Index | Table of contents
1.
About this report
........................................................................................................................................................
3
2.
Key Highlights
.............................................................................................................................................................
4
3.
Corporate bodies
.......................................................................................................................................................
5
4.
Director’s Report
........................................................................................................................................................
7
4.1
Reference Background and Investor information
.............................................................................................
7
4.2
Significant business events in the year
.............................................................................................................
9
4.3
Subsequent events
..........................................................................................................................................
12
4.4
Brand|Product performance
...........................................................................................................................
13
4.5
New Products, Services, Research and Development
.....................................................................................
15
4.6
Manufacturing & Supply Chain operations
.....................................................................................................
18
4.7
Human Resources
............................................................................................................................................
19
4.8
Regulation
.......................................................................................................................................................
21
4.9
Group Financial Review
...................................................................................................................................
23
4.9.1
Net Revenue Performance
........................................................................................................................
23
4.9.2
Condensed income statement
....................................................................................................................
25
4.9.3
Condensed statement of financial position
................................................................................................
26
4.9.4
Net Operating Working Capital
..............................................................................................................
28
4.9.5
Reclassified statement of Cash flows
.........................................................................................................
29
4.9.6
Net financial indebtedness
.........................................................................................................................
30
4.9.7
Capital Expenditures
...................................................................................................................................
31
4.9.8
Company and Group net profit and net equity
..........................................................................................
31
4.10
Full year 2023 conclusion and outlook
............................................................................................................
32
4.11
Definition and reconciliation of the Alternative Performance Measures (APMs or non-GAAP measures) to
GAAP measures
............................................................................................................................................................
33
4.12
Investor information
........................................................................................................................................
37
5.
Governance
.........................................................................................................................................................
38
5.1
Risk management
..............................................................................................................................................
38
5.2
Non-Financial Disclosure
....................................................................................................................................
46
5.3
Corporate Governance
.......................................................................................................................................
94
5.4
Remuneration report
.......................................................................................................................................
113
6.
Ariston Holding N.V. Consolidated Report Financial Statements at 31 December 2023
...........................................
125
7.
Ariston Holding N.V. Company - only Financial Statements at 31 December 2023
..................................................
216
8.
Other Information
......................................................................................................................................................
241
Disclaimer
This document was not made available to the public with a signed version, which is retained at the Group corporate office.
The Board report “
bestuursverslag
” consists of sections 2, 3, 4 and 5.
1.
About this report
Note on presentation
The annual report at 31 December 2023 was prepared in accordance with the International Financial Reporting Standards
(IFRS), issued by the International Accounting Standards Board (IASB), as adopted by the European Union and with Section
2:362 (8) of the Dutch Civil Code (‘DCC’), pursuant to Part 9 of Book 2. The IFRS designation also includes the International
Accounting Standards (‘IAS’) as well as all the interpretations of the International Financial Reporting Interpretations
Committee (‘IFRIC’), formerly the Standard Interpretations Committee (‘SIC’).
Adaptation plan pursuant to Articles 15 and 18 of the Market Regulations
In accordance with Articles 15 and 18 of Consob Regulation 20249 of 28 December 2017 and subsequent amendments
concerning ‘conditions for listing shares of companies that control companies established and governed by laws of non-
EU countries’, the parent company Ariston Holding N.V. (the ‘Company’ or ‘Parent Company’ or ‘Ariston’ and together
with its subsidiaries ‘Ariston Group’ or the ‘Group’) has identified its significant subsidiaries as defined in Article 15 (2) of
the above-mentioned Regulation, and verified that the conditions set out in paragraphs b) and c) of Article 15 have been
met.
Information on the figures presented
All the figures in this annual report are expressed in millions of euro to one decimal place, whereas the original data is
recorded and consolidated by the Group in euro. Similarly, all percentages relating to changes between two periods or
to percentages of net revenue or other indicators are always calculated using the original data in euro. The use of amounts
expressed in millions of euro may therefore result in apparent discrepancies in both absolute amounts and data expressed
as a percentage.
The language of this annual report is English. Certain legislative references and technical terms have been cited in their
original language in order to give them their correct technical meaning under applicable law.
European Single Electronic Format requirements
Pursuant to article 4 of the Transparency Directive, starting from 2021 reporting period, the financial statements schema
in the annual financial report is prepared in XHTML format, in compliance with the European Single Electronic Format
(ESEF) as a company listed on a European Union regulated market. In addition, issuers preparing IFRS consolidated finan-
cial statements shall mark those up using Inline XBRL. Ariston Group manages ESEF by leveraging a dedicated outsourced
IT software that allows compliance with the regulation.
2. Key Highlights
2023
2022
Total Change
(€ Mln)
Net revenue
3,091.8
100.0%
2,378.8
100.0%
713.0
30.0%
EBITDA adjusted
1
422.2
13.7%
305.3
12.8%
116.9
38.3%
EBITDA
1
417.1
13.5%
283.5
11.9%
133.6
47.1%
EBIT adjusted
1
314.2
10.2%
222.6
9.4%
91.6
41.2%
EBIT
285.7
9.2%
193.7
8.1%
92.0
47.5%
PBT
253.6
8.2%
179.8
7.6%
73.8
41.0%
Group net profit adjusted
1
211.8
6.9%
162.9
6.8%
48.9
30.0%
Group net profit
191.2
6.2%
140.3
5.9%
50.9
36.3%
Profitability Ratios
2023
2022
Net capital employed (€
mln)
2,077.5
913.3
Earnings per shares – (Basic €)
0.52
0.43
Earnings per shares – (Diluted €)
0.51
0.42
Headcount
10,769
7,975
Free cash flow
2
111.6
31.7
Net financial indebtedness adjusted
1
(*)
575.0
-98.9
Net equity
1,502.5
1,012.2
* Negative figures represent net cash
1
refer to paragraph 4.11 for the reconciliation of the APM
2
refer to paragraph 4.11 for further information
3. Corporate bodies
Board of Directors
Paolo Merloni
Executive Chair
Maurizio Brusadelli
CEO
Antonia Di Bella
Roberto Guidetti
Laurent Jacquemin
Guido Krass
Francesco Merloni
Maria Francesca Merloni
Lorenzo Pozza
Ignazio Rocco di Torrepadula
Marinella Soldi
Enrico Vita
External auditor
Ernst & Young Accountants LLP
6
Driving our sustainable future
Paolo Merloni, Executive Chairman
Dear Shareholder,
2023 marked a turning point in the history of Ariston Group – a multinational group that today approaches its 95
th
anni-
versary as a leading player in the sustainable thermal comfort industry, with more than 10,000 people worldwide and
revenues exceeding 3 billion euros.
The year commenced with the completion of the acquisition of Wolf-Brink, which has been the biggest M&A in our history
and is now effectively evolving into a transformative partnership. We have been focusing on seamless integration, col-
laborating with new colleagues across various workstreams while harmonizing our heritages and diverse cultures, in line
with Ariston Group’s spirit. As we build on our shared system of values, we capitalize on differences to reshape our or-
ganizations into one and lay the groundwork of the future of our group. I take pride in noticing that synergies generated
to date already gave positive contribution to margins, and that Germany has driven our financial performance this year,
corroborating the strength of our vision.
In March we released our ESG manifesto “Road to 100”, defining clear-cut objectives in the fields of Solutions, Operations,
People & Community, Customers and Governance, and shaping our sustainability roadmap to 2030. As the energy tran-
sition in the building sector is critical to reach Europe’s decarbonization targets, we further invested in product innovation
to accelerate this transformation through our solutions and today with our unique, extensive portfolio of renewable and
high-efficiency technologies we cover all our customers’ needs for sustainable thermal comfort. Additionally, as a global
manufacturer, we concentrated on progressively decarbonizing our operations, also by expanding the Word Class Man-
ufacturing methodology, focusing on production capacity and efficiency for strategic categories, and implementing the
digital transformation across the entire value chain.
We then welcomed Maurizio Brusadelli as the new CEO of Ariston Group. He brought to the group his vision, as well as a
wealth of experience and competencies acquired over the course of his robust career. Extending my deepest gratitude
to Laurent Jacquemin for his 30+ years dedication, and as he assumed the role of a non-executive board member, I
acknowledge how the solidity of our governance guaranteed a smooth succession. The strong cohesion of our Executive
Team secured stability and maintained our strategic course. All our people – through their commitment, strategic focus,
passion, entrepreneurship, and integrity – were the true protagonists of a special year of shared success.
Leveraging on our vision Sustainable Comfort for Everyone, we put significant steps in the driving of our future. From
these standpoints, we look ahead remaining focused on our scale and profitability. Despite the challenges affecting some
of our key markets, in 2023 we achieved an unprecedented net turnover of 3.092 billion euros, which represents a 30%
year-over-year growth, factoring in the acquisitions of Wolf and Brink (+1% proforma). And we were able to protect
margins, increasing our adjusted EBITDA by 38% year-over-year (+9% proforma) and delivering once again a double-digit
adjusted EBIT. Our vision is for the long term: we will continue to pursue our profitable growth, elevating our organic
ambitions while exploring inorganic opportunities consistent with our development strategy, to stay true to the commit-
ment to our stakeholders.
I express my thanks to all individuals who have played a role in contributing to this collective journey.
Sincerely,
Paolo Merloni
4. Director’s Report
4.1
Reference Background and Investor information
Macroeconomic scenario
After reaching 3.5% in 2022, in the latest estimates released in October 2023, the International Monetary Fund (IMF)
projected global GDP growth at 3.0% in 2023 and 2.9% in 2024.
The IMF outlined that the global economy continues its slow recovery from the effects of the pandemic, the outbreak of
the conflict in Ukraine, and the cost-of-living crisis. Growth remains weak, nonetheless resilience has been higher than
expected. Despite disruptions in energy and food markets caused by the war, and tight monetary policies, the global
economy has slowed down, but not stopped completely.
Global production bottomed out at the end of 2023, while inflation is gradually being brought under control. However,
currently, a full recovery toward pre-pandemic levels appears very challenging, especially in emerging markets and de-
veloping economies.
In this context, Italy’s forecast is to move from 3.7% in 2022 to 0.7% in 2023 and 0.7% in 2024, Germany from 1.8% to a
negative -0.5% and then +0.9% respectively, and France from 2.5% to 1.0% and 1.3% respectively.
This growth slowdown will also affect Saudi Arabia, shifting from 8.7% in 2022 to 0.8% in 2023 and 4.0% in 2024, and the
United States, moving from 2.1% to 2.1% and 1.5% respectively. China is the only economy that is expected to record a
positive trend in 2023 compared to 2022.
Growth projections (GDP), annual percentage changes
Actual
Projections
2022
2023
2024
World Output
3.5%
3.0%
2.9%
Belgium
3.2%
1.0%
0.9%
China
3.0%
5.0%
4.2%
France
2.5%
1.0%
1.3%
Germany
1.8%
-
0.5%
0.9%
India
7.2%
6.3%
6.3%
Indonesia
5.3%
5.0%
5.0%
Italy
3.7%
0.7%
0.7%
Mexico
3.9%
3.2%
2.1%
Poland
5.1%
0.6%
2.3%
Romania
4.7%
2.2%
3.8%
Saudi Arabia
8.7%
0.8%
4.0%
South Africa
1.9%
0.9%
1.8%
Spain
5.8%
2.5%
1.7%
Switzerland
2.7%
0.9%
1.8%
United Arab Emirates
7.9%
3.4%
4.0%
United Kingdom
4.1%
0.5%
0.6%
United States
2.1%
2.1%
1.5%
Vietnam
8.0%
4.7%
5.8%
Source: IMF, World Economic Outlook, October 2023
8
Exchange rates
After the depreciating trend in 2022, during the last quarter of 2023 the Euro was subject to significant appreciation
against many of the main currencies relevant to the Ariston Group.
In comparison with the average exchange rates for the last quarter of 2022, only a few cases of depreciation were rec-
orded - against the Swiss Franc (-2.9%), Mexican Peso (-5.9%), and Pound Sterling (-0.3%). Against the other currencies,
the Euro registered an increase of between 5% and 7%.
As regards to the average for 2023, the trends registered in the last quarter are confirmed, apart from the Pound Sterling
against the Euro, which appreciated at 2%.
Euro exchange rates against major currencies
2023
2022
Δ
Avg. Q4
Avg. YTD
31.12.2023
Avg. Q4
Avg. YTD
31.12.2022
vs. Avg. Q4
vs. Avg. YTD
vs. 31.12
CHF
0.95
0.97
0.93
0.98
1.00
0.98
-2.9%
-3.3%
-6.0%
CNY
7.77
7.66
7.85
7.26
7.08
7.36
7.1%
8.2%
6.7%
GBP
0.87
0.87
0.87
0.87
0.85
0.89
-0.3%
2.0%
-2.0%
RON
4.97
4.95
4.98
4.92
4.93
4.95
1.0%
0.3%
0.5%
USD
1.08
1.08
1.11
1.02
1.05
1.07
5.4%
2.7%
3.6%
CAD
1.47
1.46
1.46
1.39
1.37
1.44
5.8%
6.6%
1.4%
VND
26,204
25,770
26,808
24,810
24,630
25,183
5.6%
4.6%
6.5%
INR
89.54
89.31
91.90
83.86
82.69
88.17
6.8%
8.0%
4.2%
MXN
18.89
19.18
18.72
20.08
21.19
20.86
-5.9%
-9.5%
-10.2%
Source: ECB
Raw materials
After strong inflationary trends in 2021 and equally strong declining trends in 2022, the most important raw materials for
the Ariston Group continued their price decrease over the whole of 2023, except for some small signs of an increase in
the last quarter (both end-of-period spot and average prices). More specifically, in the fourth quarter of 2023, polypro-
pylene, polyurethane and aluminium recorded the biggest decrease, with a quarter average of 10%, 9% and 6% respec-
tively, compared to the average price for the fourth quarter of the previous year.
