Fine Foods & Pharmaceuticals N T M S p A : Annual Financial Report as of 31.12.2024

Registered office: VIA BERLINO 39 VERDELLINO (BG) Registered in the BERGAMO Companies Register

Tax code and company reference number: 09320600969 Registered in the BERGAMO REA no. 454184 Subscribed share capital € 22,770,445.02 Fully paid up VAT number: 09320600969

31/12/2024 Consolidated Financial Statements

13 March 2025 Board of Directors

Table of contents

CORPORATE POSITIONS

Marco Francesco Eigenmann

Ada Imperadore Adriano Pala Ciurlo Deborah Maria Venturini Elena Sacco

Giovanni Eigenmann Marco Costaguta Paolo Ferrario Susanna Pedretti

Croci Guido Statutory Auditors Massimo Petrelli Ottavia Alfano

EY S.p.A.

Pietro Bassani

Appointed by the Board of Directors on 21 April 2021 under Article 27-bis of the Articles of Association.

Ada Imperadore Elena Sacco

Susanna Pedretti

Ada Imperadore Susanna Pedretti

Ada Imperadore Elena Sacco Susanna Pedretti

Ada Imperadore Deborah Maria Venturini Pietro Oriani

Report on Operations: Summary

Introduction 7

Information on the Group companies 7

Market development 12

Significant events 13

General economic performance 14

Management Performance 14

Business outlook 15

Fine Foods & Pharmaceuticals N.T.M. S.p.A. Share trend 16

Balance sheet and financial position 16

Financial situation 19

Income Statement 19

Alternative Performance Indicators 21

Main risks and uncertainties for the Group 22

Key non-financial indicators 28

Environmental information 28

Work Risk Assessment Document 29

Personnel Management Information 29

Research and development 30

Relationships with subsidiary, associated, parent companies and companies controlled by the parent companies 30

Related Party Relationships 30

Treasury shares buyback programme 30

Events following the end of the financial year 31

Directors' Report on Operations

‌Introduction

The 31 December 2024 Consolidated Financial Statements have been prepared under the International Accounting Standards - IAS and International Financial Reporting Standards - IFRS issued by the International Accounting Standards Board (IASB) and the interpretations of the IFRS Interpretations Committee (IFRSIC) and the Standing Interpretations Committee (SIC), recognised in the European Union under (EC) Regulation no. 1606/2002 and effective at the end of the financial year. All of the above standards and interpretations are hereafter referred to as "IAS/IFRS".

The scope of consolidation as of 31 December 2024 includes the Parent Company Fine Foods & Pharmaceuticals N.T.M. S.p.A. (hereafter "Fine Foods") and its wholly owned subsidiary, Euro Cosmetic S.p.A.

‌Information on the Group companies

Fine Foods & Pharmaceuticals N.T.M. S.p.A., registered and domiciled in Bergamo, is a joint-stock company, with its registered office in Via Berlino 39, Verdellino - Zingonia (BG). The Company, listed on the STAR segment of the MTA of Borsa Italiana, is an Italian independent Contract Development & Manufacturing Organisation (CDMO). The Group develops and manufactures contract products for the nutraceutical, pharmaceutical, and cosmetics industries.

Founded in 1984, Fine Foods proved to be a reliable and capable strategic partner for customers in the reference sectors. The company's organisation can provide successful design process and solid, long-term partnerships. The continuous search for excellence is part of the company's business model and includes research and development, innovation, process reliability, product quality, ESG, and sustainable management of the Group's supply chain. Fine Foods is a benefit corporation which relies on certifications and ratings under international standards. These guarantee its sustainability commitment across the business. With €244 million revenue in 2024, Fine Foods is a growing and future-oriented company.

The pharmaceutical production is carried out at the Company's 26,100 sqm Brembate plant. In the 2016-2020 period, €19 million

worth of investments were made to expand this plant, increasing

the total walkable covered area to 14,200 sqm. During the 2023 financial year, work began on further expanding the site, which included constructing a new building of around 10,000 sqm for the production of solid oral pharmaceutical forms. The Brembate pharmaceutical plant has the authorisation to produce pharmaceuticals and European GMP certification, both issued by the Italian Medicines Agency (AIFA, Agenzia Italiana del Farmaco), and occupational and environmental safety approval.

The following images show the current Brembate plant.

The following image shows the plant under construction, adjacent to the current pharmaceutical workshop (updated October 2024).

The production of nutraceutical products is carried out at the Company's 45,600 sqm plant in Zingonia, Verdellino. In the 2016-2019 period, €19.7 million worth of investments were made to expand this plant. This expansion was completed in 2019. The Zingonia -Verdellino plant produces nutraceutical products under HACCP (Hazard Analysis and Critical Control Points) regulations and GMP (Good Manufacturing Practices) applicable to food supplements. The Company has obtained authorisation from the Ministry of Health and is constantly monitored by the Local Health Authority (ATS). It holds appropriate certifications for environmental, food and worker safety and to produce medical devices. It successfully passed an inspection by the US Food Drug Administration in 2017. The Zingonia

• Verdellino plant has a total covered surface area of 28,800 sqm, including a recent expansion of 12,900 sqm of covered surface area resulting in an 80 per cent increase on the pre-existing surface area.

  The images below show the Zingonia plant from above.

  
  
  
  
  
  
  
  
  

  Fine Foods N.T.M. & Pharmaceuticals S.p.A. has a series of certifications.

  • UNI EN ISO 9001: standard defining quality management system requirements. Scope: research, development and production of food supplements, food for special groups, pharmaceuticals for third parties.

  • UNI EN ISO 14001: standard defining environmental protection management system requirements. Scope: research, development and production of food supplements, food for special groups, pharmaceuticals for third parties through the following processes: reception and storage of raw materials and packaging materials, grinding, mixing, granulation, screening, compressing, dedusting, filming, capsuling; packaging in bags, blisters, bottles, jars and tubes; storage and shipment of finished products.

  • ISO 45001: standard defining Occupational Health and Safety Management System requirements. Scope: research, development and production of food supplements, food for special groups, pharmaceuticals for third parties through the following processes: reception and storage of raw materials and packaging materials, grinding, mixing, granulation, screening, compressing, dedusting, filming, capsuling; packaging in bags, blisters, bottles, jars and tubes; storage and shipment of finished products.

• SMETA (Sedex Member Ethical Trade Audit): an audit and reporting methodology created by Sedex (one of the world's leading business ethics organisations providing an online platform used by over 60,000 members in more than 180 countries to help companies operate responsibly and sustainably, protect their workers and ensure an ethical supply chain) using a best practice model in ethic business audit techniques. The aim is to provide a central and standardised verification protocol for organisations interested in demonstrating a commitment to social issues and ethical and environmental standards in their supply chain. The Company uses a SMETA audit as a tool to enhance the practices adopted in its ethical and responsible business. SMETA bases its assessment criteria on the ETI (Ethical Trade Initiative) code, integrating it with applicable national and local laws and comprises four modules: health and safety, labour standards, environment and business ethics.

  Verdellino-Zingonia plant:

• UNI EN ISO 13485: standard defining the regulatory requirements of a quality management system to produce medical devices. Scope: contract designing and manufacturing of invasive medical devices concerning body orifices for gastrointestinal and oral use.

• FSSC 22000: is a certification scheme based on the ISO 22000 standard, which defines a food safety management system, integrated with the ISO/TS 22002-1 technical standard and FSSC 22000 additional requirements. Scope: contract manufacturing (dry mixing, fluid-bed granulation, compressing, film coating, encapsulation, mixing of water-based liquids), and packaging. This applies to food supplements and foods for special diets in the form of powders, granules, tablets, capsules, and liquids, packaged in plastic and polylaminate materials.

