The Board of Directors has approved the Draft Financial Statements and Consolidated Financial Statements for the Financial Year ending 31 December 2020

PRESS RELEASE

MARZOCCHI POMPE: THE BOARD OF DIRECTORS HAS APPROVED

THE DRAFT FINANCIAL STATEMENTS AND CONSOLIDATED FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDING 31 DECEMBER 2020 CONSOLIDATED DATA:

• SALES REVENUE: €34.1 million (€39.2 million1: at 31 December 2019), -12.8% H2 €18.5 million vs H1 €15.6 million, +19.1%
• EBITDA: €4.1 million (€5.4 million1 at 31 December 2019), -25.6% H2 €2.9 million vs H1 €1.2 million, +127.6%
• EBITDA Margin: 12.2% (14.4%1 in 2019)
  H2 16.1% vs H1 7.9%
• NET PROFIT: €0.23 million (€0.20 million at 31 December 2019)
  H2 €1.2 million vs H1 €-0.9 million
• NET FINANCIAL DEBT: €9.3 million (€12.5 million at 31 December 2019, -26.2%)
• STRONG GROWTH IN AUTOMOTIVE BUSINESS IN H2: +56% compared to H1 2020 and +39.7% compared to H2 2019 (pre-Covid)
• NEW CHINA JOINT-VENTURE: "Marzocchi Symbridge Hydraulic (Shangai) Co. Ltd", with the aim of increasing commercial penetration especially of core business products

FORECAST FOR THE PERIOD 2021 - 2023:

• Significant development of turnover with a CAGR of 6-8% by 2023, resulting from organic growth, in line with the strategic guidelines stated in the IPO
• Return to excellent levels of profitability, with an EBITDA margin of around 17-18%
• Achievement of an optimal level of financial leverage (Total Debt/EBITDA 1-1.5x) and maintenance of a debt ratio below 50% of Shareholders' Equity
• Confirmation of the dividend policy already adopted in 2019.

PROPOSAL TO THE SHAREHOLDERS' MEETING TO AUTHORISE THE BOARD TO PURCHASE AND SELL TREASURY SHARES

• 2019 net of the extraordinary "take-or-pay" contribution of €0.8 million, invoiced for the clause relating to the failure to reach the minimum quantities foreseen in the contract with the main automotive customer; this contribution in 2020 would have been €0.6 million, but was not charged due to the national lockdowns, which constituted a force majeure event.

MARZOCCHI POMPE S.P.A.- Direzione e Coordinamento di ABBEY ROAD S.R.L.

Via 63^ Brigata Bolero, 15 - 40033 Casalecchio di Reno (Bo) Italy - Tel (+39) 051/6137511 Fax (+39) 051/592083

Nr. M. Bo 047739 - N.REA 422251 - Registro Imprese /Cod. Fisc. 03285900969 - P.IVA IT 03285900969 - C.S. € 6.538.750,00 i.v. e-mail: info@marzocchipompe.com - Web: www.marzocchipompe.com

Bologna, 30 March 2020 - The Board of Directors of Marzocchi Pompe S.p.A. (AIM:MARP), a leading company in the design, production and marketing of high performance gear pumps and motors, met today under the chairmanship of Paolo Marzocchi and approved the draft financial statements and the draft consolidated financial statements as at 31 December 2020.

Gabriele Bonfiglioli, CEO of Marzocchi Pompe commented: "Thinking about how difficult it was to operate in a year in which the whole industry was heavily affected by the negative effects of the pandemic, we are very proud of the commercial and financial results achieved in 2020.

The second half of the year has given us some very important signals: first of all, we note that revenues, which are growing strongly, have brought the Company back to pre-Covid levels and then that the EBITDA margin for the period is close to our all-time highs.

We should also highlight the significant reduction in net debt, which fell to €9.3 million, down 26% compared to 2019, once again demonstrating the proven equity and financial strength of the Group, as well as its great ability to generate significant positive cash flows, even in a particularly difficult year like 2020.

All this shows how Marzocchi Pompe, in an extraordinarily negative global scenario, has been able to maintain its leadership position on the market, also taking an important step forward with the setup of the JV "Marzocchi Symbridge Hydraulic (Shangai) Co. Ltd".

The very challenging scenario has also led us to accelerate our ongoing operational improvement programs, with tangible results in terms of efficiency gains. This allows us to consolidate our strong belief that we will emerge stronger from this historic phase.

