The BoD of KME Group SpA has approved the draft financial stamements for the year 2024

KME Group SpA

Registered office: 20121 Milan (MI) - Foro Buonaparte 44

Share Capital Euro 200,154,177.66 (fully paid up)

Tax Code and Milan Companies Register no. 00931330583

www.itkgroup.it

PRESS RELEASE

• THE DRAFT FINANCIAL STATEMENTS AND THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 HAVE BEEN APPROVED.
• CONSOLIDATED RESULTS:
• • REVENUES DOWN BY 17% (EURO 1,565.4 MILLION, A DECREASE OF EURO 315.1 MILLION COMPARED TO 2023) DUE TO A REDUCTION IN VOLUMES OF 24.5%.
  • DESPITE THE DECREASE IN VOLUMES, EBITDA AMOUNTED TO EURO 99.7 MILLION (DOWN BY EURO 34.8 MILLION), CONFIRMING THE VALIDITY OF THE COMMERCIAL STRATEGY IN PLACE SINCE LAST YEAR.
  • POSITIVE EBIT OF EURO 54.0 MILLION (POSITIVE FOR A TOTAL OF EURO 79.3 MILLION
    IN 2023).
  • THE NET LOSS BEFORE IFRS IMPACT AND WRITE-DOWNS CAME TO EURO 30.6 MILLION: ENTIRELY ATTRIBUTABLE TO THE FINANCIAL EXPENSE OF THE PARENT COMPANY AS THE RESULT OF INDUSTRIAL ACTIVITIES AT BREAKEVEN DESPITE THE HIGH REDUCTION IN VOLUMES (THE IFRS NET LOSS WAS EURO 70.9 MILLION DUE TO THE EFFECT OF THE IFRS MEASUREMENTS OF INVENTORIES AND EQUITY ACCOUNTED INVESTMENTS).
  • CONSOLIDATED EQUITY OF EURO 270.3 MILLION (EURO 358.8 MILLION AS AT 31 DECEMBER 2023) AND A RECLASSIFIED NET FINANCIAL POSITION OF EURO 260.5 MILLION (IN LINE WITH THE PREVIOUS YEAR).
  • AGREEMENT REACHED WITH LYNSTONE SSF HOLDINGS II SÀRL FOR THE EXTENSION UNTIL DECEMBER 2027 OF THE MATURITY OF THE BOND OF THE SUBSIDIARY KMH FOR EURO 110.8 MILLION.
• PROPOSAL FOR THE APPROVAL OF THE SHAREHOLDERS TO COVER THE LOSS FOR THE YEAR BY USING THE EXTRAORDINARY RESERVE IN THE SAME AMOUNT.
• MANDATE TO THE CHAIRWOMAN AND DEPUTY CHAIRMAN TO CALL THE SHAREHOLDERS' MEETING IN ORDINARY SESSION, FOR 15 AND 16 MAY 2025.
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Milan, 14 April 2025 - The Board of Directors of KME Group SpA today approved the parent company's draft financial statements as at 31 December 2024, the consolidated financial statements and the Report on corporate governance and ownership structure prepared pursuant to Article 123-bis of Italy's Consolidated Law on Finance (TUF, Testo Unico sulla Finanza) and the Report on the Remuneration policy and fees paid pursuant to Article 123-ter of the TUF.

In compliance with the provisions of Italian Legislative Decree No. 125/2024, the Board of Directors also examined and approved the Consolidated Sustainability Report contained in the Directors' Report.

The Annual Financial Report as at 31 December 2024, inclusive of the above-mentioned reports as well as the reports of the Independent Auditors and the Board of Statutory Auditors, will be made public within legal terms and will be available at the registered office as well as on the website www.itkgroup.it, and the authorised storage system "eMarket STORAGE" (www.emarketstorage.it).