  Fine Foods N.T.M. & Pharmaceuticals S.p.A. adopts an Organisation, Management and Control System under Legislative Decree 231/2001 "regulating the administrative responsibility of legal persons, companies and associations, including those without legal status." This decree introduced the concept of administrative liability for legal entities arising from the commission of a criminal offence in the Italian regulatory system. Supervising the operation and compliance with the rules and principles in this system is entrusted to a Supervisory Body with independent initiative and control powers. In 2021 it became necessary to update the system following the new tax offences referred to in Article 25 quinquiesdecies and smuggling referred to in Article 25 sexiesdecies in Legislative Decree no. 231/2001. This updating included risk control for the offences referred to in the previous articles and a risk assessment review.

  On 14 November 2024, Fine Foods Board of Directors approved the revision of the Organisation, Management and Control System (OMC) to meet the new regulatory additions in the list of predicate offences of Legislative Decree 231/2001, to strengthen the Company's compliance system.

  Under Legislative Decree no. 24/2023, in July 2023, Fine Foods committed to respecting and guaranteeing the anonymity of those who report violations or offences identified within the company by managing the above reports using an external channel: The Teseo Whistleblowing ERM Platform.

  The subsidiary Euro CosmETIC S.p.A. is a Contract Development & Manufacturing Organisation (CDMO) specialising in the research, development, production, and commercialisation of cosmetic products.

  Since October 2021, Euro Cosmetic has been part of Fine Foods & Pharmaceuticals N.T.M. S.p.A., driving growth and innovation while ensuring increased production capacity, enhanced cross-functional expertise, and a broader range of solutions.

  The facility's surface area, along with its mixing plants, packaging lines, and laboratories, has expanded, reaching its current configuration: a modern plant spanning approximately 20,000 sqm. The Customer portfolio consists of prestigious cosmetics and pharmaceutical companies, operating in the GD (large-scale retail), GDO (organised large-scale retail) and Discount sectors and specialised channels such as national and international pharmacies and single- and multi-brand perfumeries. Euro Cosmetic develops and manufactures contract cosmetic products, including:

• ORAL HYGIENE: paste and gel toothpastes, with microencapsulated, mono- and bi-phasic active ingredients, alcoholic and non-alcoholic mouthwashes, and breath-freshening products.

• SKIN CARE: w/o, o/w emulsions, microemulsions, and gels.

• DEODORANTS: solid sticks, roll-ons, sprays, with or without antiperspirant, with or without alcohol, with "on-demand" active ingredients.

• BODY CLEANSING: bath foams, shower gels, intimate cleansers, liquid soaps.

• HAIR CARE shampoos, conditioners, modelling waxes, gels.

• PERFUMERY perfumed body waters, eau de parfum, after-shave.

The Quality Management System within Euro Cosmetic certifies:

• compliance with GMPc requirements (UNI EN ISO 22716);

• compliance with UNI EN ISO 9001 requirements;

• compliance with IFS - HCP requirements;

• compliance with COSMOS Natural & Organic requirements;

• compliance with ECO BIO COSMESI requirements;

• RSPO SCCS (Roundtable on Sustainable Palm Oil - Supply Chain Certification Standard).

Euro Cosmetic's facility is registered under MoCRA for the production of cosmetics for the US market and is authorised to manufacture medical and surgical aids.

The following image shows some of the Group's products (Nutra, Pharma and Cosmetics Business Units):

‌Market development

Fine Foods is one of the players in the European nutraceutical market and is focused on contract manufacturing of food supplements. The nutraceutical market is the Group's primary target sector, accounting for 58.3% of revenue from contracts with customers as of 31 December 2024. Within this market, the Group focuses on the Dietary Supplements segment in Europe. The segment's expected value is estimated to grow from €19.3 billion in 2024 to €23.6 billion in 2028, with a CAGR '24-'28 of 5.2%. As of 31 December 2024, revenue from customer contracts generated by the Group's Nutraceutical Business Unit was €142,206,355, down from €152,432,303 as of 31 December 2023.

The Pharmaceutical market is the Group's second-largest market, where 31.1% of revenue from customer contracts was recorded in 2024. As of 31 December 2024, the Company's Pharma Business Unit recorded revenue of €75,765,229, up from €67,932,316 at the end of the same period last year (+11.5% compared to the previous year).

Forecasts for European pharmaceutical production show growth from €670.4 billion in 2024 to €803.1 billion in 2028, reflecting a CAGR '24-'28 of 4.6% over the period. The pharmaceutical market was stable with customers loyal to their suppliers. Expected growth can be seen in the development of CDMOs that produce medicines for pharmaceutical companies (i.e. Fine Foods). The expected demand for pharmaceutical products is steadily growing due to the increase in the average age of the world's population and the rise in health standards adopted, especially in developed countries.

The Group's third-largest market is where Euro Cosmetic operates and recorded 10.6% of revenue from contracts with customers in

2024 for € 25,781,247.

These figures aggregate the values of the following categories: "Cosmetics" refers to the aggregation of Euromonitor's "Bath and Shower", "Deodorants", "Hair Care" and "Skin Care" categories. "Biocides" refers to the aggregation of the Euromonitor's "Oral Care", "Dermatologicals", "Surface Care" and "Adult Mouth Care" categories.

The diagram below shows the European trend and forecast for this market, in terms of value. The European cosmetics and biocides market is expected to accelerate its growth in the coming years. A CAGR '24-'28 of 5.2% was recorded for the relevant period.

Sources: Euromonitor International, Industrial, Pharmaceuticals, 2024 Edition Production MSP, EUR Fixed Ex Rates, Current Prices. Consumer Health, 2025 Edition, Retail Value RSP, EUR Fixed Ex Rates, Current Prices. Cosmetics as per aggregation of Euromonitor's Bath and Shower, Deodorants, Hair Care, Skin Care, Fragrances and Sun Care; Biocides as per aggregation of Euromonitor's Oral Care, Dermatologicals, Adult Mouth Care, 2024 Edition, Retail Value RSP, EUR Fixed Ex Rates, Current Prices.

The above analysis showed that Fine Foods is outperforming the market and its competitors. The reference markets showed high and steady growth and resilience during recessions. Despite this, Fine Foods has significantly outperformed its reference end markets over the past decade, with sales in 2024 at 2.6 times the level achieved in 2014.

Sources: Euromonitor International, Industrial, Pharmaceuticals, 2024 Edition Production MSP, EUR Fixed Ex Rates, Current Prices. Consumer Health, 2025 Edition, Retail Value RSP, EUR Fixed Ex Rates, Current Prices. Cosmetics as per aggregation of Euromonitor's Bath and Shower, Deodorants, Hair Care, Skin Care, Fragrances and Sun Care; Biocides as per aggregation of Euromonitor's Oral Care, Dermatologicals, Adult Mouth Care, 2024 Edition, Retail Value RSP, EUR Fixed Ex Rates, Current Prices. Methodology: the three variables' time series are divided by their respective 2013 value (the basis) and multiplied by a factor of 100; the considered variables are Fine Foods revenues, European Nutraceuticals - Vitamins & Dietary Supplements segment size, European Pharmaceuticals production size and European Cosmetics size

‌Significant events

On 25 July 2024, the Fine Foods & Pharmaceuticals N.T.M. S.p.A. Board of Directors appointed Pietro Oriani as Company General Manager, granting him ordinary management powers, effective as of 2 August 2024. During the same Board meeting, Giorgio Ferraris announced his resignation from his roles as Director and Chief Executive Officer due to personal reasons. The resignation took effect on 13 September 2024. On the same date, following a resolution approved by the Board of Statutory Auditors, the Board of Directors unanimously appointed by co-optation Pietro Oriani as the company's new Director and Managing Director.

On 02/08/2024, the Parent Company signed a preliminary contract for the purchase of approximately 21,000 sqm located in the municipality of Zingonia-Verdellino (BG), via Madrid 1, bordering the current Fine Foods nutraceutical plant. The total value of the investment is anticipated to be approximately € 4 million, of which € 3,270,000 has already been paid as an advance.

