviewed to verify their correct measurement as of the balance sheet date.

Subsequent use of provisions is made directly and only for those expenses and liabilities for which the provisions were originally established. Any negative differences or surpluses compared to the expenses actually incurred are recognized in the profit and loss account in accordance with the original provision.

Severance pay (TFR) represents the benefit to which an employee is entitled in any case of termination of employment, pursuant to Article 2120 of the Italian Civil Code and taking into account the regulatory changes introduced by Law 296/2006. It constitutes a certain compensation expense to be recognized in each fiscal year on an accrual basis and corresponds to the total of accrued severance pay, taking into account all forms of ongoing remuneration, net of advances paid and partial advances paid pursuant to collective or individual

contracts or company agreements for which no reimbursement is required, as well as net of amounts transferred to supplementary pension funds or to the treasury fund managed by INPS.

The liability for severance pay is equal to the amount that would have been payable to employees had their employment relationship ended as of the balance sheet date. The amount of severance pay relating to employment relationships that ended as of the balance sheet date and for which payment is made in the following fiscal year is classified as a liability.

Severance pay has been calculated in accordance with the provisions of Article 2120 of the Italian Civil Code, taking into account legislative provisions and the specific terms of contracts and professional categories, and includes accrued annual amounts and revaluations based on ISTAT coefficients.

The amount of the provision is recognized net of advance payments made and amounts used for employment terminations occurring during the fiscal year and represents the certain liability to employees as of the balance sheet date.

Liabilities are obligations of a specific nature and certain existence that represent obligations to pay fixed or determinable amounts of cash to lenders, suppliers, and other parties. The classification of liabilities among the various liability categories is based on their nature (or origin) with respect to ordinary operations, regardless of the time period within which the liabilities must be settled.

Liabilities arising from the purchase of goods and services are recognized in accordance with the requirements set forth in the commentary section on costs. Borrowings and liabilities arising for reasons other than the acquisition of goods and services are recognized when the company's obligation to pay the counterparty arises, to be determined based on legal and contractual provisions. Liabilities for customer prepayments are recognized when the right to collect the prepayment arises. Liabilities are recognized in the financial statements using the amortized cost method, taking into account the time value of money.

The amortized cost method is not applied in cases where its effects are immaterial, generally for short-term liabilities or when transaction costs, commissions paid between the parties, and any other difference between the initial value and the maturity value of the liability are immaterial.

Assets and liabilities arising from a foreign currency transaction are initially recognized in euros, applying the spot exchange rate between the euro and the foreign currency in effect on the transaction date to the foreign currency amount.

Monetary items denominated in foreign currency, including provisions for risks and charges related to foreign currency liabilities, are translated in the financial statements at the spot exchange rate as of the balance sheet date. The related foreign exchange gains and losses are recognized in the profit and loss account for the period. Non-monetary foreign currency assets and liabilities remain recorded on the balance sheet at the exchange rate at the time of their acquisition; therefore, positive or negative exchange differences do not give rise to separate recognition. Any net gain arising from the exchange rate adjustment of monetary items denominated in foreign currency contributes to the formation of the net loss for the year and, upon approval of the financial statements and the subsequent allocation of the net loss, is recorded in a specific non-distributable reserve. If the net profit for the year is less than the unrealized gain on foreign currency items, the amount recorded in the non-distributable reserve is equal to the net profit for the year.

Accrued expenses and deferred income

Revenue from the sale of products and goods or the provision of services related to core operations is recognized net of returns, trade discounts, rebates, and bonuses, as well as taxes directly related to the sale of products and the provision of services, in accordance with the principles of accrual and prudence.

Revenue from the sale of goods is recognized when the production process for the goods has been completed and the exchange has already taken place, that is, when there has been a substantive-rather than merely

formal-transfer of ownership, using the transfer of risks and rewards as the benchmark. Revenue from the provision of services is recognized when the service is rendered, that is, when the service has been performed. Production costs are recognized net of returns, trade discounts, rebates, and bonuses. Costs arising from the purchase of goods are recognized when the production process for the goods is completed and the substantive transfer of ownership has occurred, using the transfer of risks and rewards as the reference criterion. Costs arising from the purchase of services are recognized when the services are received, that is, when the service has been performed.