Finally, I would like to thank all our employees, who have shown great dedication to the company throughout this difficult period, and who have multiplied their efforts both during the contraction in the first half of the year and during the recovery in the second. We can truly say that the team spirit is one of the peculiar and winning features of Marzocchi Pompe, which makes us look at the future with even more optimism".

MAIN CONSOLIDATED FINANCIAL RESULTS AS AT 31 DECEMBER 2020

The economic results of the 2020 financial year were hit by the effects of the Covid-19 pandemic, which in terms of production revenues generated a 10.3% decrease compared to the previous year, in response to which the Group implemented adequate measures to contain costs, which in Italy took the form of the use of social shock absorbers represented by the "CIG Covid", used for 33,644 hours largely concentrated in March and April 2020, while in the United States it took the form of recognition of incentives.

No recourse was made to any of the extraordinary supporting measures provided for by the legislator to help companies in distress such as:

• suspension of the depreciation of assets (Article 60 of Law 126/2020);
• the revaluation of corporate assets and equity investments (Article 110 of Law 126/2020).

MARZOCCHI POMPE S.P.A.- Direzione e Coordinamento di ABBEY ROAD S.R.L.

Via 63^ Brigata Bolero, 15 - 40033 Casalecchio di Reno (Bo) Italy - Tel (+39) 051/6137511 Fax (+39) 051/592083

Nr. M. Bo 047739 - N.REA 422251 - Registro Imprese /Cod. Fisc. 03285900969 - P.IVA IT 03285900969 - C.S. € 6.538.750,00 i.v. e-mail: info@marzocchipompe.com - Web: www.marzocchipompe.com

No events or situations arose in 2020 such as to highlight the presence of non-recurring costs and revenues; however, due to the lockdowns that took place first in China, then in Europe and finally in the US, which in fact constituted a force majeure case, the contractual take-or-pay clause protecting the automotive turnover of the main customer could not be applied; the negative effects of this situation amounted to € 579,000, which the Group was unable to charge to the customer, as it did in the previous year; for this reason, it was necessary to normalise the results of the application of this clause in 2019 for a like-for-like comparison.

TABELLA DI SINTESI DEI PRINCIPALI DATI ECONOMICO-FINANZIARI CONSOLIDATI

• Net of the extraordinary "take-or-pay" contribution invoiced for the clause relating to the failure to reach the minimum quantities envisaged in the contract with the main automotive customer, amounting to €0.8 million in financial year 2019; net of non-recurring expenses and income: in financial year 2019, adjustment of the item other revenues by €106 thousand for charges to customers for contributions to product development.

Sales Revenue at 31 December 2020 amounted to €34.1 million, down 12.8% compared to the 2019 figure of €39.2 million (net of the extraordinary "take-or-pay" contribution of €0.8 million invoiced for the clause relating to the failure to reach the minimum quantities provided for in the contract with the main automotive customer). This contribution in 2020 would have been €0.6 million, but was not charged due to national lockdowns, which constituted a force majeure.

The results for the second half of 2020 saw strong revenue growth (+19.1% compared to the first half), repositioning the company at pre-Covid levels. In detail, second half revenues reached €18.5 million vs €15.6 million in the first half of the year.

MARZOCCHI POMPE S.P.A.- Direzione e Coordinamento di ABBEY ROAD S.R.L.

Via 63^ Brigata Bolero, 15 - 40033 Casalecchio di Reno (Bo) Italy - Tel (+39) 051/6137511 Fax (+39) 051/592083

Nr. M. Bo 047739 - N.REA 422251 - Registro Imprese /Cod. Fisc. 03285900969 - P.IVA IT 03285900969 - C.S. € 6.538.750,00 i.v. e-mail: info@marzocchipompe.com - Web: www.marzocchipompe.com

The breakdown of turnover by business line is shown in the table below:

In 2020, the Automotive business grew by 4.6% on the previous year thanks to a strong recovery in the second half of the year of +56% compared to the first half of 2020 and +39.7% compared to the second half of 2019 (pre-Covid). Revenues from the Core business also made a significant contribution, however, with second half 2020 at +6.4% compared to the first half.

The breakdown of revenues by geographic area is shown in the table below and highlights a geographical diversification that reflects the recovery of the American and, albeit less marked, Asian markets and the persistent difficulties in Europe.