‌General economic performance

Throughout 2024, the global economy continued to face challenges driven by macroeconomic factors, including restrictive monetary policies, persistently high inflation in many regions, and geopolitical uncertainties such as the war in Ukraine and Israeli-Palestinian conflict.

Against this backdrop of persistent uncertainty, global economic growth in 2024 stood at 3.2%, down from 3.3% in 2023, according to the International Monetary Fund (IMF).

Major advanced economies experienced a slowdown: the US grew by 2.8%, while growth in the Euro area was limited to 0.8%. High inflation and elevated interest rates continued to restrain investment and domestic demand in these regions.

Among emerging economies, China recorded GDP growth of 4.8% in 2024, supported by domestic economic stimulus policies, despite structural challenges in the real estate sector and an ongoing transition towards a more internal consumption-driven economy. However, geopolitical uncertainty and public debt management remain key concerns for the country. India, by contrast, maintained growth rates above 6%, bolstering the broader emerging economies.

‌Management Performance

The above table provides a preliminary overview of the Group's financial performance in 2024: despite the slight decline in revenue of around 3% compared to 2023, EBITDA recorded significant growth of 37%, reaching €30 million as of 31 December 2024. The EBITDA margin increased from 8.8% as of 31 December 2023 to 12.5% as of the end of FY 2024.

As of 31 December 2023, EBIT was affected by a €4.4 million goodwill write-down from the former Pharmatek CGU. Following the

impairment test, EBIT was €14.6 million as of 31 December 2024.

The 2024 financial year closed with a net profit of €8.2 million, compared to a net loss of €3.5 million as of 31 December 2023. Despite the overall loss, the 2023 net result was positively impacted by the Parent Company's asset securities management (positive fair value change of €1.7 million), which was concluded in 2024, without any significant impact on the Income Statement.

The 2024 revenue of the Parent Company Fine Foods & Pharmaceuticals N.T.M. S.p.A. were €218 million, compared to €220.4 million in the previous year, with a slight decrease of -1.1%.

The Pharma Business Unit continued its growth, with a turnover to €75.8 million and an 11.5% increase compared to 2023. This helped offset a -6.7% decline in the Nutra Business Unit, which reported revenue of €142.2 million in 2024 down from €152.4 million in the previous year. This decrease was attributed to the temporary realignment of customer stock levels, a process that continued throughout 2024.

The Parent Company's EBITDA increased by more than 28% compared to 2023 and was €30.9 million (€24 million as of 31/12/2023).

The improvement in profit margins was largely driven by a reduction in the cost impact of raw materials and packaging materials on

sales. This was the result of the revision of the sales pricing policy implemented in the second half of 2023 and a decrease in raw material and packaging procurement costs.

The Nutra Business Unit achieved an EBITDA of €22.3 million in 2024, marking a 35.2% increase compared to 2023. The Pharma Business Unit closed the year with an EBITDA of €8.6 million, reflecting a 13.5% rise from 2023.

The Parent Company's Ebitda Margin as of 31 December 2024 was 14.2%, up sharply from 10.9% in 2023. The Parent Company

closed with a net profit of €12 million as of 31 December 2024.

The Cosmetics Business Unit recorded revenues of €25.8 million in 2024, down from €31.5 million at the end of the previous year. This decrease was due to the postponement of new business development initiatives and a revision of the customer portfolio, following the Business Unit reorganisation. The Company's EBITDA showed a negative balance of €0.5 million (-€1.8 million as of 31 December 2023): this result shows an improving trend in the second half of 2024.

‌Business outlook

Throughout 2024, the global economy continued to face challenges driven by macroeconomic factors, including restrictive monetary policies, persistently high inflation in many regions, and geopolitical uncertainties such as the war in Ukraine and Israeli-Palestinian conflict.

Against this backdrop of persistent uncertainty, global economic growth in 2024 stood at 3.2%, down from 3.3% in 2023, according to the International Monetary Fund (IMF).

Major advanced economies experienced a slowdown: the US grew by 2.8%, while growth in the Euro area was limited to 0.8%. High inflation and elevated interest rates continued to restrain investment and domestic demand in these regions.

Among emerging economies, China recorded GDP growth of 4.8% in 2024, supported by domestic economic stimulus policies, despite structural challenges in the real estate sector and an ongoing transition towards a more internal consumption-driven economy. However, geopolitical uncertainty and public debt management remain key concerns for the country. India, by contrast, maintained growth rates above 6%, bolstering the broader emerging economies.

The IMF projects global growth in 2025 and 2026 to remain consistent with 2024, at 3.3%, below the historical average of 3.7% (2000-2019). The US economy is expected to grow by 2.7% in 2025 and 2.1% in 2026, supported by domestic demand and favourable financial conditions. In contrast, the Euro area is forecast to expand by just 1.0% in 2025 and 1.4% in 2026, constrained by political uncertainty and a slowdown in manufacturing. Emerging economies are anticipated to continue their expansion, with China projected to grow at 4.6% and India at approximately 6.5%.

Global inflation is on a downward trajectory, with a forecast of 4.2% for 2025, bringing it closer to the targets set by major central banks, although disparities between advanced and emerging economies persist. While global financial conditions remain relatively accommodative, the strengthening of the US dollar, driven by persistently high interest rates, could impact emerging economies and global trade balances.

The key risks to the global economy include the potential resurgence of geopolitical tensions, the possible escalation of protectionist measures, and fluctuations in financial markets, which could negatively affect growth dynamics in the coming months.

The market segments in which the Group operates are expected to grow in the coming years, in Europe and globally. The trend of major industry players outsourcing nutraceutical, pharmaceutical, and cosmetics production to subcontractors was confirmed. Fine Foods & Pharmaceuticals N.T.M. S.p.A. aims to strengthen its competitive position by expanding its market share across its three core business units-Nutra, Pharma, and Cosmetics-enhancing their synergies. The Group is attentive to potential growth opportunities through acquisitions.

The Nutra BU will maintain its focus on quality, innovation, and the development of advanced services to support its customers. The planned production capacity expansion, initiated in 2024 with the purchase of land, was confirmed, with initial investments scheduled for 2025 to extend the production facility.

In 2025, the Pharma BU will continue to focus on managing the anticipated strong growth from significant multi-year agreements signed with key international customers. The production plant expansion, which started at the end of 2023, is progressing as planned and will be completed in 2025, with revenues expected to start in 2026.

Following a phase of integration, reorganisation, and optimisation-supported by targeted investments and the appointment of experienced industry professionals-the Cosmetics BU is beginning to show positive signs. A gradual improvement in revenue and profit margins is anticipated in 2025, contributing positively to the Group's overall performance.

While, due to the nature of the business, top line growth may not be consistently visible on a quarterly basis, a strong order backlog for the current year and existing multi-year agreements support the expectation of maintaining historical revenue and margins growth trends. This is underpinned by an increasingly strong and reliable organisational structure.

The Group will continue its commitment to sustainability, reinforcing its position as a trusted partner by offering solutions that align with rising market expectations.

‌Fine Foods & Pharmaceuticals N.T.M. S.p.A. Share trend

As of 30 December 2024, the Fine Foods & Pharmaceuticals N.T.M. S.p.A. share was listed at €7.50 per share, with a decrease of

14.5 percentage points than the listing as of 29 December 2023 (€8.77 per share). Market capitalisation as of 30 December 2024 was €191.7 million.

The diagram below shows the Fine Foods share performance compared with the leading stock market indices as of 30 December 2024:

‌Balance sheet and financial position

The diagram below shows the net financial debt under Consob recommendation of 21 April 2021 and ESMA32-382-1138 guidelines.

For a better understanding of the Company's balance sheet and financial position, a reclassified Balance Sheet is provided below.