Average monthly market prices of main raw materials (per ton)
2023
2022
Δ
31.12.2023
Avg. Q4
Avg. YTD
31.12.2022
Avg. Q4
Avg. YTD
vs. Last Day
vs. Avg. Q4
vs. Avg. YTD
Steel [€/ton]
696
653
714
669
657
898
4%
-1%
-20%
Polypropylene [€/ton]
1,470
1,477
1,494
1,648
1,648
1,946
-11%
-10%
-23%
Copper [USD/ton]
8,476
8,170
8,475
8,387
8,009
8,807
1%
2%
-4%
Polyurethane [€/ton]
2,206
2,181
2,428
2,391
2,406
2,600
-8%
-9%
-7%
Aluminium [USD/ton]
2,335
2,191
2,249
2,360
2,324
2,703
-1%
-6%
-17%
Note: For steel, the price of hot rolled steel for the European market was considered; for copper and aluminium the average daily "cash"
prices, and for polyurethane the mix of isocyanate and polyol based on the Group’s policies.
Source: Metal Bulletin, ICIS LOR, LME
4.2
Significant business events in the year
January
Following the fulfillment of all condition precedents, the Ariston Group completed the
acquisition of 100% of the share
capital of CENTROTEC Climate Systems
(now called Wolf-Brink) for €625.8 million in cash, plus 41,416,667 Ariston Holding
N.V. shares. The transaction, announced in September 2022, was the biggest deal in the Group’s history and contributed
to the increase in the Ariston Group’s ESG focus, reinforcing its portfolio of brands and its mid- to high-end offer of climate
solutions, and further consolidating its positioning in Europe, with Germany becoming its first market.
The global Ariston brand launched
One Team
in
Romania
, the reserved digital area that caters to Ariston Professional
Partners, offering informative contents and tools to attract, engage, support, and retain Installers, Planners and Service
Centres.
February
The Ariston Group participated in the annual convention promoted by the Politecnico di Milano
Internet of Things Obser-
vatory
, joining the conversation on
Smart Homes
, and deepening the impact that thermal comfort solutions with connec-
tivity features have on energy saving and emissions reduction.
The Ariston Group participated in
AHR Expo
2023, taking place in Atlanta (US), with a dedicated booth showcasing the
new heat-pump water heater for the North American market, together with its wider offer of heating and water heating
solutions.
March
As part of the Company Report 2022, Ariston Group released its
Sustainability Report 2022
, tracking the Group’s ESG
journey and reporting its annual ESG performance.
The Ariston Group presented its ESG vision and goals to 2030 – the year of its 100
th
Anniversary – in the
Road to 100
, a
strategic plan and manifesto of the Group’s commitment to sustainability, defining ambitious objectives in the fields of
Solutions, Operations, People & Communities, Customers, Governance, and identifying a roadmap of concrete supporting
initiatives.
The Ariston Group’s global brand Wolf, ventilation brand Brink, and components brand Thermowatt participated in
ISH
2023
, taking place in Frankfurt, to present respectively the latest innovations in heating and ventilation technology, and
electric components for heat pumps for heating.
Global brand Wolf presented the new
CHA-16/20
mono-block air-to-water heat pump, an extension of the CHA-07 and
CHA-10 product ranges, working with natural refrigerant R290. The additional power rating is specifically suitable for
installation in large, detached houses, apartment buildings, and the commercial sector.
April
Global brand Ariston hosted an event in Singapore to showcase the new
Andris
, a full range of Wi-fi electric storage water
heaters now equipped with voice control functions, and
Aures 2.0
, the new range of electric instant water heaters that
combine innovative technology with excellent design features.
In India, leading local water heating brand Racold launched the
Omnis
and
Altro
ranges, standing out for their innovative
technology, high efficiency, quality as well as particular design features.
May
When releasing FY23 Q1 results, the Ariston Group announced the
succession in its Chief Executive Officer position
, with
Laurent Jacquemin stepping down for personal reasons, effective 27 July 2023, and
Maurizio Brusadelli
identified as the
new CEO candidate, to be nominated by the Board at its 3 August 2023 meeting.
10
In recognition of its commitment to the country,
Ariston South Africa
was awarded
Business Enterprise of the Year
at the
25
th
edition of the Business Excellence Awards, the event hosted in Johannesburg by the Italian-SA Chamber of Trade and
Industries to recognise business excellence and solidarity within the longstanding Italian-South African business commu-
nity.
June
Global brand Elco was in the limelight at the
Red Dot Design Award 2023
, as the air-to-water heat pump AEROTOP SX was
honoured with the Red Dot for its modern simplicity, perfectly combined with innovative technology and an eye for sus-
tainability.
In Spain, global brand Ariston hosted an event to celebrate the integration of the
Fleck
brand, and introduced its new
premium ranges, the DUO range and FLECK range, as well as the Velis Wi-fi series.
Following the launch in Romania in January, global brand Ariston introduced the
One Team
platform in
France
.
Global brand
Wolf
hosted an event with all employees and their families to mark its
60
th
anniversary
, celebrating the
years of history that have made it a leading expert for a healthy indoor environment.
Global brand Ariston introduced
Nuos Plus S2 Wi-Fi
, the latest addition to its heat-pump water heater ranges, working
with propane, certified with A+ energy class, guaranteeing an extremely low noise performance and equipped with ad-
vanced connectivity features.
July
Global brand Ariston participated in the 2023 edition of
IndoBuildTech Expo
, the leading building and interiors exhibition
in Indonesia, showcasing its full range of water heating solutions, including the Wi-fi series, solar water heaters and heat-
pump water heaters suitable for both commercial and residential use.
The Ariston Group inaugurated in Follina, Italy, the
new Thermowatt Professional site
, a plant of 10,000 square metres
that testifies to the Group’s commitment to continue to strengthen its international footprint, while leveraging
compo-
nents of its own manufacture as a key competitive edge.
The Ariston Group inaugurated its
new offices in Ho Chi Minh
, Vietnam, welcoming local teams in brand new spaces
designed to foster teamwork and collaboration.
August
Following the succession announcement in May, the Board appointed
Maurizio Brusadelli
as the
new Chief Executive
Officer
of the Ariston Group.
While refreshing its key facilities around the world, the Ariston Group opened the doors of its
new offices in Dubai
, UAE,
expanding its local hub and renewing its commitment to the Middle East and Africa.
September
Our burners division brand
Ecoflam
celebrated its
50
th
anniversary
, hosting an event in Resana, Italy, to retrace its history,
acknowledge the results achieved and renew the company’s ambitions for the future.
The Ariston Group completed a business sustainability assessment through
EcoVadis
and earned a bronze medal, record-
ing a significant improvement in its performance over the previous year, positioning at the higher end of its band and at
the 68
th
percentile if compared to other companies’ scores.
11
October
Global brand Ariston opened the door of its new
Experience Center
in Jakarta, Indonesia, displaying its top-quality solu-
tions for water heating within an interactive product gallery aimed at offering an exclusive retail experience to both con-
sumers and professionals.
Ariston Group renewable solutions topped the charts in both the French and German markets, when in France the
Ariston
Nimbus Plus S Net R32
heat pump was tested by the consumer magazine Que Choisir, while in Germany the consumer
organisation Stiftung Warentest ranked the
Wolf CHA 10/400
in second position among the six air-to-water heat pumps
tested.
Strategic brand
Atag
celebrated its
75
th
anniversary
with a two-day event to engage both colleagues and installers through
educational sessions interspersed with moments of entertainment, and for the occasion it inaugurated its brand new
ComfortHub training center
, to support professionals in addressing the energy transition.
Global brand Ariston introduced the new Velis Dry Wi-Fi FE electric storage water heater equipped with
Demand Response
– a technology that enhances national grid flexibility and makes matching energy demand and supply possible by storing
energy, thus reducing losses and avoiding peaks.
The Ariston Group announced the opening of its
new offices in Providence
, US, located right at the heart of the Innovation
District and providing employees with a modern and comfortable working environment.
As part of its partnership with Politecnico di Milano, the Ariston Group was one of the key players involved in the
Hard-
ware & Software Codesign Academy
– a program developed by the Politecnico di Milano Career Service to train future
engineers through a series of interactive laboratories.
November
The Ariston Group was honoured with the
Premio Leonardo Qualità Italia 2023
, presented by the Comitato Leonardo -
Italian Quality Committee, in recognition of its steadfast commitment to quality, innovation, and internationalization.
December
The Ariston Group celebrated the first anniversary of its new global intranet
weARe
, launched with the purpose of offering
employees a new and unique space to thrive in as a global community.
The Ariston Group toasted
35 years in Vietnam
with a special event, which included an immersive exhibition, accompanied
by live performances and a series of entertaining activities.
Global brand Ariston participated in
Big 5 Global
– the annual meeting for the global construction industry taking place
in Dubai – to showcase the latest renewable solutions offered by the brand, ranging from solar water heaters to heat
pumps. Components brand Thermowatt was present as well, highlighting its latest thermostats that allow remote tem-
perature control and offer weekly programming and energy-saving modes.
The Ariston Group officially inaugurated its new offices in Saint-Denis, France, and welcomed local teams to vibrant new
spaces designed to embody the spirit of collaborative innovation that is characteristic of the Group.
4.3
Subsequent events
In January, the Ariston Group participated in AHR Expo 2024, in Chicago, to reaffirm its commitment to the North Amer-
ican market and to introduce its latest innovations, including water heating solutions from strategic regional brands HTP
Comfort Solutions and American Standard Water Heaters, and NTI heating equipment.
Global brand Wolf inaugurated a new campus in Hamburg, which adds to the existing German locations in Mainburg,
Koblenz, Osnabrück, and Berlin and expands the brand’s training offer, providing targeted learning sessions and webinars
to its community of professionals.
In February, the Ariston Group announced the completion of the acquisition of a production site in Egypt, near Cairo,
from historic Egyptian manufacturing company Universal Group, to further consolidate its manufacturing leadership in
the water heating sector in North Africa and the Middle East, markets with high growth potential.
The Ariston Group participated in the 2024 edition of the Internet of Things Observatory, organised by Politecnico di
Milano, to discuss the latest developments in the smart home industry and share updates on Ariston Group connected
services.
In March, as part of its Company Report 2023, the Ariston Group issued its Sustainability Report 2023, consolidating its
latest sustainability achievements and tracking its performance against the targets to 2030 stated in the ESG manifesto
Road to 100.
The dividend will be paid on 22 May 2024 (with an ex-coupon date of 20 May 2024 in accordance with the Italian Stock
Exchange calendar, and a record date of 21 May 2024). The Board of Directors resolved to convene the Annual General
Meeting on 6 May 2024.
4.4
Brand|Product performance
Market and business performance
In 2023 we witnessed an overall decrease in market volumes. The progressive shift toward renewable technologies is
continuing, though at a slower pace compared to previous years.
The global heating market has decreased, driven on one side by the changes in regulation and incentives in some core
European markets – such as Italy – and destocking effects; on the other side, some European markets experienced a
strong acceleration supported by incentives – such as Germany.
The hot water markets have been stable at global level with some volatility by individual market. European and Asian
markets were stable overall; the North American market, after a difficult start to the year, registered a strong recovery in
the second half.
Brand activities
Taking care of our brands continued to be a key lever to sustain our value and growth. In 2023, the Ariston Group focussed
on three core areas: brand portfolio management, strategic brand - Ariston, Wolf and Elco – consolidation, and execution
of the Ariston brand refresh.
Brand portfolio management
. While continuing to broaden its brand portfolio through acquisition
s
, the Ariston Group
refreshed its brand portfolio strategy and defined a comprehensive Group brand architecture, where each brand has a
clear role in terms of positioning and where some brand harmonisation paths are defined, with the objective of focussing
and prioritising investments to provide stronger and more competitive offerings to customers and consumers, globally
and by market.
Ariston, Wolf and Elco consolidation
. As part of the portfolio strategy work, the Ariston Group started by focussing on its
three key strategic brands - Ariston, Wolf and Elco - to further develop their positioning in order to maximise their re-
spective and combined market potential in product categories and operating models.
Execution of the Ariston brand refresh
. In 2021, the Ariston Group decided to upgrade the Ariston brand’s positioning
and visual identity to bring it closer to its values, while remaining loyal to its heritage and dedication to developing sus-
tainable and easy solutions for all families, thus resulting in the 2022 “The home of sustainable comfort” payoff and
campaign. In 2023, a strong focus was maintained to substantiate and consistently implement this brand positioning and
identity at global level, across all media and communication activities.
Heating Solutions and Services
Renewable solutions
After having recorded strong growth in 2022, the renewable technologies (hydronic heat pumps) market decreased in
Europe driven by specific market dynamics. Some of the key European markets (such as Italy) suffered from less favour-
able incentive schemes, while some other markets (such as Germany, Netherlands, UK) registered strong momentum.
Renewable heating technologies continued to be supported by government incentives in the form of fiscal stimulus (e.g.
Germany, UK, France, Italy) for the replacement of the installed base of conventional boilers.
Gas solutions
In 2023, the boiler market decreased in Europe and the Americas, showing signs of recovery only during the last months
of the year. The market trend was affected by the shift to renewables technologies and by high level of stock at the
beginning of the year in some markets such as North America and Italy.
In China, the overall market for boilers is progressively normalising after the discontinuation of the “coal-to-gas” incen-
tives; although still a limited share of the total market, the mix is progressively moving towards more environmentally
friendly high-efficiency products.
Air Treatment
In 2023, the important air recovery ventilation market, where the Ariston Group is mainly playing in Europe,
slightly
decreased. The Netherlands and Germany are the two largest markets.
14
Hot water solutions
Renewable solutions
In Europe, in 2023 the market for hot water heat pump solutions registered solid growth in volumes, above other tech-
nologies. The demand for this product category keeps increasing in other regions of the world.
Electric storage solutions
In 2023, the demand for electric storage is estimated to be stable and back to the historic pre-Covid level.