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Group performance

The reduction in demand in the reference sectors continued during 2024, whose first signs of deceleration had been detected starting from the fourth quarter of 2022 and which had progressively increased in the first few months of the second half of 2023.

This reduction clearly had an impact on the economic results of KME Group SpA ("KME" or the "Company") and its subsidiaries (the "KME Group" or the "Group").

The Group managed to reduce the negative effects of this economic trend thanks to the strategic actions taken in the past to bolster its market positioning.

In line with the Group strategy, management focused on new acquisitions that were also instrumental in recovering sales volumes. This led to the acquisition of Sundwiger Messingwerk GmbH (European leader in the semi-finished rolled bronze products sector as well as manufacturer of semi-finished rolled brass products), finalised in January 2025, and that of 75.76% of the share capital of Azienda Metalli Laminati SpA of which the Group already held 24.24%, finalised in July 2024.

The Group has also launched a careful cost containment and rationalisation policy, including by means of restructuring actions.

The operating results were penalised by market performance. Revenues net of raw material costs amounted to Euro 523.7 million, compared to Euro 608.1 million in the previous year, a decrease of 13.9%. Despite the significant reduction in sales, thanks to the profitability achieved, the EBITDA level was equal to Euro 99.7 million compared to Euro 134.5 million in the previous year, a drop of 26%.

The net loss before write-downs and IFRS impact was Euro 30.6 million. This result was affected by the Parent Company's financial expense, while industrial activities broke even. The aforementioned break- even result, despite a 24.5% reduction in quantities sold, confirms the validity of the commercial strategy in place since last year.

From a financial standpoint, there was also a move to increase the average maturity of the Group's debt. During 2024, through two public exchange offers and two public subscription offers, the new "KME Group SpA 2024-2029" bond, with a rate of 5.75%, was placed for a total of Euro 138.8 million; this replaced the previous one maturing in February 2025. The repayment dates of the bond issued by the subsidiary KMH SpA have also been rescheduled: the repayment deadline has been moved from 31 December 2025 to 31 December 2027, and in 2025 an instalment of Euro 15.0 million is expected to mature in September.

As at 31 December 2024, the Group had a Reclassified Consolidated Financial Position of Euro 260.5 million, in line with the previous year. This figure does not consider financial liabilities pursuant to IFRS 16, including those deriving from sale and leaseback transactions, and financial instruments measured at fair value.

Due to the economic trend and the acquisitions carried out, it was considered preferable to postpone the completion of the delisting process started in 2023, therefore postponing the procedure relating to the reverse merger of KME Group SpA into the unlisted subsidiary KMH SpA, which would have absorbed financial resources due to the exercise of the right of withdrawal.

Considering the persistence of the climate of uncertainty with regard to the economic trend, a further lengthening of the timescales of the merger, already deferred to the second half year of 2025, is expected.

The delisting is considered by the Company as functional to the objective of concentrating its activities in the industrial management of the KME SE Group and to offering the Company greater flexibility in the pursuit of strategies aimed at strengthening its market position, also through external growth, taking into account that the market listing does not adequately reflect the value of the KME Group.

Indeed, in recent years the Company's activities focused on managing the shareholding in KME SE and its subsidiaries, through several acquisitions and disposal operations that have created a new strategic configuration of the copper sector, focused mainly on the rolled copper segment ("Copper").

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Despite the drop in quantities sold (-24.5% compared to 2023), KME SE managed to keep the value of revenues per ton in line.

As part of its commercial transformation projects, KME SE carried out the following activities during

2024:

• continuous monitoring and fine-tuning of commercial actions and initiatives introduced in this period;
• continuous analysis of the cost elements in certain locations and their impact on sales prices;
• constant focus on achieving the unit value-added and EBITDA targets at Group level, for the entire group of products and customers;
• proactive approach to initiating negotiations with customers with the aim of guaranteeing profitable volumes for 2025;
• commercial integration of Azienda Metalli Laminati SpA (AML) acquired in July 2024.