Net invested capital as of 31 December 2024 was €167.4 million (€170.5 million as of 31 December 2023) and was covered by:

• Shareholders' equity of €132.1 million (€126.9 million as of 31 December 2023);

• Net Financial Position of €35.3 million as of 31 December 2024, reflecting an improvement of approximately €8.2 million compared to the previous year (€43.6 million). Operations generated a positive cash flow of €50.8 million before capital expenditure. This was mainly offset by net investments (€34.7 million) made in the period, financial charges and tax payments (€6.5 million), and dividend distribution (€2.9 million).

  Working capital as of 31 December 2024 was € 23.4 million compared to € 42.6 million at the end of the previous financial year. Commercial Net Working Capital as of 31 December 2024 was €32.9 million compared to €48.1 million as of 31 December 2023. This reduction was mainly driven by a decrease in inventories, which fell from €42.4 million to €31.9 million (-€10.6 million) and an increase in trade payables, rising from €32.7 million to €36.6 million as of 31 December 2024 (+€4.1 million). Other current liabilities increased mainly due to higher accruals of deferred income.

  Tangible Fixed Assets increased by approximately €19.2 million in 2024, due to net investments of €33.6 million and amortisation, depreciation, and impairment losses for the period of about €14.4 million. In 2024, extraordinary investments of €25.8 million were made to expand the pharmaceutical and nutraceutical plants.

  Intangible Fixed Assets and rights of use were €16 million as of 31 December 2024, remaining largely unchanged with the previous year-end. (€16.3 million at the end of the previous year). Other non-current assets declined, mainly due to the use of deferred tax assets associated with past tax losses (IRES) by the Parent Company.

  Financial indicators

  Indicator	31/12/2024	31/12/2023	Calculation Method
  Capital structure margin	(10,050,557)	3,721,696	Shareholders' equity - Property, plant and machinery -Other intangible assets - Rights of use
  Asset ratio	0.9	1.0	Shareholders' equity/(Property, plant and machinery -Other intangible assets - Rights of use)
  Liquidity margin	(6,145,412)	(32,425,736)	Total current assets - Inventories - Total current liabilities
  Current ratio	0.9	0.7	(Total current assets - Inventories)/Total current liabilities
  Net Working Capital/Turnover	13.5%	19.1%	(Trade receivables + Inventories - Trade payables) / Turnover
  Cash Conversion Ratio	48.5%	38.9%	Operating cash flow / Adjusted EBITDA
  Leverage	1.1	1.7	Net Financial Position / Adjusted EBITDA
  DSO	56	55	(Trade receivables/Sales revenue)*365
  DPO	95	75	(Trade payables/Raw material purchase cost)*365
  DIO	83	98	(Inventories/Raw material purchase cost)*365

  ‌Financial situation

  
  
  

  To better understand the Company's operating results, a reclassification of the Income Statement is provided below.

  ‌Income Statement

  
  
  

  Item			31/12/2024	%	31/12/2023	%	Absolute change	% Changes
  Revenue from contracts with customers			243,752,830	100.0%	251,811,791	100.0%	(8,058,962)	(3.2%)
  Costs for consumption of raw materials,
  change in inventories of finished goods			(141,136,684)	(57.9%)	(158,188,424)	(62.8%)	17,051,739	(10.8%)
  and work in progress.
  INDUSTRIAL ADDED VALUE			102,616,146	42.1%	93,623,368	37.2%	8,992,778	9.6%
  Other revenue and income			1,317,440	0.5%	1,095,196	0.4%	222,244	20.3%
  Costs for services			(23,770,730)	(9.8%)	(25,888,270)	(10.3%)	2,117,540	(8.2%)
  Personnel costs			(47,623,798)	(19.5%)	(44,431,271)	(17.6%)	(3,192,527)	7.2%
  Other operating costs			(2,118,683)	(0.9%)	(2,129,576)	(0.8%)	10,893	(0.5%)
  EBITDA			30,420,374	12.5%	22,269,447	8.8%	8,150,927	36.6%
  ADJUSTED EBITDA			33,182,689	13.6%	25,833,182	10.3%	7,349,507	28.4%
  Amortisation, impairment losses	depreciation,	and	(15,776,371)	(6.5%)	(21,203,442)	(8.4%)	5,427,071	(25.6%)
  EBIT			14,644,003	6.0%	1,066,005	0.4%	13,577,998	1273.7%
  ADJUSTED EBIT			17,406,318	7.1%	9,705,213	3.9%	7,701,105	79.4%
  Financial income			699,711	0.3%	339,524	0.1%	360,187	106.1%
  Financial charges			(3,498,895)	(1.4%)	(4,964,248)	(2.0%)	1,465,354	(29.5%)
  Changes in fair value of financial assets			(12,881)	(0.0%)	1,703,519	0.7%	(1,716,400)	N/A
  and liabilities
  INCOME BEFORE TAXES			11,831,939	4.9%	(1,855,199)	(0.7%)	13,687,138	N/A
  ADJUSTED INCOME BEFORE TAXES			14,594,254	6.0%	6,784,008	2.7%	7,810,245	115.1%
  Income taxes			(3,676,060)	(1.5%)	(1,666,899)	(0.7%)	(2,009,161)	120.5%
  Profit (loss) for the financial year			8,155,879	3.3%	(3,522,098)	(1.4%)	11,677,977	N/A
  ADJUSTED income/(loss)			10,192,838	4.2%	4,928,652	2.0%	5,264,186	106.8%

  The table below shows the reconciliation of Industrial Added Value, EBITDA, EBIT, Income before taxes, and Profit (Loss) for the period, and the Adjusted related values.

  Industrial Added Value was determined using the following income statement classification:
  	31/12/2024	31/12/2023
  Revenue from contracts with customers	243,752,830	251,811,791
  Costs for consumption of raw materials, change in inventories of finished goods and work in progress	(141,136,684)	(158,188,424)

  Industrial Added Value 102,616,146 93,623,368

  The diagram below shows the definition of the subtotals for the other income statement items.

  Profit/(loss) for the financial year (1)

  Income taxes

  Income before taxes (2)

  Changes in fair value of financial assets and liabilities Financial charges

  Financial income

  EBIT (3)

  Amortisation

  EBITDA (4)

  31/12/2024 31/12/2023

  8,155,879 (3,522,098)

  (3,676,060) (1,666,899)

  11,831,939 (1,855,199)

  12,881 (1,703,519)

  3,498,895 4,964,248

  (699,711) (339,524)

  14,644,003 1,066,005

  15,776,371 21,203,442

  30,420,374 22,269,447

  Extraordinary and non-recurring items impacting EBITDA, that have been adjusted during 2023 and 2024, are shown in the table below. For further details, please refer to what is reported below.

  Non-recurring income and charges attributable to Fine Foods Non-recurring income and charges attributable to Euro Cosmetic	31/12/2024 2,762,315 -	31/12/2023 -3,563,735
  Total non-recurring income and charges (5)	2,762,315	3,563,735

  As a result of these non-recurring costs, Adjusted EBITDA, Adjusted EBIT and Adjusted income before taxes and Adjusted profit (loss) are shown in the table below.

  	31/12/2024	31/12/2023
  ADJ EBITDA (4) + (5)	33,182,689	25,833,182
  Demolition of Brembate Building (6)	-	675,472
  Goodwill impairment (7)	-	4,400,000
  ADJ EBIT (3) + (5) + (6) + (7)	17,406,318	9,705,213
  Income before taxes	11,831,939	(1,855,199)
  Non-recurring income and charges (5)	2,762,315	3,563,735
  Demolition of Brembate Building (6)	-	675,472
  Goodwill impairment (7)	-	4,400,000
  ADJ Income before taxes	14,594,254	6,784,008
  Income taxes	(3,676,060)	(1,666,899)
  tax effect on non-recurring income and charges (5 to 8)	(725,356)	(188,457)
  ADJ income/(loss) 10,192,838 4,928,652

  Revenue from sales and services decreased from €251.8 million as of 31 December 2023 to €243.8 million as of 31 December 2024, with a slight decrease of 3.2%. Q4 2024 recorded the Group's highest quarterly revenue.