Asian markets recorded different trends: Vietnam was affected by local economy’s slowdown, while India grew slightly.
Overall the Middle East and African markets remained stable.
In North America, and particularly in the US, the market grew significantly, recovering positively during the second part
of the year.
Gas solutions
The Group’s main markets are in North America (US and Mexico): the US market grew in 2023, while the Mexican market
decreased.
The main European markets where the Group operates registered a decrease in gas-based instant water heating solu-
tions. In North America the US market was stable, while Mexico recovered after a difficult 2022.
Burners
The burners market has suffered a general slowdown in volumes. In France residential oil boiler sales witnessed a negative
trend. The residential market in Europe registered an overall contraction, partially mitigated by a positive trend in me-
dium- and high-capacity projects. In China, the market was negatively impacted by the general economic situation, suf-
fering in particular from the real estate crisis; the fast-growing presence of local manufacturers raised price pressure.
Components
While the first half was in line with the previous year, in the second half the components business suffered from a market
slowdown, due to a lack of demand and high stock levels. Demand for electric heaters and thermostats for water heaters
saw an overall decrease, while electric heaters for professional and industrial applications slowed down in the second
half of the year, mainly impacted by the catering sector. Demand for heaters for domestic appliances instead remained
stable.
4.5
New Products, Services, Research and Development
Hot Water Technologies
Renewable Products
In 2023 the Ariston Group launched two key heat-pump water heater platforms – its first heat-pump water heater for
the US market and the Nuos Plus Wall-Hung S2, equipped with propane technology.
Leveraging on Ariston’s global experience, the heat-pump water heater for the US market is available in 3 capacities (50,
65 and 80 gal), while an extension to 40 gal is planned for Q1 2024. It addresses local needs in terms of comfort and
installation and features premium performance (up to 4.01 UEF and 49 dB(A) low noise), Wi-Fi connectivity, Eco Port,
integrated leak sensor and optional shut-off valve.
Ariston’s Nuos Plus Wall-Hung S2 is the brand’s latest wall-hung platform for Europe, working with R290 gas refrigerant
(GWP = 3) and already compliant with the F-Gas requirements for 2027. Available in 3 capacities (80L, 100L and 150L), it
comes with a new iconic design and is equipped with innovative solutions to reach higher COP and outstanding perfor-
mance in terms of heating time, air working range and low noise; it also boasts new working modes and premium features
such as embedded Wi-Fi connectivity, photovoltaic connection and Bus Bridge Net for system integration, to meet all
customer needs.
Electric Products
In the second quarter of 2023, the Ariston Group renewed its Racold offer, launching new products in India in the storage
and micro-storage segments – respectively Omnis and CDR, and Altro and Pronto – matching the highest energy classes,
and featuring functions such as Children Care, which reduces the risks of overheating. In the same period, in South Africa,
global brand Ariston extended its Axios range, introducing its first electronic product for the market, equipped with a
wired remote control with display, eco-function and a leakage sensor.
Then, in the third quarter, Ariston released the
new Lydos Wi-Fi in Europe, with a renewed interface, as well as the new Andris Elite, extending connectivity across the
full product range. Finally, in the USA, the Group launched the first Demand Response product compliant with Oregon
and Washington states’ local regulations.
Heating Solutions and Services
Heat Pump Systems and Solutions for the Residential Segment
The Ariston Group did not stop innovating its heat pump portfolio, in line with trend projections for coming years.
Global brand Ariston delivered key projects to both increase the attractiveness of Nimbus NET R32 in consolidated mar-
kets and pave the way to new ones. In particular, the brand introduced dedicated products for the Spanish market, with
higher allowable height and distance differences (respectively of 30m and 40m) between outdoor and indoor units, to
increase penetration in multi-family buildings – as the first rollout involves sizes up to 8kW, remaining capacity sizes will
follow in 2024. Additionally, the development of a Nimbus line-up for the UK has been key to unlocking a new market for
Ariston’s residential portfolio – from June 2023, Ariston’s signature Nimbus NET R32 has been commercially available in
mono-clock, refrigerant split and hybrid versions, and further developments to expand the local residential offer are in
the pipeline. As regards the global brand Elco, the AEROTOP SX heat pump range, which was honoured with the prestig-
ious Red Dot Design Award, was further extended with the 13kW model, which works well in existing single-family houses
and, in cascade combination, also provides a solution for small multi-family buildings. Finally, global brand Wolf intro-
duced the new CHA-16/20, the largest version of its frequently installed mono-block heat pump, which – thanks to an
additional power rating – is specifically suitable for installation in large, detached houses, apartment buildings, and the
commercial sector. The brand also developed an efficient hybrid centre, allowing easy supplementation of a heat pump
centre in the existing conventional heating system, and launched seven versions of the FHA mono-block heat pump which,
by using refrigerant R32, represent a great solution for energy-efficient construction projects, particularly in new builds.
High-Efficiency Boilers for the Residential & Light Commercial Segments
In North America, the NTI product range was enriched with the new TFTN series –next-generation residential & light
commercial boilers, boasting strong reliability, signature quality construction and state-of-the-art technology. The TFTN’s
stainless steel heat exchanger is ASME-certified and uses down-fired fire tube technology, an industry-proven design that
optimises heat transfer and increases energy efficiency. Equipped with a proprietary control panel that is intuitive and
easy to program, as well as with connectivity features that allow remote diagnostic and 24/7 monitoring, TFTN boilers
16
are certified low NOx and provide up to 98% heating efficiency, reducing emissions while delivering high-quality heating.
Available in 85, 110, 150 and 199 MBH sizes, the range also includes options from 285 to 850 MBH for commercial appli-
cations.
As a member of the European Clean Hydrogen Alliance, the Ariston Group has also continued to invest in hydrogen re-
search and development. Following the launch of the ONE+ NET series – the first wall-hung condensing boiler range cer-
tified by DVGW for gas blends with up to 20% hydrogen introduced in Europe in 2022 – in 2023 global brand Ariston
released the first condensing boiler certified to operate on 100% hydrogen*.
*hydrogen blend availability in the grid is subject to national governments’ sourcing policies.
Solutions for the Commercial Segment
In 2023, global brand Elco finalised the rollout of Aerotop M and L commercial heat pumps in all target countries, further
enriching a portfolio of solutions that – by allowing multiple installation configurations, thanks to stand-alone solutions
or to single generators combined in hybrid systems – makes the brand one of the key players on the market.
Air Treatment
Domestic Ventilation
Global brand Wolf expanded its controlled domestic ventilation portfolio, adding two additional sizes to its CWL series,
with air flow rates of 450 and 600 m³/h, along with complementary accessories.
In parallel, Brink introduced a range of renovation solutions to fit existing buildings’ needs. In particular: Flair 600 unit is
specially designed for large projects with high ventilation demand; the Enthalpy exchanger increases heat recovery per-
centages and helps humidify spaces, also being very easy to install; Elan 25 3.0 is the latest addition to a range of appli-
ances for cooling, heating and ventilating buildings connected to heat pumps or district heating.
Air Handling
Global brand Wolf launched the CGL 2 edu, a floor-standing air-handling solution designed for quick retrofitting in offices
and classrooms which, despite a high air flow rate of up to 1,100 m³/h, is particularly quiet, as well as the new CFL edu,
which is also well-suited for existing buildings, can be installed directly under ceilings, and has a high flow rate of up to
1,150 m³/h.
Services and Parts
Direct and Indirect Services
In the countries where it adopts a Direct Service Model, the Ariston Group invested in recruiting, training, and processes
and systems improvement, to allow its Service Teams to capitalise on the energy transition, while providing the highest
level of service to both installers and end-users.
Global brand Wolf developed a heat pump configurator tool to provides installers, planners, energy consultants, and
wholesalers with a rapid dimensioning tool for heat pumps, supporting initial consultation phases. The Group also
launched a new front-end platform called Expert, aimed at to authorised service centres, to favour both UX/UI and inter-
nal needs for quality data, and make a complete end-to-end paperless process possible. Additionally, it worked to develop
a new set of business intelligence reports for indirect service markets that are already available to all SAP CRM countries.
Parts
Keeping customer satisfaction as a priority, in 2023, the Ariston Group successfully managed several supply chain and
footprint challenges. While improving harmonisation processes and spreading best practices in spare parts management
worldwide, the Group launched the remanufacturing pilot initiative.
Connected Home Services
The Ariston Group continued working on improving the innovative services offered through its B2C, B2B and interopera-
bility apps and tools, ultimately creating enhanced Connected Home Services that rely on advanced analytics and AI.
More specifically, the Group focused on various value creation initiatives, including
:
17
•
Ariston NET
:
the app designed to manage customers’ thermal comfort solutions by providing a user-friendly
interface for easy control, consumption optimisation and quick assistance;
•
Ariston NET PRO
remote assistance: the web platform that leverages AI technologies to empower professionals
to deliver top-tier service to customers, ensuring effective and timely support, while reducing the need for phys-
ical interventions;
•
Ariston Net OPEN
: the set of solutions to facilitate the integration of connected products and services into smart
home ecosystems and multi-brand facility or maintenance management software systems.
Home Energy Management and Demand Response
Through Demand Response and Home Energy Management technologies, the Ariston Group is making significant strides
in contributing to the energy transition. In 2023, the Group introduced the new Velis 2.5 DR in France, a product designed
to contribute to the stability of the electricity grid, and the new Powerflex Solar in Italy, a solution that helps prevent
blackouts, while enabling energy self-consumption. As it explores new product categories and integrates new technolo-
gies, its commitment to both technologies remains steadfast.
Components
The Components Division focused on the development of new products and technologies, to stay at the forefront of
emerging market trends:
•
Connectivity
: within its range of Wi-Fi soluXons, components brand ThermowaY developed a tailored smart
immersion heater for the UK;
•
Anti-counterfeiting:
ThermowaY developed a system based on NFC technology that allows dealers to verify the
authenticity of thermostats and heating elements through their smartphone;
•
Flow heaters for HHP
: in line with efforts in previous years, ThermowaY conXnued to opXmise and automate
the production of its electric heaters for HHP, with “back-up” and “booster” functions.
Burners
The Burners Division focused on the development and upgrading of customised products, to capitalise on emerging op-
portunities. In particular, it focused on:
•
Residential Bio-fuel
, through the development of combustion technologies for new biodiesel fuels, including
F100 and HVO;
•
Dual Fuel range
, to fulfil the cl3 Low NOx emissions on gas, with the homologation of the range up to 4 MW;
•
Special projects
, designing products capable of meeting the increasing demand for solutions running alternative
fuels such as biofuels, syngas, H2 or working in complex industrial applications. In particular, three special 24
MW RPD Low NOx burners for industrial waste gas, a mixture of carbon monoxide and hydrogen, have been
developed to be installed on a 70MW steam water tube boiler for an energy plant in Belgium.
4.6
Manufacturing & Supply Chain operations
Procurement
2023 saw inflation receding from its 2022 peaks, with material availability back to normal, as well as an inventory build-
up in the second part of the year that drove down the price of major commodities (steel, polyurethane, non-ferrous),
although not back to historic averages. A similar dynamic affected energy costs. In this scenario, the Ariston Group clawed
back the extra costs faced in 2022 and accelerated the focus on multi-sourcing, localisation and key partners as the main
pillars of its strategy. The Group also moved forward in its digitalisation project, introducing three sourcing modules as
per the plan, and selected the suppliers to involve in its ESG journey, in line with its supply chain ESG target to 2030.
Manufacturing
Throughout 2023, Ariston Group production sites focussed on performance, to accommodate demand in a context of
significant fluctuation in volumes and mix while continuing the gradual shift towards renewables, and to combine the
highest safety and quality standards with the optimum cost and efficiency levels. In line with the commitment to progres-
sively improving such performance and eliminating waste, manufacturing is working to further expand the World Class
Manufacturing approach embraced since 2011 to new sites and is constantly updating its equipment to be aligned to
state-of-the-art technologies.
Supply Chain and Logistics
After three years of disruption, in 2023 supply chain and logistics conditions returned to normality as regards sea flows
(full container loads). From January to November, the Ariston Group witnessed a noteworthy decline in tariffs and a
concurrent surge in availability, effectively returning to pre-COVID-19 conditions. Entering December, nonetheless, the
escalation of regional tensions that resulted in targeted attacks on commercial vessels crossing the Red Sea, marked the
commencement of a new phase of volatility and uncertainty. Affecting a vital trade route, the Red Sea crisis significantly
disrupted shipping operations. Shipping companies like Maersk and others faced threats to their vessels, leading to re-
routing decisions and operational pauses. The alternative route around the Cape of Good Hope, while safer, is longer and
more expensive, due to increased fuel bills and higher insurance premiums. Additionally, the Group had to take counter-
measures to balance the increase in stock for both raw materials/components and finished goods, mainly due to the
fluctuation in demand for renewables.
In 2023 the Ariston Group successfully executed some strategic activities it had planned, aimed at maximising resilience
by balancing investments and enabling end-to-end risk management. It invested in two initiatives: Digital Supply Chain
and One Team, respectively related to tools and organisational improvements, enhancing visibility across extended supply
chains, and improving capability to manage disruptions at domestic, regional, and global level through technology.
Finally, the Group continued to invest in the “World Class Logistics” improvement program, to enhance the efficiency and
quality of operations starting from some key European warehouses. The main distribution hub for the Italian market,
located in the Marche region, is a good example, as it introduced a new approach, with a clear roadmap for the develop-
ment in Primary Logistics warehouses in 2024.
Quality
During 2023, the Ariston Group Quality Roadmap, which was launched in 2021, was further implemented and developed.
Some of the major projects have been completed, defining a Quality Strategy, strengthening product development, in-
creasing the robustness of the risk assessment method, and improving the system of Quality KPIs. Other long-term pro-
jects have been decisively advanced, including the increase in quality awareness within the organisation, the strengthen-
ing of manufacturing, supplier and service processes, as well as the improvement in cost analysis capabilities. As the new
Expert app for service centre activities was launched, over the year the Quality function was reinforced to support the
transformation of operations, and through a new integrated organisation setup designed to follow the Group’s global
growth.
