EuroGroup Laminations S p A : steps into the indian market through the acquisition of a 40% stake, and the control, of Kumar Precision Stampings

PRESS RELEASE

EUROGROUP LAMINATIONS STEPS INTO THE INDIAN MARKET THROUGH THE ACQUISITION OF A 40% STAKE, AND THE CONTROL, OF KUMAR PRECISION STAMPINGS PRIVATE LIMITED

Baranzate (MI), August 1st, 2024 - EuroGroup Laminations S.p.A. ('EuroGroup', 'EGLA' or the 'Company') announces that, today, it has entered into an investment agreement to acquire 40% of the share capital of the Indian company Kumar Precision Stampings Private Limited ('Kumar'), a leading local player in the production and distribution of stators and rotors for electric motors, with various industrial and domestic applications (including, among others, HVAC, railway, home appliances, pumps and generators). In addition, Kumar is also operating in the magnetic laminations transformer market.

In the fiscal year ended on 31 March 2024, Kumar, with headquarter in New Delhi, four production facilities (one of which is in the final phase of construction) and over 40 years of experience in the sector, posted product revenues of about Euro 40 million and an EBITDA of about Euro 3.6 million.

Strategic rationale and value creation

The acquisition of Kumar represents an important strategic milestone for EGLA, allowing to further consolidate the positioning of its Industrial business unit at a global level, while successfully penetrating the highly attractive and fast-growing Indian market, which provides for untapped opportunities while also starting to operate in the fast-growing transformers' business.

With the acquisition of Kumar, EGLA will expand its geographical footprint in a strategic area, enhancing its proximity to new and existing clients while also addressing their rapidly evolving needs. In this regard, Kumar's cost-efficient manufacturing base will strengthen EGLA's competitive advantage, creating also opportunities to serve market segments not yet addressed.

Furthermore, EGLA's support will allow Kumar to i) foster its export capabilities within the Industrial sector leveraging on the Company global sales network, as well as ii) accelerate Kumar's scale-up, benefitting from EGLA's extensive know-how, R&D capabilities and best practices.

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Additional upside potential comes from actionable initiatives such as cost synergies in raw material purchasing, working capital optimization, and improved efficiency towards capex deployment and R&D spending.

In conclusion, the transaction represents a highly strategic move that is fully aligned with EGLA's vision to bring innovation and sustainable solutions to the market, while also delivering significant value creation for all its stakeholders.

Transaction key terms and structure

At closing, EGLA is expected to obtain a 40% stake in Kumar's share capital through a combination of i) the direct purchase of a portion of shares held by Kumar's current shareholders for Euro 13.9 million and ii) the simultaneous subscription of a capital increase in Kumar, equal to Euro 6.0 million, for a total amount of Euro 19.9 million.

More in depth, the amount was established on a pre-money equity value for the whole company equal to Euro 43.8 million, for an Enterprise Value of about Euro 58.3 million.

Said valuation takes into account an expected 2022A-25E product revenues CAGR of approx. 21%, which entails estimated product revenues for the year ending March 2025 of approx. Euro 54 million, and also sees an expected EBITDA margin in the 9.5%-10.5% range.

In the context of the deal, a shareholders' agreement is expected to be signed between the EGLA and Kumar's current shareholders, which will settle, inter alia, Kumar's governance following the closing of the transaction, according to principles that will grant the control and thus the full consolidation to EGLA. As per the governance, the shareholders' agreement provides for, inter alia, the right of EGLA to appoint the majority of the members of the Board of Directors.

The transaction is expected to be completed by the end of the financial year 2024, upon completion of the conditions precedent set forth in the terms of the agreement. The total amount payable for the transaction will be fully funded through EGLA's available cash and will not be subject to adjustment.

The deal will be presented and displayed as part of the conference call with investors and analysts on the 1H2024 financial results, convened for Friday, 2 August 2024 at 11.00 am CEST.

Marco Arduini, CEO of EGLA, commented: "This acquisition represents a very significant and strategic step in the development path of EGLA. Our

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entry into the Indian market, which is currently among the countries with the highest long-term growth expectations, will allow us to broaden our international footprint and further strengthen our competitive edge in our reference sector, while seizing growth opportunities and operational synergies in a fast-expanding market. We believe that the partnership with Kumar will be yet another major lever in the acceleration of EGLA's growth path, and that it will benefit all stakeholders."

Anil Kumar Gupta, Co-Founder & MD of Kumar, commented: "This strategic partnership unites our deep-rootedIndian market presence and cost efficiency with EGLA's world-classmanufacturing prowess, technical know-howand global footprint. By combining our complementary strengths and shared values, we will further strengthen our competitive edge and growth in India, while accelerating our joint expansion abroad. We are thrilled to embark on this exciting new journey together."

For EGLA, Mediobanca acted as sole financial advisor, Freshfields Bruckhaus Deringer as legal advisor, and law firm Shardul Amarchand Mangaldas & Co. was in charge of the Indian law aspects of the transaction.

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This press release may contain forward-looking information, including references that do not relate solely to historical data or current events and, as such, are uncertain. Forward-looking information is based on various assumptions, expectations, projections and forecast data relating to future events and is subject to multiple uncertainties and other factors beyond EuroGroup's control. There are numerous factors that can generate results and trends that differ significantly from the contents, implicit or explicit, of the forward-looking information, and therefore such information is not a reliable indication of future performance. EuroGroup has no obligation to publicly update or revise forward- looking information, either as a result of new information, future events or for other reasons, unless required by applicable law.

FOR FURTHER INFORMATION

EUROGROUP LAMINATIONS - INVESTOR RELATIONS

Matteo Picconeri | Head of Investor Relations | [email protected]

PRESS OFFICE | COMMUNITY - COMMUNICATION ADVISORS

Giulia Polvara | [email protected]| T. +39 334 2823 514 Valeria Longo | [email protected]| T. +39 351 1410 677

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ABOUT EGLA

EuroGroup Laminations is a world leader in the design, production and distribution of the motor core (stators and rotors) for electric motors and generators. The Group's business is organized along two segments: (i) EV & AUTOMOTIVE, which designs and produces the motor core of electric motors used in electric vehicle traction, as well as a wide range of non-traction automotive applications; and (ii) INDUSTRIAL, which designs and manufactures products used in various applications including among others industrial applications, home automation, HVAC equipment, wind energy, logistics and pumps. With registered office in Baranzate (MI), EuroGroup Laminations recorded revenues of approximately € 836 million in 2023, currently has a workforce of approximately 3,000 employees, 8 production plants in Italy and 6 abroad (2 in Mexico, 2 in China, 1 in the United States and 1 in Tunisia) and an Order Book for the EV & AUTOMOTIVE segment with an estimated value of approximately € 6.1 billion, and a pipeline of orders under discussion at approximately € 5.5 billion.

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