  Raw material costs on sales revenues, of approximately 57.9%, increased compared to the end of the previous year (62.8%).

  Cost of Services decreased by €2.1 million from €25.9 million as of 31 December 2023 to €23.8 million at year-end 2024. This change was influenced by a reduction in costs, including utilities (-€1.3 million), external processing (-€0.6 million), remuneration of Directors and Statutory Auditors (-€0.7 million mainly due to lower bonuses accrued). These savings were partially offset by a non-competition agreement signed with the former CEO, Ferraris, of €0.7 million.

  Personnel costs were €47.6 million, reflecting an increase of €3.2 million compared to the same period in FY 2023. This rise was primarily driven by an estimated provision for salary adjustments (€1.5 million), and costs associated with the termination of employment for certain Parent Company executives (€0.5 million).

  The Group's Adjusted EBITDA in 2024 was €33.2 million (13.6% of EBITDA Margin), up from €25.8 million in the previous financial year (10.3% of EBITDA Margin). The year just ended benefited from the revised sales price policy implemented in H2 2023 and a decrease in the procurement costs of raw and packaging materials. This adjustment reduced the proportion of raw and packaging material costs on Sales Revenue. In addition, the continuous improvement programmes initiated by Fine Foods to enhance operational efficiency yielded positive results.

  Adjusted EBIT reached €17.4 million as of 31 December 2024, compared to €9.7 million recorded on 31 December 2023. Adjusted Income Before Taxes as of 31 December 2024 was €14.6 million compared to €6.8 million in the previous year. The Group closed 2024 with an Adjusted profit of €10.2 million, a significant increase from €4.9 million in 2023.

  Non-recurring expenses were incurred in 2024, impacting EBITDA and relating to the Parent Company, Fine Foods. Particularly:

  • Severance and redundancy incentives for certain executives were approximately €473,000.

  • A non-competition agreement was signed with Ferraris for approximately €700,000.

  • A risk provision of €1.6 million was allocated for salary adjustments.

    In 2023, the subsidiary Euro Cosmetic had non-recurring expenses that affected EBITDA, amounting to €3.6 million, as a result of the

    reorganisation following the merger. These include:

  • a one-off cost of € 1,634,000 of which € 1,430,000 due to inventory disposals and € 204,000 to obsolescence provisions;

  • an extraordinary cost of € 765,000 due to former Pharmatek personnel who were not transferred to the Trenzano plant, and substitute and transfer indemnities paid after the merger.

  • other one-off operating costs including: € 409,000 incurred to materially dispose of inventories, € 224,000 incurred for extra external processing following the reorganisation, € 115,000 as penalties and indemnities to customers of the former Pharmatek, € 129,000 as a loss on disposal of assets following the sale of an important piece of machinery of the former Pharmatek, € 108,000 as contingency liabilities of the former Pharmatek and € 178,000 for the non-recognition of grants for over-depreciation of the former Pharmatek.

  EBIT 2023 saw a non-recurring cost for the demolition of a Parent Company building in Brembate carried out in October 2023, which generated an impact on the Income Statement of € 675,000, and the Cosmetics Business Unit's goodwill impairment (recorded as of 30 June 2023) for € 4.4 million.

  Regarding the tax effects of these adjustments: the 2023 adjustments are fully non-deductible, except for the cost associated with the demolition of the building, which has been subject to IRAP+IRES figurative taxes. The adjustments for 2024 are considered deductible only for IRES purposes, except for the costs allocated to the risk provision, on which IRAP+IRES figurative taxes have been applied.

  ‌Alternative Performance Indicators

  
  
  

  To facilitate an understanding of Fine Foods' financial and economic performance, the directors have identified in the previous paragraphs several Alternative Performance Indicators ("APIs"). These indicators are the tools that assist the directors in identifying operating trends and making investments, resource allocations and other operating decisions.

  For a correct interpretation of these APIs, the following should be noted:

• these indicators are constructed exclusively from historical data and are not indicative of the company's future performance;

• APIs are not required by the International Financial Reporting Standards (IFRS) and, although derived from the Company's Financial Statements, are not subject to audit;

• the APIs must not be considered as a replacement for the indicators provided for by the International Financial Reporting Standards (IFRS);

• these APIs should be read alongside the financial information derived from the Company's Financial Statements;

• the definitions of the indicators used, since they do not derive from the reference accounting standards, may not be consistent with those adopted by other groups/companies or comparable to them;

• the APIs used have been developed with continuity and uniformity of definition and representation for periods when financial information is included in these consolidated interim Financial Statements.

  The APIs below were selected and presented in the Report on Operations because the Group believes that:

• the Net financial debt allows a better assessment of the overall debt level, the equity strength and the debt repayment capacity;

• Fixed assets and Net investments in tangible and intangible fixed assets, calculated as the sum of increases (net of decreases) in tangible fixed assets (including the right to use leased assets) and intangible fixed assets - Net working capital and Net invested capital allow a better assessment of the ability to meet short-term commercial commitments through current commercial assets and the consistency between the investments and financing sources structure over time;

• EBITDA is the operating result before depreciation, amortisation and provisions. The defined EBITDA is a measure used by management to monitor and evaluate the Company's operating performance. EBITDA is not an IFRS accounting measure and is an alternative measure for evaluating the Company's operating performance. Since the reference accounting principles do not regulate the EBITDA composition, the criteria for its definition applied by the Company may not be consistent with those adopted by other companies or comparable to them.

• The ADJUSTED EBITDA is the operating result before Amortisation, depreciation and provisions minus operating revenue and costs that, although inherent to the business, are non-recurring and significantly impact results. The defined ADJUSTED EBITDA is a measure used by Company management to monitor and evaluate the Company's operating performance. ADJUSTED EBITDA is not an IFRS accounting measure and is an alternative measure for evaluating the Company's operating performance. Since the reference accounting principles do not regulate the ADJUSTED EBITDA composition, the criteria for its definition applied by the Company may not be consistent with those adopted by other groups/companies or comparable to them.

• The ADJUSTED EBIT is the Company operating result minus operating revenue and costs that, although inherent to the business, are non-recurring and significantly impact results. The Company's calculation criteria may not be consistent with those adopted by other groups. The balance obtained by the Company may not be comparable.

• The ADJUSTED INCOME BEFORE TAX is the Company income before taxes minus operating revenue and costs that, although inherent to the business, are non-recurring and significantly impact results and the fair value change of warrants. The Company's calculation criteria may not be consistent with those adopted by other groups. The balance obtained by the Company may not be comparable.

• The ADJUSTED NET INCOME is the Company net result minus operating revenue and costs that, although inherent to the business, are non-recurring and significantly impact results and the fair value change of warrants, after deduction of the relevant tax. The Company's calculation criteria may not be consistent with those adopted by other groups. The balance obtained by the Company may not be comparable.

These indicators are commonly used by analysts and investors in the sector to which the Company belongs to evaluate the Company's performance.

‌Main risks and uncertainties for the Group

The following paragraph illustrates the main risks to which the Group is exposed and the director's mitigating actions.

Liquidity risk

The Group monitors the liquidity shortage risk using a liquidity planning tool. The Group's objective is to maintain a balance between continuity in the availability of funds and flexibility of use with tools such as credit lines and bank loans, mortgages and bonds. The Group's policy is to keep loan numbers due in the next 12 months around 60%. As of 31 December 2024, 34.3% of the Group's debt is due in less than one year (2023: 83.8%), calculated based on the book value of debts in the Consolidated Financial Statements. If the Parent Company Fine Foods had not temporarily reclassified the medium/long-term debt to Intesa of the original € 70 million, for

€ 36.4 million, in current bank borrowings in 2023, the share of debt due in less than one year would have been 29.9%.