4.7
Human Resources
Workforce
Following the acquisition of Wolf-Brink in January 2023, the workforce of the Group includes for 2023 the new perimeter,
while the 2022 and 2021 figures reflect the previous Ariston Group structure.
As at 31 December 2023 the Group’s workforce stood at 10,769 employees (of which 2,792 from the Wolf-Brink acquisi-
tion), reporting a substantially flat headcount for the Ariston legacy
compared to December 2022 (+2 headcount) and an
increase compared to December 2021 (+1.5%).
The increase compared to year-end 2022 is attributable mainly to the Wolf-Brink acquisition.
People Attraction, Engagement and Inclusion
Recruiting and retaining the best talent is a critical cornerstone to supporting and sustaining our business growth ambi-
tions. It enables us to address staffing challenges such as the competitive labour market, the size of the talent pool and
skill shortages in areas that are strategic for the success of our Group.
In 2022, we reinforced our employer branding strategy to enhance our positioning and increase our visibility at global
level. Local initiatives demonstrated the strength of our employer positioning (we received best employer awards in two
important countries, Vietnam and India), and Group initiatives were key to attracting talent and informing young candi-
dates, especially with a digital and engineering background, of the opportunities offered by the Ariston Group.
We believe that strategic partnerships with universities and engineering schools in key geographies can ensure a regular
flow of candidates, while also establishing education pathways to respond to our specific competence needs. In this
sense, last year we consolidated our partnership with Politecnico di Milano (with the additional launch of the Hardware
and Software Co-design Academy), and signed a new agreement with Università Politecnica delle Marche for a stronger
collaboration on engineering activities. Besides Italy, also Germany plays an important role in sourcing key skills, and the
cooperation with local technical schools remains an important channel.
Diversity and inclusion were also part of our people agenda, striving towards being a multinational company in which
diverse strengths contribute to building positive and productive interaction, cooperation and synergy among people,
cultures and experiences, driving business growth, value creation and organisational performance.
With an initial focus
on gender, in an industry where women are traditionally under-represented, we focussed both on addressing the short-
age of STEM female profiles, and on supporting our female leaders in their continuous development within the organisa-
tion.
HR Digital Roadmap
One of the pillars of the HR transformation program is the
Digital Roadmap
, which consists in the digitalisation of key HR
processes, in order to increase data quality, HR KPIs and analysis. Developing meaningful data analytics will be instrumen-
tal for reporting purposes and analysing trends, as well as generational shifts. This will enable the Group to predict and
meet the needs of its workforce.
This initiative spans the entire organisational landscape and aims to seamlessly integrate new acquisitions and pre-exist-
ing HR processes into a
unified digital framework
, with the ultimate goal of understanding, predicting and meeting the
trends and ambitions of all employees as well as potential candidates.
In 2023 we worked on the set-up of the HR data backbone, which will be the basis for the
launch of Employee Central as
our source for supporting an employee along each step in their journey in the Company
, starting from the Recruiting,
Hiring and Administrative processes to Performance and Learning as the first processes to be enhanced and fully digital-
ised by the end of 2024.
Wolf/Brink integration program and change management plan
As part of our
integration program
with the acquired Wolf/Brink companies, we set up 13 workstreams with many of
them having subgroups working on specific topics. More than 100 people have been involved in the workstreams to
various degrees.
Not surprisingly, we experienced differences in the way we work, meeting new colleagues, understanding commonalities
and differences and building new collaborations within the organisation. Thus, after having measured the temperature
20
of the organisations
impacted through a survey, involving more than 130 employees from both the Ariston and
Wolf/Brink organisations, in July we launched a
Change Management program
to support the teams in better understand-
ing each other, better addressing priorities and making our teamwork more effective and enjoyable and making the tran-
sition towards shared organisation as smooth and effective as possible.
The Change task force designed a transformation program, with the support of external consultants, with the following
steps:
Step 1) Culture analysis and understanding:
Focus groups were organised to better understand similarities and differences between the two organisations and to
reflect on initial experiences of collaboration with the objective of creating a culture of working together based on com-
mon principles.
Face-to-face meetings of four hours each were held for each focus group to gather input and feedback that was instru-
mental in shaping our “new ways of working”, leveraging the positive aspects of both organisations and ensuring that we
effectively address any challenges that may arise.
We primarily involved the following functions: Manufacturing, Procurement, Heating R&D and Product Management, and
Finance, following the organisations’ integration plan and the release of the official announcement of the set-up of new
structures.
Step 2) Solution design:
After the first step of culture analysis, in 2024 we are going to proceed with the above-mentioned functions with dedi-
cated Team events/ workshops to define the common way of working and to clarify team objectives for the upcoming
years/collaboration approach.
This will always be supported by a strong sponsorship of the divisional Leaders, ensuring onboarding of the teams, clarity
in communication and commitment
.
Step 3) Cascading and implementation:
The last part of the program - expected in the second half of 2024- will envision cascading sessions to all people in the
divisions to spread the new way of working at all levels of the organisation and align on future common objectives.
This will be a primary responsibility of Line managers who - supported by the Change Management team - will conduct
roadshows and cascading sessions with the teams.
The overall Change Management Program is sustained by a Communication Campaign
across all relevant internal channels
via Newsletter, Video Interviews, etc. to keep the organisations updated on progress and help people understand the
impacts of the change and the next steps.
Employees’ skills development and growth: Global Leadership Program (GLP) extension and Men-
toring Program launch
In line with the corporate objective of facilitating upskilling and reskilling of our workers while continuously creating a
learning environment to help people grow both personally and professionally, in 2023 we kept extending our
Global
Leadership Program
to cover the full population by end of the year.
The Global Leadership Programme (GLP) - launched for the first time in 2021 - is focused on improving employees’ com-
petencies according to the approach outlined in the Ariston Group’s Leadership Model:
“LEAD CHANGE, LEAD BUSINESS,
LEAD PEOPLE”
. The initiative strives to activate, support and strengthen leadership skills amongst employees from 25
different countries. At its core, the scope is to move towards Leaders as Coaches and to foster an effective feedback
culture, in order to provide a consistent managerial style throughout the Group and help people grow professionally.
Initially, the fully digital GLP was tailored for Executives and Senior Managers. The program was then extended to the
Mid-Management level and, in 2023, it involved
Individual Contributors and every new employee
, at any level, through
six interactive modules composed of individual business coaching journeys, collaborative team learning sessions and
online content delivered in eight languages.
Moreover, in 2023, the Ariston Group unveiled the
Mentoring Program
, based on the concept that sharing knowledge
within the company helps people grow both personally and professionally. The Program therefore serves as a catalyst for
individual development in a journey where experienced mentors guide mentees. It also envisages an approach to skills
enhancement designed to help mentees navigate challenges and prepare for future opportunities. In terms of benefits,
21
there are three ways in which mentorship helps with employee engagement: firstly, by providing opportunities for pro-
fessional development, tapping into the knowledge of more senior employees; secondly, by giving employees a voice to
speak with leadership, breaking down communication barriers; and finally, by building supportive working relationships
and promoting a growth-focused mindset.
This initiative supports mentees throughout assignments by transferring essential organisational knowledge and exposing
them to diverse communication styles and problem-solving skills. Currently in the pilot phase, the program engages
10
mentors and 10 mentees
, carefully selected across geographies and functions, with a view to gender balance.
The program’s training structure
is at the centre of its success.
Mentors undergo
four comprehensive training modules,
equipping them with core mentoring skills, conversational techniques and effective closing strategies. Regular group su-
pervision is also included. Mentees, on the other hand, benefit from modules focussed on structuring conversations and
setting goals.
4.8
Regulation
Policy and regulatory developments have featured very high on the agenda of most governments and regulators across
the world.
At international level, the
28
th
United Nations Climate Change Conference
took place in Dubai, United Arab Emirates
resulting in the landmark
UAE Consensus
, which includes an unprecedented reference to “transitioning away from fossil
fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve
net zero by 2050 in keeping with the science.”
In the
European Union
we saw the adoption of the main elements of the
Fit-for-55 Package
, a mammoth set of directives
and regulations that aims to slash greenhouse gas emissions by 55% by 2030 and that holds the potential to reshape our
sector. In particular, the following legal acts were finalised and came into force in 2023:
■
amended Energy Efficiency Directive (Directive 2023/1791), with an increased ambition on energy efficiency and
heightened obligations to save energy.
■
amended Renewable Energy Directive (Directive 2023/2413), which for the first time ever placed an obligation
on national governments to source 49% of the energy needed in buildings from renewable sources.
■
amended Emission Trading System Directive (Directive 2023/959), which will introduce carbon pricing for fuels
used in heating buildings in the scheme as from 2027, resulting in higher costs for heating with gas or oil.
■
new Social Climate Fund (Regulation 2023/955) – which will provide dedicated funding to the most affected
vulnerable groups, such as households suffering energy poverty, so that they are not left behind in the energy
transition.
■
new Carbon Border Adjustment Mechanism (Regulation 2023/956) – which aims to put a price on the carbon
emitted during the production of goods that are imported into the EU.
At the same time, the co-legislators of European Parliament and Council of the EU reached political agreements on the
following legislative acts, with the view to rubber-stamping them in the first half of 2024:
■
revised Energy Performance of Buildings Directive, which will prioritise and incentivise the use of higher effi-
ciency and renewable HVAC technologies.
■
revised F-Gas Regulation, which will introduce, from 2025 onwards, restrictions on placing on the market of heat
pumps containing certain types of refrigerants with a higher global warming potential.
■
new Ecodesign for Sustainable Products Regulation
,
which aims at promoting the durability, repairability, reus-
ability, upgradability, and recyclability of products and that is likely to have an impact on the HVAC sector only
at a later stage, circa 2030.
■
the revision of the Electricity Market Design – which will have an impact on all electrically-powered, smart and
connected appliances such as heat pumps and electric water heaters.
Finally, new proposals impacting the HVAC sector were unveiled by the European Commission in 2023 and will require
finalisation in 2024, including:
22
■
the new Net-Zero Industry Act, which is meant to strengthen the European manufacturing capacity of net-zero
technologies – including heat pumps – and overcome barriers to scaling up the manufacturing capacity in Eu-
rope.
■
the new Critical Raw Materials Act, which is meant to ensure secure, diversified, affordable and sustainable
supply of critical raw materials, including those contained in heating technologies, in particular heat pumps.
Within Europe, the debate has been most heated in
Germany
, with the adoption of the revised
Gebäudeenergiegesetz
(Buildings Energy Act), which includes a key requirement to power heating systems with at least 65% renewable energy
with a view to phasing out the use of fossil fuels in buildings by 2045. At the same time, changes to the incentive system
at Federal level were also discussed and will become operational in 2024. Meanwhile, in
France
President Emmanuel
Macron promised to unleash a new wave of investments in clean technologies with the Green Industry program (
Industrie
Verte
), which also includes heat pumps. In the
United Kingdom
, the Government promised to relax some of the policies
around boilers but at the same time increased sharply (+50%) the incentive available under the Boiler Upgrade Scheme
for those customers opting for heat pumps instead. Also, the UK announced an indefinite extension of the use of CE
marking for goods being placed on the market in Great Britain (England, Wales and Scotland).
Across the Atlantic, the
US Administration
put the final touches to the Inflation Reduction Act (IRA), making $9 billion
available to the states to distribute to low- and moderate-income families for the purchase and installation of new high
efficiency heat pumps and more. Higher income families can benefit from expanded 25C tax credits which were also
expanded under the IRA.
New rules from the Environmental Protection Agency (EPA) were adopted with a view to limiting
emissions from hydrofluorocarbons by restricting the use of certain hydrofluorocarbons in several sectors, including heat
pumps and air conditioners, but not for heat-pump water heaters, which remain unregulated.
Finally, the Department
of Energy has adopted several initiatives significantly affecting our industry at large.
In the autumn, the final regulation
for future commercial water heating equipment efficiency requirements was published, requiring much of the product
to be highly efficient, with compliance starting in 2026.
For residential products, a notice of proposed rulemaking was
published affecting both electric storage and gas storage water heaters. The final regulation is expected in spring 2024,
with compliance required sometime in 2029.
Finally, it must be noted that in 2023
several countries
either started or continued working on regulatory initiatives related
to product efficiency, safety, and waste management. Among others, new regulatory initiatives were implemented in
markets such as Ghana and Oman with regards to energy efficiency, Morocco with regards to the safety of gas appliances
and India with regards to the waste management of electrical and electronic products, which will have to comply with a
Restriction of Hazardous Substances (RoHS) scheme from April 2025. In the EU, debate continued on new ecodesign and
labelling rules for both space heaters and water heaters, including a controversial proposal to ban “standalone fossil fuel
boilers” which has since been postponed after a consultation with national governments and interested stakeholders.
4.9
Group Financial Review
4.9.1
Net Revenue Performance
2023
2022
Thermal Comfort
2,910.5
94.1%
2,187.4
92.0%
Burners
92.9
3.0%
95.9
4.0%
Components
88.4
2.9%
95.5
4.0%
Total Net Revenue
3,091.8
100.0%
2,378.8
100.0%
Revenue by business line
Thermal Comfort
. Serves the Group's three main business categories, Hot Water, Heating and Air Treatment, and repre-
sents the Group's largest division, recording revenue for 2023 of € 2,910.5 million, or 94.1% of total revenue, compared
to
€ 2,187.4 million in 2022 (92.0%), up by € 723.1 million or 33.1% (of which -2.0%
organic and foreign exchange
impact).