Revenues and income, costs and expenses related to foreign currency transactions are determined at the spot exchange rate on the date the transaction is completed.

Income and expenses related to purchase and sale transactions with a forward repurchase obligation, including the difference between the forward price and the spot price, are recognized on a pro-rata basis for the period. Operating grants due both by law and under contractual provisions are recognized on an accrual basis in the period in which the right to receive them has arisen with certainty.

Revenues are recognized in the financial statements on an accrual basis, net of returns, rebates, discounts, and bonuses, as well as taxes directly related thereto. With respect to the sale of goods, the related revenues are recognized when the substantive, rather than formal, transfer of ownership has occurred, using the transfer of risks and rewards as the benchmark for the substantive transfer. Revenue from the provision of services is recognized when the service is rendered, i.e., when the service has been performed; in the specific case of ongoing services, the related revenue is recognized on an accrual basis.

Effective January 1, 2024, the new accounting standard OIC 34 came into force, governing the criteria for the recognition and measurement of revenue in the financial statements and the information to be disclosed in the notes to the financial statements. In this specific case, it should be noted that "sales with warranty" are immaterial for the application of OIC 34, as they represent a marginal portion of total annual revenue.

Increases in fixed assets for internal work are recorded at production cost, which includes direct costs (materials and direct labor, design costs, external supplies, etc.) and general production costs, for the portion reasonably attributable to the asset for the period of its manufacture until the asset is ready for use; Any costs related to the financing of its manufacture are added using the same criteria.

Operating grants, recognized on an accrual basis in the fiscal year in which the right to receive them arose with certainty, are reported under the specific item A5 as they supplement revenues from ordinary operations and/or reduce costs and expenses from ordinary operations.

Income taxes

Current taxes are calculated based on a realistic estimate of taxable income for the period, determined in accordance with tax legislation, and by applying the tax rates in effect as of the balance sheet date . The related tax liability is recognized in the balance sheet net of advance payments, withholdings, and tax credits that can be offset and for which no refund has been requested; if advance payments, withholdings, and credits exceed the taxes due, the related tax credit is recognized. Tax credits and liabilities are measured using the amortized cost method, except in cases where they are due within 12 months.

Deferred and prepaid income taxes are calculated on the cumulative amount of all temporary differences between the values of assets and liabilities determined using statutory accounting criteria and their values recognized for tax purposes, which are expected to reverse in subsequent fiscal years.

Deferred and prepaid income taxes are recognized in the period in which the temporary differences arise and are calculated by applying the tax rates in effect in the fiscal year in which the temporary differences will reverse, provided such rates are already determined as of the balance sheet date; otherwise, they are calculated based on the rates in effect as of the balance sheet date.

Income taxes are recognized based on the calculation of taxable income in accordance with applicable regulations and reflect both current and deferred tax liabilities.

The current tax expense was determined by applying:

• the standard rate of 24% to taxable income for IRES purposes;

• to taxable income for IRAP purposes, the rate of 4.08% for the portion of income allocated to the Veneto Region and 2.68% for that allocated to the Autonomous Province of Trento.

Deferred and prepaid taxes, relating to temporary differences between the value attributed to assets and liabilities under statutory accounting criteria and the corresponding values for tax purposes, were determined in accordance with the procedures set forth in OIC 25, applying rates of 24% for IRES and 3.29% for IRAP.

Use of Estimates

The preparation of the financial statements requires the use of estimates that affect the values of assets and liabilities and the related financial statement disclosures. Actual results may differ from these estimates. Estimates are reviewed periodically, and the effects of changes in estimates-unless resulting from erroneous estimates-are recognized in the profit and loss account for the period in which the changes occur, if they affect only that period, and also in subsequent periods if the changes affect both the current and subsequent periods.

Transactions Subject to Forward Repurchase Obligations

The company, pursuant to Article 2427, paragraph 6-ter of the Italian Civil Code, certifies that during the period it did not enter into any transaction subject to a forward repurchase obligation.