The table below summarises the Group's due date profile of financial liabilities based on undiscounted contractually agreed payments.

To support the significant ongoing investments, which were primarily covered by the cash generated from business operations in 2024, the Parent Company is considering securing a new bank loan to finance the remaining investments.

Interest rate risk

Interest rate risk is a function of interest rate trends and the company's related positions, identifiable in bond investments and debt transactions. The risk is the increase in borrowing costs associated with rising interest rates.

This risk may be indicated differently depending on the valuation parameter.

• Cash Flow Risk: this is related to the possibility of realising losses connected to a reduction in expected receipts or an increase in expected costs. It is linked to items with payment profiles indexed to market rates. As these rates change, the company's position will change (variable rate financing)

• Fair Value Risk: this is linked to the possibility of losses related to an unexpected change in the value of an asset or liability following a sudden change in rates.

Credit risk

This is the risk that a customer or a financial instrument counterparty causes a financial loss by failing to fulfil an obligation; for the Group, the risk is mainly related to the failure to collect trade receivables. Fine Foods' main counterparties are major companies active in the nutraceutical and pharmaceutical sectors. The Group carefully evaluates its customers' credit standing, considering that, due to its business's nature, the relationships with its customers are long-term.

Price risk

The price risk is mitigated using a solid cost accounting procedure that can identify the production cost. In this way, remunerative and competitive prices are established and adopted with the customer.

Risk of changes in cash flows

The risk of changes in cash flows is not considered significant in view of the Group's balance sheet. It is considered that the risks to which the business activity is exposed are not higher than those physiologically connected to the overall business risk.

Tax risks

The Group companies are subject to the taxation system under applicable Italian tax laws. Unfavourable changes to this legislation, and any Italian tax authorities or Law orientation related to the application, interpretation of tax regulations to determine the tax burden (Corporate Income Tax "IRES", Regional Tax on Production Activities "IRAP") and the Value Added Tax "VAT", could have significant negative effects on the companies economic and financial situation.

The Group is exposed to the risk that the financial administration or law may adopt different interpretations or positions concerning tax and fiscal legislation from those adopted by Fine Foods Group in carrying out its business. Tax and fiscal legislation, and its interpretation, are complex elements due to the continuous legislation evolution and interpretation from administrative and jurisdictional bodies.

The Group will periodically undergo inspections to verify such regulations' correct application and the correct payment of taxes. Disputes with Italian or foreign tax authorities could involve the companies in lengthy proceedings, resulting in the payment of penalties or sanctions, with possible significant adverse effects on its business, economic and financial situation.

Due to the complexity and continuous changes in tax and fiscal regulations and their interpretation, it is impossible to exclude that the financial administration or law may make interpretations, or take positions, that contrast with those adopted by the Group. This might result in negative consequences on its economic and financial situation.

Risks related to the information system's reliability

The Group is exposed to the risk of accidental events or malicious actions to IT systems (hardware, software, databases, etc.) that impact their reliability, with potential negative effects on the Group's economic, capital and financial situation.

The Group implements security procedures and policies to ensure proper IT systems management. It has perimeter and internal security equipment. Infrastructures are equipped with high reliability techniques for critical systems and are checked annually. The IT department periodically conducts simulated external attacks to assess the robustness of the security system. The Group has a disaster recovery plan to ensure the reliability of its IT systems. The Group's IT systems comply with the General Data Protection Regulation.

The IT systems department is subject to internal audits, by Quality Assurance, and external audits, by certification bodies and customers.

Risks related to the concentration of revenue on major customers

The Group has a significant concentration of revenue on its main customers, amounting to approximately 63.3% on the top five customers as of 31 December 2024. The loss of one or more of these relationships would have a significant impact on Group revenue. As a rule, contracts with the Group's main customers do not have minimum guaranteed quantities. If these relationships continue, there is no certainty that the amount of revenue generated by the Group in subsequent years will be similar to or greater than those recorded in previous years. The possible occurrence of such circumstances could have significant adverse effects on the Group's business and economic, capital and financial situation.

The Group mitigates this risk by building stable and long-lasting relationships with its customers and customer loyalty, through commercial activities for acquiring new customers and M&A for identifying and acquiring target companies.

Risks related to production authorisations

The Group faces the risk of non-approval, by governmental or health authorities and institutions, of the individual production stages that characterise its activities, if it is found not to comply with the regulatory requirements applicable to plants and the production of pharmaceuticals and nutraceutical products, with potentially adverse effects on its economic and financial position.

During the many audits conducted by customers and authorities, the Group has never received any reports of critical non-compliance. GMP compliance is ensured by applying strict quality procedures and periodic systemic internal audits.

In addition, the Group has a procedure for promptly handling any observations or deviations identified by the authorities.

Risks relating to environmental, occupational health and safety regulations

The Group is exposed to the risk of accidental contamination of the environment in which its employees work, and possible injuries in the workplace. Any violations of environmental regulations, and the adoption of prevention and protection systems in the field of safety that are not appropriate to the Group's needs, could lead to the application of administrative sanctions, including significant monetary

sanctions or an injunction, including suspensions or interruptions of production, with potentially adverse effects on the Group's economic, capital and financial position.

To address these risks, the Group has a robust system for managing worker health and safety standards and environmental protection of the areas where the Group operates. The Group has ISO45001:2018 (OH&S) and ISO14001:2015 (environment) certifications attesting to the proper system structuring and application and is subject to annual certified bodies' and internal audits.

Risks related to climate change: physical risks

Climate change can produce systemic effects that negatively affect financial activities.

Physical risks of climate change can be classified as "acute" if caused by extreme events such as droughts, floods, and storms, or

"chronic" if caused by progressive changes like rising temperatures, sea-level rise, water stress, and resource depletion.

The Group faces potential operational disruptions due to extreme weather events that could damage critical infrastructure, plants, machinery, and facilities. These events may lead to increased repair and maintenance costs, and production delays or shutdowns, impacting business continuity, reputation, and profitability.

Extreme weather conditions, such as heavy rainfall and floods, could compromise the quality of water used in production processes, which will raise purification costs.

The Group is aware of potential climate change effects on infrastructure from extreme events and the possible rise in energy usage due to increasing temperatures and is assessing how to address these challenges through transition plans or business resilience analyses. The Group has insurance coverage for "catastrophic risks." The Group is continually updating its expertise and capabilities in handling "transition risks" also through its association with Farmindustria, to align its energy efficiency with international standards.

The Group implemented a dedicated team coordinated by an energy manager which implements measures to increase all Group sites' energy efficiency.

It carries out operations to reduce water consumption and an internal task force meets periodically to monitor improvements and the implemented measures effectiveness.

Climate change risks: transition risks

These risks are tied to the challenges and costs associated with moving to a more sustainable and less carbon-dependent economic model. This situation is driven by the implementation of climate protection Directives and Regulations, advancements in technology, and shifts in market confidence and consumer preferences.

The absence of investments to reduce climate impact by lowering energy consumption may have a negative effect on the Group's Income Statement due to increases in operating costs and exposure to energy price fluctuations and possible regulatory measures

e.g. introducing carbon taxes.

Water scarcity for industrial purposes, particularly following extended periods of drought, can negatively affect production efficiency. Similarly, extreme weather events can disrupt the supply chain, causing partial or complete interruptions in the supply chain.

The Group is aware of potential climate change effects on infrastructure from extreme events and the possible rise in energy usage due to increasing temperatures and is updating its risk assessment. The Group has insurance coverage for "catastrophic risks." The Group is continually updating its expertise and capabilities in handling "transition risks" also through its association with Farmindustria, to align its energy efficiency with international standards.

The Group implemented a dedicated team coordinated by an energy manager which implements measures to increase all Group sites' energy efficiency.

It carries out operations to reduce water consumption and an internal task force meets periodically to monitor improvements and the implemented measures effectiveness.