On 2 January 2023, the Ariston Group completed the acquisition of Wolf-Brink (previously called “CENTROTEC Climate
Systems”) which is included in the Ariston Group’s perimeter starting from January 2023. The revenue increase related
to the perimeter variation as at 31 December 2023 is equal to € 808.2 million, entirely included in the Thermal Comfort
perimeter. Wolf-Brink is active mainly in Germany and the Netherlands with the Wolf, Brink and Nedair brands in the
heating, air handling and ventilation industries.
Burners
. Recorded net revenue of € 92.9 million for 2023, or 3.0% of total net revenue, compared to
€ 95.9 million in
2022 (4.0% of total revenue), with a € 3.0 million or 3.1% decrease (of which -3.0%
organic and foreign exchange impact).
The lower turnover is essentially due to a significant market slowdown in France and China which has seen volumes
decrease, partially offset by a price increase and a more favourable mix.
Components
. Recorded net revenue of € 88.4 million for 2023, or 2.9% of total net revenue, compared to € 95.5 million
in 2022 (4.0%), down € 7.1 million or 7.4% (of which -6.6%
organic and foreign exchange impact). The decrease in revenue
was driven by a slowdown in both the Professional business due to a general crisis on the Ho.Re.Ca market and Domestic
business due to customers’ high stock levels.
Net revenue by geographical area
At 31 December 2023 the net revenue by main country is detailed below:
Country
2023
2022
Netherlands (country of domicile)
132.5
56.6
Germany
811.7
110.2
Italy
310.6
374.6
France
230.0
219.9
Other countries
1,607.0
1,617.5
Total
3,091.8
2,378.8
Europe
. This is the Group's largest market, recording net revenue of € 2,281.4 million for 2023, or 73.8% of total revenue,
compared to € 1,536.7 million, or 64.6%, in 2022, up € 744.7 million or 48.5% (of which -2.8% organic and foreign ex-
change impact). The decrease was entirely driven by the strong heating market slowdown in Italy due to the end of
government incentive schemes on renewable and high efficiency products. The growth on some important markets -
such as Germany, Switzerland, and France - was not able to compensate the significant heating market slowdown in Italy.
On the water heating side with general stability in terms of volumes, performance was driven by pricing that offset an
unfavourable mix effect.
24
Asia, Pacific & MEA
. This is the second largest market for the Group, recording net revenue of € 535.9 million for 2023,
or 17.3% of total revenue, compared to € 541.8 million, or 22.8%, in 2022, down € 5.9 million or -1.1% (of which 4.2%
organic and foreign exchange impact). The decrease was driven by negative effect from the local currencies (mainly the
Chinese Renminbi, Australian Dollar, Israeli Shekel and South African Rand). The organic growth was driven by a booming
water heating renewable market in Australia fuelled by a government incentive scheme and an overall positive effect on
prices, partially offset by lower volumes essentially due to the decision to exit the Chinese domestic water heating market
starting from Q2 2023.
Americas
. This is the Group's third largest market and reported revenue of € 274.5 million for 2023, or 8.9% of total net
revenue, compared to € 300.3 million, or 12.6%, in 2022, with a decrease of € 25.8 million, or -8.6% (of which -10.3%
organic and foreign exchange impact). The decrease was due to a strong reduction on the US and Canadian heating
market.
On the water heating business, the high level of customers’ stock led to substantially stable volumes with a positive effect
from prices associated with an unfavourable mix.
Furthermore, the Group decided to stop its activities on the Argentinian market.
Perimeter variation
On 2 January 2023, the Ariston Group completed the acquisition of Wolf-Brink (previously called “CENTROTEC Climate
Systems”) and this is included in the Ariston Group’s perimeter starting from January 2023.
Ariston Holding N.V. purchased 100% of both ownership and voting rights of Wolf-Brink from its parent company, Cen-
trotec SE, for € 625.8 million in cash and approximately 41.4 million Ariston’s shares.
The revenue increase related to the perimeter variation as at 31 December 2023 is equal to € 808.2 million.
4.9.2
Condensed income statement
The table below shows the income statement
(1)
for 2023, with a comparison with the previous year, and a breakdown
of the total change by organic growth, perimeter, exchange rate effects and hyperinflation.
2023
2022
Total
change
%
of
which
organic
%
of which
perimeter
%
of which
exchange
rates
and
hyperinflation
%
(in € million)
NET REVENUE
3,091.8
100.0%
2,378.8
100.0%
713.0
30.0%
-52.5
-2.2%
808.2
34.0%
-42.7
-1.8%
Other revenue and
income
58.3
1.9%
42.7
1.8%
15.6
36.5%
Revenue and Income
3,150.1
101.9%
2,421.5
101.8%
728.6
30.1%
Operating income
(expense)
-2,864.4
-92.6%
-2,227.8
-93.7%
-636.6
28.6%
OPERATING PROFIT
(EBIT)
285.7
9.2%
193.7
8.1%
92.0
47.5%
2.8
1.4%
89.3
46.1%
-0.0
-0.0%
Adjustment on operating income (expense)
28.5
0.9%
28.9
1.2%
-0.4
-1.4%
OPERATING PROFIT
ADJUSTED
(EBIT ADJUSTED)
314.2
10.2%
222.6
9.4%
91.6
41.2%
-17.5
-7.9%
109.2
49.0%
-0.0
-0.0%
Financial Income and
Expense
-30.8
-1.0%
-18.6
-0.8%
-12.2
65.6%
Profit (loss)
on investments
-1.3
-0.0%
4.7
0.2%
-6.0
-127.7%
PROFIT BEFORE TAX
253.6
8.2%
179.8
7.6%
73.8
41.0%
TAXES
-62.4
-2.0%
-39.5
-1.7%
-22.9
58.0%
NET PROFIT
191.2
6.2%
140.3
5.9%
50.9
36.3%
Net profit attributable
to non-controlling
Interests
0.0
0.0%
0.1
0.0%
-0.1
-100.0%
Group Net profit
191.2
6.2%
140.3
5.9%
50.9
36.3%
Tax effect of
Adjustment
on operating
income (expense)
-7.8
-0.3%
-6.3
-0.3%
-1.5
24.3%
Reversal of non-recurring
taxation effect
0.0
0.0%
0.0
0.0%
0.0
0.0%
Tax adjustments
-7.8
-0.3%
-6.3
-0.3%
-1.5
24.3%
NET PROFIT ADJUSTED
211.8
6.9%
162.9
6.8%
48.9
30.0%
Net profit attributable
to non-controlling
Interests
0.0
0.0%
0.1
0.0%
-0.1
ns
Group Net profit
adjusted
211.8
6.9%
162.9
6.8%
48.9
30.0%
Total depreciation and
amortisation
131.4
4.2%
89.8
3.8%
41.6
46.3%
EBITDA
417.1
13.5%
283.5
11.9%
133.6
47.1%
2.6
0.9%
131.0
46.2%
-0.1
-0.0%
EBITDA Adjusted
422.2
13.7%
305.3
12.8%
116.9
38.3%
-15.5
-5.1%
132.5
43.4%
-0.1
-0.0%
(1) For information on the definition of alternative performance measures, see the paragraph ‘Definitions and reconciliation of the Alternative Perfor-
mance Measures (APMs or non-GAAP measures) to GAAP measures’
The Ariston Group ended 2023 with € 3,091.8 million in consolidated Net revenue, up € 713.0 million and +30.0% from €
2,378.8 million in 2022. The increase arises from the organic decrease of the Group (-2.2%) and from a perimeter variation
related to the business combination with the Wolf-Brink group finalised in January 2023.
On the Ariston Legacy perimeter, the Thermal Comfort division performance was affected by the end of a government
incentive scheme for heating products on the Italian market.
The Burners division recorded lower turnover due to a market slowdown in some important areas, whilst the decrease
for the Components division was linked to industry weakness on both domestic and professional products.
EBITDA
amounted to € 417.1 million compared to € 283.5 million in 2022. As a percentage of net revenue, EBITDA in-
creased from 11.9% in 2022 to 13.5% in 2023. The acquisition of Wolf-Brink positively contributed to the achievement of
the favourable Group outcome.
EBITDA adjusted
totalled € 422.2 million in 2023, rising by € 116.9 million compared with 2022. As a percentage of net
revenue, it stood at 13.7%, higher than the 12.8% recorded in 2022. The adjusted component amounted to € 5.1 million,
compared to € 21.8 million in 2022.
The reduction of the adjusted component in EBITDA comes from the impact of the extraordinary flash floods on 15 Sep-
tember 2022 that hit Italy’s central Marche region. The flash floods affected operating profit in several Income statement
lines that were treated as adjusted operating income/expenses. The Ariston Group suffered direct damages for € 1.4
26
million during 2023 and received insurance reimbursement for € 9.3 million covering costs for the current and previous
year (net positive impact in the year equal to € 7.9 million).
EBIT adjusted
was up in absolute terms and as a percentage of net revenue, amounting to € 314.2 million and 10.2%,
respectively, compared to € 222.6 million and 9.4% in 2022.
The adjusted components, relevant to EBIT only, amounted to € 28.5 million (€ 28.9 million in 2022) and were impacted
for € 23.4 million in 2023 (€ 7.1 million in 2022) by the amortisation of intangibles arising from the 2019 acquisition of
the Mexican Calorex group, the acquisition of the Chromagen group in 2022 and the acquisition of Wolf-Brink in 2023.
EBIT
for the period amounted to € 285.7 million, 9.2% as a percentage of net revenue, compared to € 193.7 million, 8.1%
of net revenue, in 2022. Wolf-Brink figures strengthened the results of the Group quite considerably. During 2023 EBIT
confirmed the favourable trend of the previous year, more specifically in the rising mix and price effect. In addition, the
contribution of Wolf-Brink and a better absorption of raw materials and logistics costs led to an increase of the percentage
of EBIT compared to net revenue of +1.1pts compared to 2022.
Overall, the Group reported € -30.8 million in financial income and expenses, with a € -12.2 million increase in financial
expenses reflecting the impact of the debt raised to fund the Wolf-Brink acquisition along with the interest rate hikes in
2023.
Therefore, operations generated € 253.6 million in Profit Before Tax, 8.2% as a percentage of net revenue, compared to
€ 179.8 million and 7.6% in 2022.
Group Net profit
reached € 191.2 million compared to € 140.3 million in 2022.
Group Net profit adjusted
for the period amounted to € 211.8 million, 6.9% as a percentage of net revenue, compared
to € 162.9 million, 6.8% of net revenue, in 2022.
4.9.3
Condensed statement of financial position
The table below shows the financial position in a condensed and reclassified format, highlighting the structure of net
capital employed and financing sources.
2023
2022
Total
change
%
of
which
organic
%
of which
perimeter
%
of which
exchange rates
and
hyperinflation
%
Financial Position
(in € million)
Trade receivables
365.9
17.6%
308.4
33.8%
57.5
18.6%
5.9
1.9%
52.1
16.9%
-0.5
-0.2%
Inventories
619.0
29.8%
476.8
52.2%
142.2
29.8%
23.5
4.9%
123.5
25.9%
-4.7
-1.0%
Trade payables
-523.9
-25.2%
-494.4
-54.1%
-29.5
6.0%
62.0
-12.5%
-95.9
19.4%
4.4
-0.9%
Net operating working capital
1
461.0
22.2%
290.8
31.8%
170.2
58.5%
91.4
31.4%
79.7
27.4%
-0.9
-0.3%
% on Net revenue
14.9%
12.2%
Net fixed assets
2,131.8
102.6%
847.8
92.8%
1,284.0
151.5%
49.5
5.8%
1,230.8
145.2%
3.7
0.4%
Other non-current assets and liabilities
-265.4
-12.8%
-55.2
-6.0%
-210.2
380.8%
-17.3
31.4%
-192.2
348.2%
-0.7
1.3%
Other current assets and liabilities
-249.9
-12.0%
-170.1
-18.6%
-79.8
46.9%
29.4
-17.3%
-106.7
62.7%
-2.5
1.5%
Net capital employed
2,077.5
100.0%
913.3
100.0%
1,164.2
127.5%
152.9
16.7%
1,011.7
110.8%
-0.4
-0.0%
Net financial indebtedness adjusted
575.0
27.7%
-98.9
-10.8%
673.9
-681.4%
132.8
-134.2%
534.8
-540.7%
6.4
-6.4%
Net equity
1,502.5
72.3%
1,012.2
110.8%
490.3
48.4%
20.1
2.0%
477.0
47.1%
-6.7
-0.7%
of which attributable to non-controlling
interests
-0.1
0.0%
-2.2
0.2%
-2.4
ns
-2.3
-98.8%
0.0
0.0%
-0.1
-5.7%
Total financing sources
2,077.5
100.0%
913.3
100.0%
1,164.2
127.5%
152.9
16.7%
1,011.7
110.8%
-0.4
-0.0%
1
refer to paragraph 4.11 for the reconciliation of the APM
Financial Position Ratios
2023
2022
DSO (Days Sales Outstanding - going back)
43.5
44.8
DPO (Days Payables Outstanding - going back)
91.0
97.6
In 2023, the Ariston Group reported € 2,077.5 million in
Net capital employed,
up from € 913.3 million in December 2022.
27
Net operating working capital
significantly increased in both absolute and percentage terms compared to December
2022. The increase was caused by the perimeter variation linked to the Wolf-Brink acquisition and an increase in inven-
tories. The increase in heating finished products associated with the slowdown in demand in some important markets
represented the primary cause of the higher inventory level and the lower amount of payables in the legacy perimeter.
The DSO improvement and decrease in DPO are mainly due to the Wolf-Brink business.
Net financial indebtedness adjusted
amounted to € 575.0 million as of December 2023 and the increase compared to the
previous year was due to the cash-out for the acquisition of Wolf-Brink.
Net fixed assets
amounted to € 2,131.8 million, up from € 847.8 million in December 2022. Fixed asset investments,
excluding the perimeter variation of Wolf-Brink, increased by 38% compared to the previous year. The biggest driver of
the growth was the perimeter variation of € 1,230.8 million related to the Wolf-Brink business combination.