In addition to the commercial actions mentioned above, cost optimisation projects were also enhanced at all Group plants. As part of these initiatives, the plan to end production at the Stolberg plant was announced in February 2025, to further optimise the Group's production footprint.

The main results of KME SE for the year 2024, compared to the previous year, can be summarised as follows:

Key results of the copper sector

Consolidated revenues in the year 2024 amounted to a total of Euro 1,540.8 million, a decrease of

17.1% compared to 2023 (Euro 1,858.0 million).

Net of the value of raw materials, revenues fell from Euro 585.6 million to Euro 499.0 million (-14.8%).

Gross operating income (EBITDA) amounted to Euro 97.8 million, down by 27.8% compared to the

2023 figures (Euro 135.5 million).

Net operating income (EBIT) stood at Euro 54.3 million (Euro 86.9 million in 2023).

The Loss before non-recurringitems came to Euro 0.3 million (profit of Euro 34.5 million in 2023).

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The result for 2024 was positively affected by non-recurring income of Euro 8.4 million (costs of Euro

26.6 million in 2023). At the end of December 2024, as a result of the early waiver of the possible exercise of the buyback option included in the Osnabrück Sale and Lease Back contract, the Group recorded income of Euro 32.8 million. By contrast, the result for 2023 was penalised by non-recurring expenses relating to: restructuring projects (Euro 10.9 million), M&A transactions (Euro 7.9 million) - mainly linked to consulting costs, and the write-down of a number of working capital assets for Euro 3.4 million - and, finally, expenses of Euro 2.4 million deriving from the additional expenses necessary for the management of the supply of material following the shutdown of a plant, following the fatal accident on 24 May 2024 at the Fornaci di Barga plant.

The Profit net of current tax payables before the IFRS measurement of inventories, deferred taxes and equity accounted investments came to Euro 0.4 million (loss of Euro 0.4 million in 2023).

The Net consolidated loss amounted to Euro 40.9 million (loss of Euro 21.6 million in 2023).

The measurement of inventories and forward contracts net of taxes had a negative impact of Euro 25.2 million, compared to a negative impact of Euro 7.6 million recorded in 2023.

The Group Comprehensive Consolidated Loss was Euro 42.7 million (loss of Euro 26.1 million in

2023).

The Reclassified Net Financial Position as at 31 December 2024, excluding lease liabilities based on IFRS 16, the fair value measurement of financial instruments and the IFRS financial liability originating from the sale & leaseback transaction, carried out in December 2022 with reference to the Osnabrück properties, was positive for Euro 70.9 million compared to a positive Euro 35.2 million at the end of December 2023. The AML consolidation had a negative impact of Euro 22.2 million, of which Euro 7.5 million related to the purchase price of the investment.

Net Financial Debt shows a credit balance of approximately Euro 27.2 million compared to a negative balance of Euro 72.7 million as at 31 December 2023.

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(ii) CULTI Milano S.p.A.

Despite a complex reference framework, the year ended 31 December 2024 was positive for the CULTI Milano group both in terms of growth in core turnover and in terms of excellent profitability.

Of particular importance, in December 2024, was the sale by CULTI of a part of its investment in the subsidiary BAKEL SpA (hereinafter also "Bakel") - in the meantime transformed from an Srl (Italian limited liability concern) into an SpA (Italian joint-stock company) - for a number of shares equal to 25.11% of its capital, essentially at the carrying amounts of the parent company CULTI and therefore for a total of Euro 1.26 million (the "Sale"). At the same time, Bakel launched the EGM market listing project, which is expected to be finalised in the first half of 2025 and the results of which may also benefit CULTI in relation to the investment sold. The Sale was carried out in two tranches, the first for a holding equal to 0.21% of the share capital of Bakel, with immediate payment of the consideration, and the second for a holding equal to 24.90% of the share capital of Bakel, with payment of the consideration by June 2028. The agreement envisages that the price of the second holding will increase to take into account the IPO value, as soon as it is known. Following the Sale, CULTI holds 24.90% of the share capital of Bakel, with 10.59% of the voting rights.