Energy cost risk

Energy costs remain high compared to historical prices, with high volatility. The supply of energy available for the European market and domestic energy stocks are the reasons why the estimated negative impacts on the Group's economic, financial and capital position, and the likelihood of their occurrence, may be gradually reduced.

The Group assembled a team coordinated by an energy manager to monitor the energy market trend to minimise the impact of energy costs and implement appropriate measures to increase production sites' energy efficiency. Fine Foods installed two co-generators for self-generation of electricity from gas combustion, which eliminated its exposure to the risk of electricity component fluctuations and

optimised the efficient use of the heat developed through co-generation. There are photovoltaic systems at three plants with a total power of 850 kW covering part of the energy requirements (approx. 1% of the total energy demand). To manage the fluctuation of energy costs, part of them will be rebilled during 2025.

Legal and reputational risks related to the mismanagement of Substances of Very High Concern

Exceeding pollution limits or mishandling hazardous chemicals that have long-term effects on human health or the environment (as listed in the REACH list and Annex VI of the CLP Regulation) can result in fines and operational restrictions and severely damage Fine Foods' reputation. The use of substances that hinder the recycling of safe, high-quality secondary materials or most harmful substances (as listed by ECHA) can expose the company to additional legal and reputational risks. This risk may arise from either direct impacts of business activities or regulatory requirements.

The Group has a robust system for managing worker health and safety standards and environmental protection of the areas where the Group operates. The Group has ISO45001:2018 (OH&S) and ISO14001:2015 (environment) certifications attesting to the proper system structuring and application and is subject to annual certified bodies' and internal audits.

Operational risk from a shortage of virgin raw materials

The Company faces operational risks related to the scarcity of virgin raw materials, such as palm oil, coffee, and various natural extracts. These shortages can increase operational costs for Fine Foods due to competition for supply. As these commodities are subject to stricter regulations, their limited availability and rising costs may negatively impact the continuity of production and profitability.

Fine Foods can adjust its selling prices if there are raw material cost increases. The purchasing department informs the sales department of raw material price increases, the sales department assesses its impact on the pricing of products that include this raw material and shares it with the customer.

The Group maintains a stock-pile of continuously used raw materials which is sufficient to cover a sudden lack on the market.

Economic and reputational risks due to accidents and injuries

Accidents involving employees could lead to operational disruptions and reputational damage, potentially slowing down company operations. If such incidents affect employee health and safety, the Company could face legal claims, compensation costs, and sanctions for non-compliance with regulations and organisation systems (OMC 231). An unsafe working environment could reduce the Company's appeal to potential investors and diminish employee motivation, leading to higher turnover rates.

To address these risks, the Group has a robust system for managing worker health and safety standards and environmental protection of the areas where the Group operates. The Group has ISO45001:2018 (OH&S) and ISO14001:2015 (environment) certifications attesting to the proper system structuring and application and is subject to annual certified bodies' and internal audits.

Risks related to human capital management

The growing demand in the labour market for certain technical and specialised profiles makes them highly attractive, which exposes the Company to the risk of losing highly qualified personnel, who are in short supply. Failure to implement the necessary policies to successfully manage human capital can have a negative impact on the Company's economic, capital and financial position.

To address these risks, it is necessary to adopt new, more inclusive business models and policies to enhance and promote talent. The Company implemented human capital management policies and procedures designed to support employees throughout their lifecycle within the Company. This includes recruitment, onboarding, continuous training programmes, internal career development paths, work-life balance initiatives, workplace health promotion (WHP) measures, and the activation of various internal communication channels.

Risks related to salary adjustments claims

Fine Foods develops and manufactures contract products including food supplements, nutraceuticals, and pharmaceuticals, employing more than 650 staff under the National Collective Labour Agreement for the Food Industry. Workers in the production departments are required to clock in at turnstiles before proceeding to the changing rooms, where they change into company-issued attire such as

trousers, tunics, caps, shoes, and, if necessary, beard covers. Once dressed, workers clock in again at the start of their shift and proceed to their workstations, with the same process being followed at the end of their work shift. Since the end of 2024, the Company has received claims, mainly from former employees, for salary adjustments relating to the time taken to change into and out of company-provided clothing in the changing rooms. Some of them request additional payment for salary differences for the time spent travelling between the external turnstiles and the changing room, and vice versa. The Company is defending itself in ongoing legal proceedings and is considering negotiating an agreed regulation with the trade unions. This would regulate the process of dressing for employees and offer a resolution for past claims. The Company allocated a special provision for the above risk as of 31 December 2024.

Risks related to supplier relationships: shortages of raw and packaging materials.

Considering the complex geopolitical situation and climatic risks that may jeopardise some harvests, the Group risks increased costs in 2025 for the purchase of raw and packaging materials necessary to carry out its business, and delays in production due to the more difficult availability of raw and packaging materials, with potential adverse effects on the Group's business, economic, capital and financial position. The Group's business is characterised, in certain cases, by a limited substitutability of suppliers, particularly in the pharmaceutical sector.

Fine Foods can adjust its selling prices if there are raw material cost increases. The purchasing department informs the sales department of raw material price increases, the sales department assesses its impact on the pricing of products that include this raw material and shares it with the customer.

The Group maintains a stock-pile of continuously used raw materials which is sufficient to cover a sudden lack on the market. Additionally, mitigating actions are included in the Business Continuity Plan.

Reputational risk due to suppliers' non-compliance with equal opportunity and diversity laws

If suppliers fail to comply with principles of diversity and equal opportunity-particularly in relation to wages, career advancement, and other employment practices-the Company could suffer a potential loss of consumer confidence and a decrease in sales.

The Group implemented procedures for supplier selection based on Environmental, Social, and Governance criteria (ESG), assessing their environmental, ethical and social performance, and compliance with health, safety, and human rights regulations. Suppliers are evaluated through audits, document analysis, and questionnaires based on their risk level.

The Group adopted a Supplier Code of Conduct, which must be signed when entering into commercial contracts,

and a monitoring system to ensure compliance with requirements. This system consists of four phases: 1) Annual risk assessment, by establishing three different risk matrices (chemical, packaging and service suppliers) to assign a criticality index to each supplier. 2) Planning and implementation of monitoring audits 3) Distribution of questionnaires to update requirements and data, monitoring ESG criteria. 4) Performance evaluation.

Reputational and legal risk for violating workers' human rights along the value chain

The Group faces reputational risk from potential human rights violations by suppliers within its value chains. If suppliers fail to protect the health and safety of their workers and fundamental human and labour rights, they could face increased legal claims and sanctions for regulatory non-compliance. Such incidents may disrupt supplier and Fine Foods operations, potentially forcing the Group to terminate relationships with non-compliant suppliers, with consequent operations slowdowns.

The Group implemented procedures for supplier selection based on Environmental, Social, and Governance criteria (ESG), assessing their environmental, ethical and social performance, and compliance with health, safety, and human rights regulations. Suppliers are evaluated through audits, document analysis, and questionnaires based on their risk level.

The Group adopted a Supplier Code of Conduct, which must be signed when entering into commercial contracts,

and a monitoring system to ensure compliance with requirements. This system consists of four phases: 1) Annual risk assessment, by establishing three different risk matrices (chemical, packaging and service suppliers) to assign a criticality index to each supplier. 2) Planning and implementation of monitoring audits 3) Distribution of questionnaires to update requirements and data, monitoring ESG criteria. 4) Performance evaluation.

Financial and reputational risk for violating employee safety conditions along the value chain

Violating safety conditions for workers along the value chain is a significant risk for the Group. If suppliers or subcontractors fail to implement appropriate safety measures, it can result in work accidents, operational disruptions, and legal sanctions for these entities. These events can lead to delays in delivery and increased procurement and project management costs for the Group. They may harm the Company's reputation and reduce stakeholder confidence, ultimately causing financial losses.