Other non-current assets and liabilities
totalled € 265.4 million, compared to € 55.2 million in December 2022, up € 210.2
million compared with the previous year. The significant variation ensues mainly from: a) the recognition of deferred tax
liabilities in the purchase price allocation performed for the Wolf-Brink business combination totalling € 148.4 million and
b) from the perimeter variation and change in the financial assumptions for Defined Benefit Obligations under IAS 19 for
€ 48.6 million.
Other current assets and liabilities
totalled € 249.9 million, compared to € 170.1 million in December 2022, up € 79.8
million compared with the previous year. The change was caused by a series of factors such as a net increase in VAT
receivables (€ 18.8 million), net tax liabilities (€ 11.7 million), employees’ debt (€ 22.2 million), contract liabilities and
other deferred income for € 28.5 million, including € 17.4 million for perimeter variation.
Net equity
amounted to € 1,502.5 million, compared to € 1,012.2 million in the previous year. The overall € 490.3 million
increase was due to the Net profit in 2023 of € 191.2 million, € 398.6 million for the capital increase linked to the business
acquisition of Wolf-Brink and an impact of € 5.4 million for the expense of LTI plans for 2023. The increase was offset by
€ 24.4 million of the cash flow hedge reserve, € 8.7 million of the variation due to the buyback of treasury shares, € 8.5
million of negative exchange rate effect on the translation of equity, € 5.2 million of the remeasurement reserve decrease
(IAS 19) and € 48.3 million for the dividend pay-out.
Reconciliation between amounts included in the “Condensed statement of financial position” and the “Consolidated state-
ment of financial position”
The items included in the “Condensed statement of financial position” and listed below can serve to facilitate comparison
with groups operating in the same sector and are defined as the algebraic sum of specific items contained in the financial
statements:
Net fixed assets
, calculated as the algebraic sum of:
•
goodwill;
•
intangible assets with a finite life;
•
trademarks;
•
right-of-use assets;
•
property, plant and equipment.
Other non-current assets and liabilities
, calculated as the algebraic sum of:
•
investments in associates and joint ventures;
•
deferred tax assets;
•
other non-current assets;
•
non-current tax receivables;
•
deferred tax liabilities;
•
non-current provisions for risks and charges;
•
net employee defined benefit liabilities;
•
other non-current liabilities;
•
non-current tax payables.
28
Other current assets and liabilities
, calculated as the algebraic sum of:
•
other current assets;
•
current tax receivables;
•
assets held for sale;
•
current tax payable;
•
current provisions for risks and charges;
•
other current liabilities.
Net capital employed
, calculated as the algebraic sum of the items listed above and in particular:
•
net operating working capital;
•
net fixed assets;
•
other non-current assets and liabilities;
•
other current assets and liabilities.
Net financial indebtedness adjusted
, refer to paragraph 4.11 for the reconciliation of the APM.
4.9.4
Net Operating Working Capital
Net operating working
capital
(in € million)
As at 31
December
2023
As at 31
December
2022
Total Change
of which
organic
of which
perimeter
of which
exchange rates
and
hyperinflation
Trade receivables
365.9
308.4
57.5
5.9
52.1
-0.5
Inventories
619.0
476.8
142.2
23.5
123.5
-4.7
Trade payables
-523.9
-494.4
-29.5
62.0
-95.9
4.4
Net operating working capital
1
461.0
290.8
170.2
91.4
79.7
-0.9
% on Net revenue
14.9%
12.2%
1
refer to paragraph 4.11 for the reconciliation of the APM
Net operating working capital totalled € 461.0 million, 14.9% as a percentage of net revenue, compared to € 290.8 million
and 12.2% at the end of December 2022.
Thanks to the effective management of both trade receivables and trade payables, working capital remained at a sound
level, in percentage terms, even during a period of strong demand fluctuation from end customers.
Trade receivables totalled € 365.9 million and 11.8% as a percentage of net revenue, compared to € 308.4 million and
13.0% in December 2022, with Days Sales Outstanding at 43.5 and 44.8 days respectively.
Inventories amounted to € 619.0 million and 20.0% as a percentage of net revenue, unchanged compared to the previous
year. The Group launched initiatives, especially towards the end of the year, to reduce planned stockpiling to support
customer demand.
Trade payables increased to € 523.9 million, 16.9% as a percentage of net revenue, compared to € 494.4 million and
20.8% in December 2022. Days Payable Outstanding saw a decrease, down to 91.0 from 97.6 days in December 2022.
The decrease was due to the perimeter variation of Wolf-Brink. With an unchanged perimeter at December 2023 com-
pared to December 2022, DPO remains almost stable, up to 98.6 from 97.6. The Ariston Group is committed to careful
management of procurement contracts and relevant terms and conditions.
Organic growth totalled € 91.4 million, the perimeter variation following the business combination with Wolf-Brink
amounted to € 79.7 million, while the exchange rate effect was negative for € 0.9 million.
4.9.5
Reclassified statement of Cash flows
The table below shows a simplified and reclassified version of the cash flow statement in the consolidated financial state-
ments.
The main reclassification consists in the representation of the change in Net Financial Indebtedness adjusted at the end
of the period as the result of the total net cash flow generated (or absorbed). Therefore, the cash flows relate to changes
in Operating, Investing, and Financing activities, both current and non-current.
CASH FLOWS
2023
2022
(in € million)
Net Financial Indebtedness adjusted at the beginning of the period
98.9
184.8
EBITDA
417.1
283.5
Taxes paid
-74.0
-35.4
Provisions and other changes from operating activities
24.3
-1.4
Changes in net operating working capital
-63.8
-115.8
Cash flows from Operating activities
303.5
130.9
Capital expenditure
-158.7
-78.6
IFRS 16 leasing payment
-32.7
-23.1
Other changes
-0.6
2.4
Free Cash flow
111.6
31.7
Cash flows from Financial investments activities
-651.3
-77.2
Cash flows from Other activities
-77.5
-69.5
Total Net Cash flow
-617.2
-115.0
Non-cash items
-56.7
29.1
Net financial position at the end of the period (*)
-575.0
98.9
* Positive figures represent net cash.
Net cash flow
reflected a cash flow absorption of € -617.2 million, down on € 502.2 million in the same period of the
previous year.
The acquisition of Wolf-Brink impacted the Financial investment activities in the reporting period.
EBITDA
growth in the reporting period compared with the previous period was the primary positive driver of cash gener-
ation.
The rise in taxes paid to € 38.6 million was in line with the business's year-on-year growth and was influenced by an
advance tax payment recovery of € 4.9 million, which had a beneficial effect on 2022.
Provisions and other changes from operating activities resulted in cash generation of € 24.3 million mainly driven by the
positive impact of employees’ liabilities and the positive effect of customers’ advances and deferred income expenses.
Net operating working capital recorded a cash absorption of € 63.8 million net of a positive effect of € 26.9 million from
the Wolf-Brink business acquisition. Refer to paragraph 4.9.4 Net Operating Working Capital for more details.
Free Cash flow
improvement was driven by EBITDA growth, partially offset by the cash flow absorption related to changes
in net operating working capital and an addition of € 158.7 million in capital expenditure.
Financial investments activities included the cash outflow for the business acquisition. The delta between 2023 and 2022
on financial investments activities was due to the acquisition of Wolf-Brink.
Other activities included € -48.3 million in dividends, € -8.7 million for the buyback of treasury shares, € 0.7 million in
divestments, € 0.6 million related to the Italian ‘Ecobonus’ programme and € -21.8 million in financial and exchange
charges absorbed.
Non-cash items
include non-cash components with no impact on the Net Cash flows such as MTM and IFRS16 variation
and the exchange rate effect on Net Financial Indebtedness.
4.9.6
Net financial indebtedness
The main differences between
Net Financial Indebtedness adjusted
and
Net Financial Indebtedness
imply the inclusion
of the financial liabilities of the Put and Call option under gross debt and the exclusion of positive Mark To Market deriv-
atives and escrow accounts from Financial Assets under
Net Financial Indebtedness
.
2023
2022
Net Financial Indebtedness
(in € million)
A
Cash
451.2
999.2
B
Cash equivalents including the current financial assets
0.0
0.1
C
Other current financial assets
10.1
12.3
D
Liquidity (A+B+C)
461.3
1,011.6
E
Current financial liabilities
-75.7
-53.5
F
Current portion of non-current financial liabilities
-46.7
-32.7
G
Current Financial Indebtedness (E+F)
-122.5
-86.2
H
Net Current Financial Indebtedness (G-D)
338.9
925.4
I
Non-current financial liabilities
-942.1
-865.2
J
Non-current financing (Debt instruments)
0.0
0.0
K
Non-current Trade and Other Payables
-7.7
0.0
L
Non-Current Financial Indebtedness (I+J+K)
-949.8
-865.2
M
Net Financial Indebtedness (H+L) (*)
-610.9
60.2
2023
2022
Reconciliation Net Financial Indebtedness (€ million)
Net Financial Indebtedness
-610.9
60.2
Put and Call liability
10.9
3.8
Escrow
7.9
0.0
Positive MTM
17.1
34.8
Net Financial Indebtedness adjusted (*)
-575.0
98.9
* Positive figures represent net cash.
Net Financial Indebtedness adjusted
(including lease liabilities) corresponded to a net cash position of € -575.0 million,
compared to the € 98.9 million net cash at 31 December 2022.
As of 31 December 2023, liquidity amounted to € 451.2 million excluding back-up credit facilities. Ariston has an unused
committed revolving credit facility totalling € 895 million.
During 2023, the Group contracted new debt facilities: (a) one medium/long-term syndicated line with major interna-
tional financial players and (b) one Schuldschein Agreement.
At 31 December 2023, long-term debt amounted to € 902 million, with an average maturity of over 4.5 years. 64% of
debt is fixed or hedged and 36% is at a variable rate.
Short-term debt due to banks at the end of 2023 amounted to € 17.1 million. The used and unused credit lines (both
committed and uncommitted) totalled approximately € 2.2 billion, of which 43% had been drawn.
4.9.7
Capital Expenditures
In 2023, the Ariston Group’s capital expenditure totalled € 158.7 million, 5.1% as a percentage of net revenue, compared
with € 78.6 million in 2022, with an increase year-on-year, on the same perimeter, of 41.7%.
Investments include:
•
Investments in physical assets and new products.
The main projects during the year were related to the new footprints: in the Cerreto site for the final phase of top
of the range electric water heater production lines; the new Fabriano plant purchasing and the first step for a new
plant for cylinder production. Furthermore, the Group continued to invest in renovation and safety upgrades of
plants at various sites in order to improve their efficiency (Genga, Cerreto, Osimo, Chartres, Centurion, Arcevia,
Resana, Namur); rationalisation of the footprint (Wuxi); and the increase in production capacity to meet growing
market demand (Albacina and Mainburg). The Group made investments in new products in the field of large-scale
domestic water heating (Quadris), new slim platforms (Hanoi) and new heat-pump water heaters for Australia. On
the heating business, the Group continued to invest in various laboratories dedicated to heating heat pumps to
equip them with state-of-the-art equipment for product testing to improve quality tests and heating system simu-
lation (Albacina, Osimo, Cambiago). Finally, a significant part of spending was dedicated to customer-oriented initi-
atives (new visitor centre in Mainburg, training rooms, office renovation) and direct service equipment.
•
R&D investments.
The Group capitalised water heating projects related to the development of new products: and new heat-pump
water heaters for Australia, and new products in the field of large-scale domestic water heating for European mar-
kets. In environmental heating, the capitalised R&D costs related to both mainstream and top of the range HHP
projects using the latest generation of refrigerant gas.
•
Digital investments.
During 2023, the Group continued to work on new evolved systems for Finance, product life cycle management,
and digital management of the supply chain. In the commercial area, the adoption of Group systems in the customer
relations and installer management areas was progressively extended to new countries and continuously developed
to meet counterparts’ expectations.
Finally, the Group invested in cyber security and disaster recovery.
Lastly, investments for the right-of-use of third-party assets were related to tangible assets at 31 December 2023. The
yearly addition totalled € 37.6 million and was attributable to offices, buildings, plants and machinery, and vehicles, com-
pared to € 22.5 million in 2022.
4.9.8
Company and Group net profit and net equity
Regarding information on the Company Ariston Holding N.V.’s and the Group’s net profit and net equity, prepared in
accordance with Part 9 of Book 2 of the Dutch Civil Code and the International Financial Reporting Standards issued by
the International Accounting Standards Board (‘IASB’) and endorsed by the European Union (‘IFRS-EU’), please refer to
the paragraph ‘Equity’ in the company’s financial statements at 31 December 2023.
4.10
Full year 2023 conclusion and outlook
2023 was another year of robust growth for the Ariston Group, which reported revenues exceeding € 3 billion, increasing
by 30% year-on-year and factoring in the acquisitions of Wolf and Brink. While the global geopolitical situation continued
to trigger
a series of disruptive events, the Group delivered a solid performance across all major target regions and busi-
ness segments, with a special mention going to renewable heating solutions in Europe, also thanks to the resilience of
our supply chain, planning, and manufacturing base.
2023 marked a fundamental milestone in respect to the Ariston Group’s future development: the acquisition of the Wolf-
Brink business (formerly called CENTROTEC Climate Systems) - the Group’s biggest ever deal, announced in September
2022 and finalised in January 2023 - was a significant step in the Group’s sustainable heating, also increasing its ESG focus
and consolidating its positioning in Europe.
Leveraging its global scale, its extensive portfolio of brands, solutions and services, its strong access to technology as well
as its firm focus on sustainability - further enhanced by the acquisition – the Ariston Group is in the best condition to
continue to be among the leading players in the thermal comfort industry: a sector undergoing a deep transformation,
which is expected to benefit from the ongoing energy transition process and the emissions reduction that Europe is tar-
geting.
Hence, looking ahead, Ariston Group remains confident about both long-term demand trends in the industry, fuelled by
the sustainability imperative, and its key distinctive competitive features.