The export share reached 77.5% in 2020, up from 75.1% in 2019.

EBITDA stood at €4.1 million compared to approximately €5.4 million at the end of 2019 (adjusted for the take or pay contribution of €0.8 million), corresponding to an EBITDA margin of 12.2% (vs. 14.4% at the end of fiscal year 2019).

In the second half of the year, EBITDA leapt to €2.9 million, from €1.2 million in the first half, recording a growth of +127.6%, with an EBITDA margin of 16.1% close to Marzocchi Pompe's all- time highs, and up sharply from 7.6% in the first half.

EBIT is negative for €1.1 million vs. a positive result of €0.06 million at the end of 2019, also showing a marked difference between the two half-years of the year with the first one in loss for €0.9 million

MARZOCCHI POMPE S.P.A.- Direzione e Coordinamento di ABBEY ROAD S.R.L.

Via 63^ Brigata Bolero, 15 - 40033 Casalecchio di Reno (Bo) Italy - Tel (+39) 051/6137511 Fax (+39) 051/592083

Nr. M. Bo 047739 - N.REA 422251 - Registro Imprese /Cod. Fisc. 03285900969 - P.IVA IT 03285900969 - C.S. € 6.538.750,00 i.v. e-mail: info@marzocchipompe.com - Web: www.marzocchipompe.com

and the second one for only €0.2 million. It should be noted that the Company did not make use of the option to suspend ordinary depreciation and amortisation for the year 2020.

Net Income for the year 2020 was €0.23 million, essentially in line with the previous year (€0.2 million at the end of 2019).

Net Fixed Assets at 31 December 2020 amounted to €22.4 million, vs €26.1 million at the end of 2019, due to new investments in tangible and intangible assets of €1.5 million and the recognition of €5.2 million in depreciation and amortisation and impairment of financial assets (€0.02 million).

Investments amounted to close to €1.6 million, corresponding to 5% of turnover: despite a particularly complex year such as 2020, the Group continued with its development plans.

Net Working Capital at December 31, 2020 amounted to €6.9 million, essentially unchanged from €6.8 million at the end of 2019, testifying to the great ability to control commercial and procurement management. Marzocchi was not affected by component shortages, nor did it suffer any lengthening of customer payment terms.

Equity at the end of 2020 amounted to €18.4 million, down slightly from €18.7 million at the end of 2019, due to the payment of the 2019 dividend (€392,325).

The strong sales recovery in in the second half of the year also had positive effects on the Net Financial Position, which fell to €9.3 million, down 17% compared to the first half of the year (€11.2 million) and 26.2% compared to 2019 (€12.5 million), demonstrating the Group's proven equity and financial solidity, as well as its great ability to generate cash flow even in a particularly challenging year such as 2020.

The Group leader Marzocchi Pompe S.p.A. closes the year to 31 December 2020 with a loss of € 51,000, down from € 242,257 at 31 December 2019, which the Board of Directors proposes to cover through the use of the extraordinary reserve.

***

MAIN SIGNIFICANT EVENTS DURING THE 2020 FINANCIAL YEAR

With reference to the COVID-19 pandemic, the Company did not have any significant impact

until 22 March, as both plants were working at full capacity until then, although they applied a series of prudent health safety behaviours aimed at preventing and containing the spread of the contagion, in line with government and regional regulations. After the issuance of the Prime Ministerial Decree that foresaw a considerable reduction in the country's production activities, Marzocchi Pompe stopped production for three weeks, since the products manufactured did not fall, if not in a very marginal way, among those of the Manufacturers' supply chains that could continue their activities. Even the foreign offices suffered significant limitations during that period, as they could only operate remotely for a long time.

MARZOCCHI POMPE S.P.A.- Direzione e Coordinamento di ABBEY ROAD S.R.L.

Via 63^ Brigata Bolero, 15 - 40033 Casalecchio di Reno (Bo) Italy - Tel (+39) 051/6137511 Fax (+39) 051/592083

Nr. M. Bo 047739 - N.REA 422251 - Registro Imprese /Cod. Fisc. 03285900969 - P.IVA IT 03285900969 - C.S. € 6.538.750,00 i.v. e-mail: info@marzocchipompe.com - Web: www.marzocchipompe.com

This is an excerpt of the original content. To continue reading it, access the original document here.