The Group implemented procedures for supplier selection based on Environmental, Social, and Governance criteria (ESG), assessing their environmental, ethical and social performance, and compliance with health, safety, and human rights regulations. Suppliers are evaluated through audits, document analysis, and questionnaires based on their risk level.

The Group adopted a Supplier Code of Conduct, which must be signed when entering into commercial contracts,

and a monitoring system to ensure compliance with requirements. This system consists of four phases: 1) Annual risk assessment, by establishing three different risk matrices (chemical, packaging and service suppliers) to assign a criticality index to each supplier. 2) Planning and implementation of monitoring audits 3) Distribution of questionnaires to update requirements and data, monitoring ESG criteria. 4) Performance evaluation.

Legal and reputational risks related to damage to user health and safety due to unsafe products

The Group faces significant risks related to user health and safety due to unsafe products. Distributing products that fail to meet safety standards could cause physical harm or damage to user health, exposing the Group to potential lawsuits, product recalls, and regulatory penalties. Such incidents can lead to substantial costs for compensation and legal fees, and operational disruptions. Negative public and stakeholder perceptions may severely harm the Company's reputation, diminishing customer and investor confidence, and negatively impacting the Group's revenues and market position.

The Group has a reliable quality system and several certifications which guarantee compliance with good manufacturing practices. All finished products and raw materials undergo thorough analysis to ensure they meet release specifications.

‌Key non-financial indicators

We provide the following company business non-financial indicators for a better understanding of the Company situation, operating trend and result:

• The Group maintains consolidated and continuous relationships with more than 130 customers;

• The Group can count on 144 production lines located in the various plants;

• The Group produces approximately 2,090 Stock-Keeping Units (SKUs);

• The Group employs approximately 779 people.

  ‌Environmental information

  
  
  

  The environmental objectives and policies, including the measures adopted and the improvements made to the business activity that had the greatest impact on the environment, can be summarised as follows:

  In June 2024, the Parent Company underwent an audit for certification renewal under the UNI EN ISO 14001:2015 standard, which certifies the presence of a management system to prevent waste management, air and water environmental issues. The next maintenance visit is planned for June 2025.

  A management system illustrates how to intervene if harmful events occur.

  During the year, there were no events that caused damage to the environment for which the Group companies were found guilty, nor were sanctions or penalties imposed for environmental crimes or damages.

  To protect the environment, Group companies give all the types of waste that are generated by the Zingonia - Verdellino, Brembate and Trenzano sites to authorised third parties, which follow the provisions of current legislation.

  ‌Work Risk Assessment Document

  
  
  

  Under Legislative Decree no. 81 of 09/04/2008 and Legislative Decree no. 106/09 and subsequent amendments, which contain reference standards for workplace health and safety, the Parent Company has drawn up the Risk Assessment Document (DVR -Documento di Valutazione dei Rischi) filed at its registered office and revised on 06 December 2023, version no. 19. The twentieth version of the document is ready and will be issued at the next Periodic Meeting.

  The Risk Assessment Document for the subsidiary Euro Cosmetic (Trenzano site) is filed at the company's registered office and was revised in February 2024 in its fourth version.

  In June 2024, the Parent Company underwent the annual audit for the ISO 45001:2018 certification renewal, the international standard for an occupational health and safety management system (as of 21 May 2014, Fine Foods was certified under OHSAS 18001, the reference standard before ISO 45001).

  During H1 2024, Fine Foods reported no accidents that led to absences exceeding 40 days at initial prognosis or involved serious injuries to registered employees, for which company liability was established.

  During 2024, four occupational disease claims were filed, three of which were made by a former employee, who has not been with the Company for three years.

  The four complaints were not recognised by INAIL and, as a result, the Parent Company was not found liable.

  During 2024, there were no serious accidents at work that resulted in serious injuries to Euro Cosmetic's personnel enrolled in the employee register for which company liability was established. No occupational disease claims were filed.

  During 2024, Fine Foods' Supervisory Body did not find any anomalies concerning implementing the current Organisation, Management and Control System under Legislative Decree no. 231/2001. They based their findings on the evidence of the assigned activities performance and deemed the control system correct and generally supplemented by a constant procedure updating process. This applied even during the Covid emergency.

  ‌Personnel Management Information

  
  
  

  To better understand the Group situation and management performance, some information relating to personnel management is provided.

  Attention was paid to personnel's professional growth. 2024, 5322 training courses and seminars were held, for all levels, making 29,434 hours of training. These aimed at increasing technical skills and maintaining an adequate level of quality, safety, hygiene and environment skills.

  Plant	Number of courses	Total hours
  ZINGONIA	1,412	11,998
  BREMBATE	3,910	15,626
  Euro Cosmetic (Trenzano)	80	1,810
  TOTAL	5,322	29,434

  During the year there were no serious accidents at work that resulted in serious injuries to personnel enrolled in the employee register for which corporate responsibility was ascertained or charges relating to occupational illnesses on employees or former employees. During the year, the Company promptly implemented all the protections legally prescribed. It reserved an unconditional commitment

  to worker safety issues, whether or not the staff were employed, and the population surrounding its sites. The Company based its

  strategy on:

  • dissemination of a safety culture within the organisation;

  • specific dedicated operating procedures and adequate management systems;

  • prevention and protection from exposure to contagious and non-contagious risks;

  • the minimisation of risk exposure in each production activity;

  • surveillance and monitoring of prevention and protection activities.

    This process involved the following phases:

  • identifying exposure to possible hazards related to the methods, products, and operations carried out;

  • risk assessment of the event severity and frequency;

  • identifying prevention actions, where possible, and mitigating residual risk;

  • investigation and analysis of incidents to learn lessons and increase prevention capacity;

  • developing risk minimisation plans based on technological investments, implementing safety management systems, and staff training and education.

The Group defines essential intangible resources as non-physical assets that are fundamental to its business model and serve as value creation drivers:

1. Intellectual capital, encompassing implicit knowledge, systems, procedures, and protocols within the organisation, and value generated through innovations and processes;

2. Human capital, relating to employees' skills, capabilities, and experience;

3. Social and relational capital, primarily referring to relationships with customers, suppliers, and stakeholders.

For details on assets recognised in the financial statements, please refer to the relevant notes in the Consolidated and Separate Financial Statements.

‌Research and development

Fine Foods is active in the development and contract manufacturing of oral and solid forms for the nutraceutical, pharmaceutical and cosmetics industries.

Research and development come from a structured cooperation with customers aimed at providing them with new formulations for their products, ensuring their effectiveness, quality and innovation.

The costs incurred for product research and development are not capitalised but are included in operating costs and charged to the income statement.

‌Relationships with subsidiary, associated, parent companies and companies controlled by the parent companies

During 2024, the Parent Company distributed a dividend of € 0.12 per share to the holding company Eigenfin S.r.l. as per the

shareholders' resolution approving the 2023 Financial Statements.

‌Related Party Relationships

On 30 March 2022, the Parent Company's Board of Directors updated the Procedure for related party transactions, under Article 2391-bis of the Italian Civil Code and Article 4 of the "Regulations for transactions with related parties" issued by Consob with Resolution no. 17221 of 12 March 2010. Considering the new Fine Foods Group corporate structure after the acquisition of the Euro Cosmetic

S.p.A. shareholding, it was appropriate to draft an amendment to the definition of "Transactions of Negligible Amount" and further formal amendments were made for a better understanding of the Procedure. This procedure is available on the Company's website (https://www.finefoods.it/).

During 2024, transactions between the Company and related parties identified under the provisions of international accounting standard IAS 24 included the remuneration of Directors, established under applicable regulations, based on assessments of mutual interest and economic benefit.

‌Treasury shares buyback programme

On 29 May 2024, the Parent Company's Board of Directors resolved to launch the treasury share buyback programme to implement and comply with the authorisation to buyback and dispose of treasury shares approved by the 29 May 2024 Shareholders' Meeting.