Heat pumps are confirmed as the leading technology for the future, especially in those markets where the Ariston Group
can count on a significant presence. In parallel, although electrification remains the focus, the Ariston Group will continue
to pursue a multi-energy approach, to effectively tackle the sustainability challenge by leveraging different innovative
technologies such as hydrogen, hybrid solutions, thermally-driven heat pumps and demand response, to favour energy
efficiency and accelerate the energy transition by intercepting all building stock needs.
In addition to its excellent solutions for thermal comfort, the Ariston Group’s growth will also be sustained by its industrial
back-end, which through a robust international manufacturing footprint has been able to ensure supply chain flexibility
and customer proximity, and its local-go-to-market approach.
Finally, the integration of the Wolf-Brink business proceeds, the Ariston Group will progressively benefit from the poten-
tial inherent in the quality and complementarity of the brand and product portfolios; from the organisational, technical,
technological and human resources made available to the Group; as well as from the reinforced positioning of the Group
in Central Europe.
4.11
Definition and reconciliation of the Alternative Performance Measures (APMs or
non-GAAP measures) to GAAP measures
In addition to the standard financial reporting formats and indicators required under the IFRS, this document contains
certain financial performance measures that are not defined in IFRS standards (non-GAAP measures).
The Group believes that these non-GAAP financial measures enhance the capacity to evaluate its financial performance
and financial position and give management and investors pertinent and helpful information about performance. They
also give Group comparative metrics that help management recognise operational patterns and decide how best to allo-
cate resources going forward and for other operational decisions. The financial measures the Group uses may not be
comparable to other similarly titled measures used by other companies, even though they are widely used in the industry
in which the Group operates. They are also not meant to be a replacement for measures of financial performance or
financial position as prepared in accordance with IFRS.
Financial measures used to measure Group operating performance
The Alternative Performance Measures used by the Group are the following:
•
EBIT (Operating profit) adjusted: the operating result for the period net of the adjustment on operating income
(expense)
•
EBITDA: EBIT (operating profit) before depreciation and amortisation of intangible and tangible fixed assets and
leased assets.
•
EBITDA adjusted: EBITDA as defined below, net of the adjustment on operating income (expense), less the amorti-
sation of purchase price allocation from Merger & Acquisition activity.
•
Group net profit adjusted: the result for the period attributable to the Group before adjustment on operating in-
come (expense), before the relevant taxation effect and before other positive/negative tax adjustments for the
period.
The adjustments impacting the APMs reported above relate to certain transactions or events identified by the Group
as adjustment components for the operating result, such as:
•
capital gains (losses) on the disposal of businesses/buildings;
•
impairment on tangible and intangible assets;
•
strategic multi-year restructuring and reorganisation programme costs;
•
ancillary expenses associated with acquisitions/disposals of businesses/buildings or companies;
•
P&L impact of purchase price allocation from Merger & Acquisition activity (such as amortisation);
•
tax adjustments: the tax effects of transactions or events identified by the Group as components adjusting the
taxation for the period related to events covering a single period or financial year, such as:
•
tax effects of Adjustment on operating income (expense) positive/negative taxation effects associated with
the adjustment on operating income (expense);
•
reversal of non-recurring taxation effect non-recurring positive/(negative) taxation effects.
For a detailed reconciliation of the items that had an impact on the alternative performance measures referred to above
in the current and comparison years, see the appendix at the end of this section.
•
Net operating working capital, calculated as the algebraic sum of:
•
trade receivables, which includes supplier debit balances;
•
inventories;
•
trade payables, which includes customer credit balances.
For a detailed reconciliation of the net operating working capital, see the appendix at the end of this section.
34
•
Net Financial Indebtedness adjusted: calculated as the algebraic sum of:
•
Net Financial Indebtedness ;
•
Put and call liability;
•
Escrow accounts;
•
Positive Mark to Market.
Full reconciliation with Net Financial Indebtedness is provided in paragraph 4.9.6.
•
Days Sales Outstanding: Trade receivables net of advances going back to absorb gross revenue without VAT.
Refer to paragraph 4.9.3 for further information.
•
Days Payables Outstanding: Costs and capital expenditure (Capex) going back to cover accounts payable.
Refer to paragraph 4.9.3 for further information.
•
Free cash flow: cash flow that measures the Group’s self-financing capacity on the basis of cash flows from Operating
activities, capital expenditure, IFRS16 lease payments, and other changes.
Refer to paragraph 4.9.5 for reconciliation and further information.
•
Organic change: calculated by excluding both the impact of currency movement against the euro (expressed at
monthly average exchange rates for the same period in the previous year) and the effects of business acquisitions
and disposals.
In order to mitigate the effect of hyperinflationary economies, organic change for countries having to adopt the
hyperinflationary methodology laid down in IFRS only includes the component attributable to volumes sold in rela-
tion to net sales, while the effects associated with hyperinflation, including price index variation and price increases,
are treated as exchange rate effects.
Specifically:
•
the exchange rate effects are calculated by converting the figures for the current period at the exchange rates
applicable in the comparative period of the previous year. The exchange rate includes the effects associated
with hyperinflationary economies;
•
the results attributable to businesses acquired during the current year are excluded from organic change for 12
months from the date on which the transaction is closed;
•
the results attributable to businesses acquired during the previous year are included in full in the figures for the
previous year as from the closing date of the transaction, and are only included in the current period’s organic
change 12 months after their conclusion;
•
the results from business disposals during the previous year are wholly excluded from the figures for that year
and, therefore, from organic change;
•
the results from business disposals during the current year are excluded from the figures for the previous year
from their corresponding date of disposal or termination.
The percentage organic change is the ratio of the absolute value of the organic change, calculated as described
above, to the absolute value of the measure in question for the previous period under comparison.
Refer to paragraphs 4.9.2 and 4.9.3 for further information.
35
Appendix of Alternative Performance Measures
In 2023, EBITDA, operating profit (EBIT), and Group Net profit were adjusted to take into account the items shown in the
table below.
2023
2022
A
EBIT (Operating profit)
285.7
193.7
B
Adjustment on operating income (expense) on EBIT
-28.5
-28.9
C
EBIT (Operating profit) adjusted (A-B)
314.2
222.6
D
Depreciation and amortisation
131.4
89.8
E
EBITDA (A+D)
417.1
283.5
F
Adjustment on operating income (expense) on EBITDA
-5.1
-21.8
G
EBITDA adjusted (E-F)
422.2
305.3
H
Financial income/(expenses)
-30.8
-18.6
I
Profit/(loss) on investments
-1.3
4.7
J
Taxes
-62.4
-39.5
K
Net profit attributable to non-controlling Interests
0.0
0.1
L
Group Net profit (A+H+I+J+K)
191.2
140.3
M
Tax adjustments
-7.8
-6.3
N
Group Net profit adjusted (L+M-B)
211.8
162.9
The adjustments are summarised in the table below:
For the Year ended 31 December 2023
EBITDA
EBIT
Group Net profit
€ mil-
lion
€ million
€ million
GAAP measures (EBIT and Group Net profit) / APM (EBITDA)
417.1
285.7
191.2
Capital gains (losses) on the disposal of business/building
0.4
0.4
0.4
Strategic multi-year restructuring and reorganisation programme costs
5.4
5.4
5.4
Ancillary expenses associated with acquisitions/disposals of business/building or
companies
3.1
3.1
3.1
Impairment loss on goodwill, trademark and on tangible assets
1.1
1.1
1.1
Flash flood costs net of insurance reimbursement
-7.9
-7.9
-7.9
P&L impact of purchase price allocation from Merger & Acquisition activity (such
as amortisation)
3.0
26.4
26.4
Tax adjustments (i.e. tax impact on the above adjustments)
-
-
-7.8
Total adjustments
5.1
28.5
20.7
Alternative Performance Measure adjusted
422.2
314.2
211.8
For the Year ended 31 December 2022
EBITDA
EBIT
Group Net profit
€million
€ million
€ million
GAAP measures (EBIT and Group Net profit) / APM (EBITDA)
283.5
193.7
140.3
Capital gains (losses) on the disposal of business/building
-0.6
-0.6
-0.6
Strategic multi-year restructuring and reorganisation programme costs
6.9
6.9
6.9
Ancillary expenses associated with acquisitions/disposals of business/building or
companies
0.3
0.3
0.3
Ukraine & Russia conflict/others
4.4
4.4
4.4
Flash flood costs net of insurance reimbursement
10.8
10.8
10.8
P&L impact of purchase price allocation from Merger & Acquisition activity
(such as amortisation)
-
7.1
7.1
Tax adjustments (i.e. tax impact on the above adjustments)
-
-
-6.3
Total adjustments
21.8
28.9
22.6
Alternative Performance Measure adjusted
305.3
222.6
162.9
36
The reconciliation of the net operating working capital is summarised in the table below:
2023
2022
Trade receivables as reported
361.3
308.4
Supplier debit balances*
4.6
-
Trade receivables in the Net operating working capital
365.9
308.4
Trade payables as reported
(463.7)
(481.4)
Customer credit balances**
(60.2)
(13.1)
Trade payables in the Net operating working capital
(523.9)
(494.4)
Inventories
619.0
476.8
Net operating working capital
461.0
290.8
*
Supplier debit balances are included in ‘Other current assets’ within the Consolidated statement of financial position
**
Customer
credit balances are included in ‘Other current liabilities’ within the Consolidated statement of financial position
4.12
Investor information
The Ariston Group has been listed on Euronext Milan, the Italian stock exchange, since 26 November 2021 with ticker
symbol ARIS. Pursuant to applicable EU regulations, the Group’s home member state is the Netherlands.
Therefore, regulated information is stored using the “1info SDIR” repository (www.1info.it) authorised by Italy’s market
authority CONSOB, as well as filed with the AFM (Dutch Authority for the Financial Markets).
The Group interacts with the financial community through both one-to-one and group meetings with investors, with the
participation of the Investor Relations function - along with the CEO and top management on select occasions - on digital
platforms and in person.
The year ended with coverage from ten sell-side brokers, compared to eight at the end of 2022.
Dividend
The Board voted to propose a dividend of € 0.17 per share to the general meeting for the year 2023, gross of withholding
taxes, representing a pay-out ratio of 33%.
The dividend will be paid on 22 May 2024 (with an ex-coupon date of 20 May 2024 in accordance with the Italian Stock
Exchange calendar, and a record date of 21 May 2024). The Board resolved to convene the annual general meeting to be
held on 6 May 2024
.
5.
Governance
Effective risk management, integrated into the governance system, is a key factor in protecting the Ariston Group’s value
over time. The Ariston Group’s Internal Control System has therefore been gradually developed, drawing inspiration from,
among other sources, the principles and best practice provisions laid down in the Dutch corporate governance code.
The Dutch corporate governance code was amended on 20 December 2022 and entered into force as for the financial
year beginning on or after 1 January 2023. The most significant amendments to the Dutch corporate governance code
relate to sustainable long-term value creation, the role of stakeholders and diversity and inclusion. Dutch companies
whose shares are admitted to trading on an EU regulated market, such as Ariston Holding N.V., had to amend their exist-
ing policies and procedures by the end of the financial year 2023. The Board updated the Board rules and several policies
in November 2023 in accordance with the new Dutch corporate governance code.
5.1
Risk management
5.1.1
Risk management framework
The Group, in compliance with the provisions of the Dutch corporate governance code and as per international best
practices on internal risk management and control systems, adopts a Risk Management process aimed to assess, manage
and monitor the risks that could affect the business and its operations.
The Group’s Enterprise Risk Management (ERM) has been structured by taking the COSO ERM Framework (Committee
of Sponsoring Organisations of the Treadway Commission) as a reference to build up the ERM Methodology and the
related risk catalogue.
In accordance with ERM methodology, the risk events that could affect the achievement of the Group’s strategic objec-
tives are assessed in terms of the likelihood of their occurrence and their economic impact.
The risks are evaluated in terms of both "inherent risk", representing the risk in the absence of any intervention, and
"residual risk", which considers the effectiveness of implemented mitigation actions.
Management is responsible for identifying the risks and defining and implementing appropriate mitigation action plans
aimed at reducing the likelihood/impact of the risks faced by the Group, according to its risk appetite.
In order to ensure the adequacy of the risk management and internal control system, the Group has adopted the Internal
Control System Framework composed of Three Levels of Defence, establishing clear roles and responsibilities for the
different functions involved:
•
First Line of Defence – Risk & control owners
: responsible for achieving the business goals, embedding risk manage-
ment and the internal control system into operational processes. Risk and control owners have the responsibility and
accountability to identify, manage and monitor risks and opportunities, defining and implementing mitigation actions,
working independently or with the support of the second line of defence functions;
•
Second Line of Defence – Risk & control support:
composed of functions that support and oversee the activities of
the first line, providing systems, methods, tools and specialised information in order to increase risk awareness and
its deployment across the entire organisation;
•
Third Line of Defence – Risk & control independent assurance:
composed of the Internal Audit Department that ensures
the monitoring and evaluation of the effectiveness and efficiency of the Internal Control and Risk Management Sys-
tem. Characterised by clear independence from the business and a high degree of autonomy, reporting directly to the
Executive Chair of the Board and to the audit committee (composed of three independent non-executive directors).
Risk Transfer
39
As part of the Group’s risk management approach, in order to minimise the uncertainty and the potential impacts deriving
from specific risk events, the Group has decided to transfer, where feasible, the residual risk exposure to the insurance
market. The Group has defined the insurance strategy based on its risk appetite, effectively balancing the risk coverage
and the related insurance costs. The Group’s insurance management is supported by a specialised broker with a network
operating on an international scale. Through the Global Policies, every Group company is currently covered against the
following key risks: all material damages and business interruption; public and product liability; marine cargo; directors’
and officers’ liability.
Continuous improvements in the Ariston Group’s Risk Management System
The Group promotes the continuous improvement of the risk management system according to the evolution of strate-
gies and changes that have occurred with the main risks and uncertainties. As we continue to evolve our Group ERM
system, we are committed to identifying the best practices and to refining our methodologies and processes.