Following the loss of the majority holding in Bakel, the CULTI Milano group is made up, in addition to the parent company, of CULTI Asia Ltd and SCENT Company Srl.

The following are the main indicators of the CULTI Milano group (the income statement balances of the Bakel group, which is no longer part of the Group as at 31 December 2024, are not included):

• total sales: Euro 20.8 million (Euro 19.1 million in 2023), recording growth of 8.9%;
• sales achieved on the domestic market: Euro 5.7 million (Euro 5.2 million in 2023), registering an increase of 10%;
• sales achieved on international markets (equal to 72% of total turnover): these reached Euro 15.1 million (Euro 13.9 million in 2023), recording an increase of 8%;

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• EBITDA of Euro 4.7 million (Euro 4.2 million in 2023), registering an increase of 11.9%;
• EBIT of Euro 4.2 million (Euro 3.7 million in 2023), up due to the rise in sales;
• consolidated net profit: Euro 4.0 million (Euro 1.6 million in 2023);
• net financial position: positive for Euro 0.2 million (negative for Euro 3.2 million as at 31 December 2023), improving mainly as a result of the deconsolidation of Bakel - which, as at 31 December 2023, had a negative net financial position for Euro 2.7 million - in addition to the increased gross operating margin of the CULTI Milano group.
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(iii) Extension to December 2027 of the final maturity of the Euro 110.8 million KMH Bond

An agreement was entered into with the bondholder Lynstone SSF Holdings II Sàrl for the extension of the final maturity of the KMH SpA Bond ("KMH SpA Up to Euro 135,100,000.00 Senior Guaranteed and Secured Fixed Rate Notes due 31 December 2025") amounting to Euro 110.8 million and which, as at 31 December 2024, envisaged maturities of Euro 73.9 million as at 28 February 2025 and Euro 36.9 million as at 31 December 2025. By virtue of this agreement, the final maturity date of the bond was deferred until 31 December 2027, envisaging repayments of Euro 15.0 million in September 2025 and March 2026, Euro

45.0 million in March 2027 and a final instalment of Euro 35.8 million. There were no changes in the interest rate which, as from 1 March 2025, is equal to 15%. With the signing of the amending agreements - which involved the payment of a fee of Euro 1.7 million - the financial terms envisaged by the contract were also revised.

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Group results

The consolidated results as at 31 December 2024 are fully comparable with those of the last financial year, including both the income and cash flow statements of the consolidated companies for all twelve months. Therefore, we were able to overcome the limited comparability affecting the Group's financial statements following the launch of the new strategic approach announced by the Company on 22 April 2022, which had rendered the IFRS 10 consolidation exception for investment entities no longer applicable, with the subsequent obligation of line-by-line consolidation of controlling interests to be adopted prospectively from the date on which the change of status occurred.

The consolidated net invested capital can be analysed as follows:

Consolidated net invested capital

As at 31 December 2024, the Group had a Reclassified Consolidated Financial Position of Euro 260.5 million, compared to Euro 258.2 million as at 31 December 2023. This figure does not consider financial liabilities pursuant to IFRS 16, including those deriving from sale and leaseback transactions, and financial instruments measured at fair value.

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The reconciliation between the Reclassified Consolidated Financial Position and Consolidated Net Financial Debt is provided below:

Reconciliation of Reclassified Net Financial Position

The net financial debt (determined in compliance with the provisions of ESMA Document 32-382-1138 of 4 March 2021 − Guidelines regarding disclosure obligations pursuant to the prospectus regulation, as highlighted in CONSOB warning notice 5/21 of 29 April 2021) of the Group as at 31 December 2024 compared to 31 December 2023 can be summarised as follows:

It should be noted that the "Current portion of non-current financial debt", equal to Euro 213 million, includes a total of Euro 166.7 million represented:

• for Euro 54.8 million, by the principal amount and the accruing coupons of the KME Group 2020-2025 Bond, which was repaid on maturity (18 February 2025);
• for Euro 111.9 million, by the principal amount and the accruing coupons of the Bond issued by the subsidiary KMH, whose final maturity was subsequently postponed from 31 December 2025 to 31 December 2027, as mentioned above.
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KME Group SpA financial highlights

KME Group SpA's financial highlights as at 31 December 2024, compared to 31 December 2023, can be summarised as follows:

Condensed separate statement of financial position

• Investments are expressed net of any outstanding Company's financial receivables/payables.
  (*) Including accruing interest.
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Investments

The net investments held by the Company amounted to Euro 572.2 million as at 31 December 2024 (Euro 591.1 million at the end of 2023), of which more than approximately 94% concentrated in KME SE.

Equity

The holding company's equity amounted to Euro 259.3 million, compared to Euro 297.6 million as at 31 December 2023; the most significant change is related to the result for the year and the effects of the share and warrant purchase transactions.

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Debt

The Parent Company's financial debt as at 31 December 2024, compared to 31 December 2023, can be broken down as follows:

Financial debt

The reclassified income statement, in a format including sub-totals, shows the formation of net profit (loss) for the year by indicating the figures commonly used to provide a summary representation of business results.

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Business outlook

The business outlook will be correlated to the demand trend in KME SE's reference sectors and therefore will also relate to the wider macro-economic dynamics.

There also remains a possibility for the Parent Company and the Group as a whole to benefit from the development of other equity investments or non-core activities in the copper sector, through disposal. If realised, these disposals could have a positive impact on the Group's debt.

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Notice of Shareholders' Meeting

The Board of Directors has delegated the Chairperson and the Deputy Chairperson, severally, to call the ordinary Shareholders' Meeting of the Company for 15 May 2025 in first call and for 16 May 2025 in second call, to resolve on the 2024 financial statements and the proposal for the allocation of the profit (loss) for the year, as well as on the report on remuneration pursuant to Article 123-ter of the Consolidated Law on Finance (TUF), the appointment of a Director and the authorisation for the purchase of treasury shares.

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Verification of independence requirements of Non-executive directors and the Board of Statutory Auditors

In compliance with the provisions of the new Corporate Governance Code in force as of 1 January 2021, the Board of Directors evaluated, in application of the principles and recommendations set forth in article 2 of the Code, the independence of the non-executive directors and members of the control body, confirming the fulfilment of the independence requirements by the directors Francesca Marchetti, Luca Ricciardi and Massimiliano Picardi and all members of the Board of Statutory Auditors.

The assessment was based on the information received from the Directors and Statutory Auditors in accordance with Article 148, paragraph 3 of Italian Legislative Decree 58/98 and the criteria provided in Article 2, recommendations 7 and 9 of the Corporate Governance Code.

The Company did not use parameters nor quantitative and/or qualitative criteria other than the above.

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The Manager in charge of Financial Reporting, Giuseppe Mazza, hereby declares that, pursuant to Article 154-bis, paragraph 2 of the Consolidated Law on Finance (TUF, Italian Legislative Decree no. 58/1998), the accounting information contained in this press release corresponds to the company's documents, books, and accounting records.

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The press release is available on the website www.itkgroup.it, where it is possible to request information directly from the Company (phone: +39 02-806291; email: info@itk.it) and on the "eMarket STORAGE" system at www.emarketstorage.it.

Annexes:

1. KME Group SpA Statement of financial position;
2. KME Group SpA Income statement and statement of comprehensive income;
3. KME Group SpA Statement of Cash Flows;
4. Consolidated Statement of financial position;
5. Consolidated income statement and statement of comprehensive income;
6. Consolidated Statement of Cash Flows.

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