5.1.2
Risk appetite
The
Group Risk Appetite
, defined as the level of risk that the Group is willing to accept to achieve its objectives, is applied
to business objectives, the Code of Ethics, corporate values, policies and applicable laws and regulations. As represented
in the table below, the risk management and internal control system is composed of different risk categories, each with
its specific risk appetite:
Risk Category
Category Description
Risk Appetite
Strategic
Risk related to the Group’s business strategy
that could affect its long-term positioning and
performance.
The Group is willing to accept risks in a responsible
way, in order to achieve its strategic objectives,
taking into consideration stakeholders’ interests.
Operational
Risk that may affect internal processes, people,
systems and/or external resources that influence
the Group’s ability to pursue its strategy.
The Group works on mitigating operational risks by
implementing standardised quality procedures and
controls that extend to suppliers, production line
performance and management of business conti-
nuity. Furthermore, suppliers are carefully selected
and alternative sources are monitored.
Compliance
Risk of non-compliance with laws, regulations,
local standards, the Code of Ethics, and internal
policies and procedures.
The Group and our employees believe in acting
with honesty, integrity and respect, including com-
pliance with our Code of Ethics as well as with the
laws and regulations applicable wherever we oper-
ate.
Financial
Risk relating to uncertainty of returns and poten-
tial financial losses due to financial performance.
The Group has a cautious approach to financial
risks. Through debt capital market transactions,
cash balances and bank credit line agreements, the
Group tries to maintain a debt/capital structure
profile that allows investing in long-term objectives
and rewarding stakeholders.
5.1.3
Main risks and uncertainties to which the Group is exposed
The main risks and uncertainties to which the Group is exposed are reported below, classified according to the identified
categories. The ERM model integrates Environmental, Social and Governance (ESG) risks, improving the organisation’s
challenges related to environmental impact, social responsibility, and governance practices.
As the Ariston Group, we face a variety of risks in our business. The risks and uncertainties described are not the only
ones that we are exposed to. Additional risks and uncertainties that we are unaware of might also become important
factors that affect us.
a)
Strategic risks
40
The Group is exposed to changes in markets, end-user demand and preferences and the Group’s success depends on its
ability to develop and maintain product offerings that keep pace with these trends.
The markets in which the Group competes are characterised by frequent new product launches and enhancements,
shifting end-user preferences and demand, as well as changing industry standards, public incentives and regulatory re-
quirements. The Group's future success will depend on its ability to consistently address changes in end-user demand
and develop product offerings that meet evolving customer preferences.
The Group is exposed to the risk of losing market share and revenues in a situation where the changes in end-user pref-
erences and demand are faster than the Group’s ability to adapt its product offerings. Furthermore, the Group faces the
risk of a sudden increase or decrease in demand, also due to local public incentives, causing the Company to have either
insufficient or excessive inventory levels, or an inadequate mix of available products.
In addition, the Group is exposed to aggressive competition in the Asiatic market where multi-category big players are
fast at developing new products and invest significantly in marketing activities and digital campaigns.
The Group's mitigation actions are focused on evolving its product portfolio, offering innovative solutions both with re-
gard to digitalisation and the sustainability of technologies. Furthermore, the Group listens to customers, technicians and
end users in order to meet their needs and market demand.
Additionally, the Group is engaged in reinforcing brand awareness, increasing the quantity and quality of marketing in-
vestments.
The Group is exposed to social and geopolitical instability in the countries where it operates.
The Group's growth strategy focusses on a continuous expansion within the Group's existing geographical areas, as well
as entering new markets. The Group operates in emerging markets and in some countries where the political situation,
geopolitical instability and corruption are higher than in other geographies.
The ongoing Russia-Ukraine conflict continues to generate volatility and uncertainty, alongside the risks of increasing
import/export restrictions or business bans.
The conflict between Israel and Palestine that started in late 2023 and the expansion of the Middle East conflict forced
cargo ships to circumnavigate Africa instead of passing through the Suez Canal.
As the Group operates in Israel with industrial operations, sales and aftersales, the impact of this conflict could generate
a slowdown of business in this area. In addition, the Suez Canal crisis is generating impacts on logistic costs and time of
delivery of goods imported/exported from/to Asia.
The Group's success as a multinational business depends upon its ability to anticipate and effectively manage political,
social and economic conditions and developments. The Group's mitigation actions are mainly focused on continuously
monitoring the social and geographical environments in which it operates, in order to anticipate and minimise vulnera-
bilities, adopting prudent measures and enhancing the possibility to shift production to different locations.
Moreover, specific measures are in place to adjust inventory levels in countries where the geopolitical phenomena are
uncertain and to adapt the MRP (Material Replenishment Planning), for example anticipating orders for those countries
affected by the crisis.
The Group has maintained a neutral position regarding the Ukraine-Russia conflict, focusing on managing current busi-
ness in compliance with business bans, international laws and regulations. In line with the Group’s values, the Group is
committed to safeguarding its employees and their workplaces. Sustenance and support have been provided to the
Group’s employees and their families in Ukraine, such as emergency help, transportation and pick-ups, accommodation,
and economic support. Operations in both local markets have been maintained, nonetheless the Group has limited its
exposure, reducing investments.
The Group faces the risk of non-compliance with environmental laws and regulations and its success partially depends on
the ongoing market trend towards increased sustainability and government incentives.
The Group acknowledges the impact that its operations and its supply chain could generate on the environment and the
need to address climate change. Therefore, it has strong ambitions and is continuing to invest to optimise the energy
efficiency of its operations and products, focussing on electrification and renewable sourcing. As part of this strategy,
critical suppliers have been engaged to contribute to sustainable development.
Furthermore, the Group is committed to improving the environmental impact of thermal comfort solutions, by selling
innovative and more sustainable products.
41
The risks are related to current and expected trends that could change due to several factors that are outside the Group's
control, including the modification or elimination of customer incentives or the regulations imposed, encompassing en-
vironmental protection, materials traceability, waste management and the promotion of a circular economy.
Adherence to these regulations may lead to increased costs associated with product innovation, new technology devel-
opments, liabilities, including fines and/or remediation obligations. Such implications have the potential to affect the
Group's business, financial condition and/or results.
Starting from 2018, the Ariston Group has set the pathway and targets to fully incorporate sustainability into its strategy,
including establishing a sustainability governance framework. Indeed, the Group's risk mitigation efforts are primarily
focussed on monitoring regulatory changes to anticipate future trends. In addition, increased efforts and commitment
are in place to maintain compliance with laws and regulations as well as to reduce the environmental impact that may be
caused by the Group’s activities. A decarbonisation strategy and a monitoring system have been defined to reduce direct
and indirect emissions in light of carbon neutrality and energy efficiency as international and national goals. To achieve
these objectives the Group is investing in R&D, production capacity and the necessary skills and resources needed to
contribute to the transition, which will lead to a significant avoidance of CO2 emissions.
Furthermore, the Group has developed a product lifecycle management strategy to address the need to guarantee best
practice throughout the whole product life cycle, managing a product's entire journey, from initial ideation and develop-
ment to service and disposal.
The Group is exposed to risks relating to acquisitions, integration and divestments.
The expansion strategy of the Group includes achieving growth through acquisitions to strengthen the Group’s vision,
competitive standing and role in the sector. However, there is the risk that the Group may not be able to successfully
realise strategic acquisitions, for example due to competition from other potential buyers or difficulties experienced in
executing such acquisitions. This could result also from challenges in obtaining necessary regulatory approvals or other
factors, such as actual or potential legal disputes or political resistance.
Engaging in growth through acquisitions also exposes the Group to the risk of encountering challenges in effectively in-
tegrating newly acquired businesses. Moreover, there is the risk of losing key managerial positions, which could have
significant implications for the continuity of operations and the realisation of the expected synergies.
The current landscape shows increasingly concentrated businesses and frequent mergers and acquisitions. Consequently,
the Group might need to seek bank loans or financing, potentially facing higher interest rates that could have impacts on
the financial position.
The Group's mitigation actions are mainly focused on strengthening its acquisition strategy and M&A roadmap. The Com-
pany has set up strict strategic and financial criteria for acquiring new businesses. Moreover, the Ariston Group’s invest-
ment decisions are selective and focussed on businesses with a proven track record. In addition, accurate analysis is
carried out to understand risks and potential synergies. The Company conducts broad-based due diligence of acquisitions
with a clear understanding of SWOT analysis and red flags of target companies, using internal expertise and top external
due diligence and legal professionals. For the post-merger and integration phases, the Company defines dedicated teams
and change management project offices aimed at aligning strategies, balancing business culture with processes to secure
the achievement of objectives and synergies. For the most important acquisitions, retention and development programs
have been set up to safeguard key managerial positions and mitigate the risk of losing key competences.
The Group’s Treasury department, the Chief Financial Officer, the Audit Committee and the Board constantly and peri-
odically monitor the Group’s liquidity, debt, cash flows and net financial position.
b)
Operational risks
Within the category of operational risks, we have incorporated environmental, cybersecurity and health and safety risks.
These risks carry the potential to extend their impact beyond operational aspects, influencing legal and compliance per-
spectives as well. This highlights the interconnected nature of these risks and emphasises the importance of addressing
them comprehensively to ensure mitigation actions covering both operational and legal/compliance aspects.
The Group depends on key raw materials and components to manufacture its products, including some produced by a
limited number of suppliers; any shortages in such materials or components, increases in prices or supplier disruption
would adversely impact the Group's sales and profit margins.
42
The Group is exposed to risks relating to the availability, quality and cost of raw materials, components and specific fin-
ished products. The market prices and availability of materials and utilities, crucial for the Group's operations, can expe-
rience significant fluctuations depending on market conditions, inflation, technological advancements and legislative
changes.
In 2022, prices for components sourced from Asiatic markets increased. Simultaneously, the costs of utilities and fuels
rose, influenced by the Russia-Ukraine conflict, along with elevated costs in raw materials and transportation. Due to this
situation, the market experienced an increase in inflation rates and in 2023, although the purchase prices of several
components decreased, the costs of some raw materials and utilities remained high.
Furthermore, the Group faces risks associated with a potential shortage of suppliers, particularly for certain raw materials
and components sourced from a single provider or a limited number of suppliers. While the Group does not perceive
itself as materially dependent on any single supplier, it has implemented systems to mitigate the impact of supplier dis-
ruptions. The Group has identified secondary sources and established mechanisms of double sourcing without causing
disruptions to its operations. These proactive measures are in place to safeguard against potential challenges in the supply
chain and ensure business continuity.
The Group's other mitigation actions are focussed on monitoring price fluctuations through specific KPIs, revising hedging
policies and implementing energy saving projects at its European plants.
Additionally, the Group has established a bi-monthly steering committee with the CEO to review the main critical issues
and the action plan from both a supply and planning perspective, and a weekly interaction between procurement and
global operations to review each critical issue for each plant.
The Group may be unable to sufficiently protect the health and safety of its employees, in particular those located in its
manufacturing facilities.
Operating in the industrial sector and managing several production plans, employees in the Group may be exposed to
various workplace hazards, including those related to chemicals, ergonomics and physical conditions. These risks may
cause harm or have adverse effects, leading to work-related accidents and illnesses.
Although the Group implements all necessary measures, as required by applicable laws, regulations and industry stand-
ards, to monitor and effectively manage such risks, including systematic assessments aimed at eliminating hazards and
reducing the associated risks, it cannot provide an absolute assurance of complete risk elimination or the absence of
accidents in its facilities.
The occurrence of workplace-related accidents or illnesses could cause interruptions or delays in production, with imme-
diate effects on the site affected, with regard to its ability to supply products, and may expose the related legal entity to
lawsuits, Group reputational damage, and increased costs and liabilities.
The Group's mitigation actions are primarily focussed on reducing the frequency and severity of the accidents and on
conducting activities to enhance control and management of risks, with strict adherence to current legislation. This in-
cludes a specific emphasis on strengthening the Group's Health, Safety and Environment (HSE) Management System in
alignment with ISO requirements. The HSE function has deployed communication methodologies to disclose the HSE
performance indicators. This initiative engages all the levels of the organisation (bottom-up), creating awareness and
commitment to continuous improvement.
At each site where the Group operates, roles and responsibilities have been assigned to corporate and local resources.
The Corporate HSE function oversees and coordinates local resources, by providing policies and guidelines for the proper
management of health, safety and environment, in compliance with global and local regulations. Furthermore, periodical
HSE internal audits and risk assessment are performed to assess compliance, identify remediation actions or improve-
ment opportunities. The HSE department is actively engaged in monitoring laws and regulatory trends in a proactive
manner, enhancing its readiness to react to possible changes.
The Group is subject to the risk of interruption to its production, development processes, supply chain and distribution
network.
The Group is exposed to business interruption risk, which refers to the possibility of experiencing disruption in its opera-
tions, potentially causing a loss of revenues, increased expenses and reputational damage.
The business interruption could be caused by different factors, including natural disasters, fire, seismic events, landslides,
power outages, raw material shortages and cyber-attacks.
43
While natural events can damage physical infrastructure, interrupt supply chains, and force businesses to temporarily
and partially shut down, technological issues could disrupt business operations, compromise sensitive information and
lead to downtime for the necessary system recovery.
Furthermore, if critical suppliers or subcontractors are exposed to significant disruptions in their operations, there is the
risk they could be unable to provide the materials or components the Group needs to keep its operations running and
satisfy customers’ requests.
The Group's mitigation actions are mainly focussed on defining and implementing a Business Continuity Program (BCP)
to map, measure, monitor and verify business risks linked to continuity in operational activities. The Group is working
with the support of a consultancy company, specialised in this specific subject. A Business Continuity Manager has been
formally nominated and the Crisis Management Team Lessons Learnt actively contributes to continuous improvement
across all plants. The first objective of the BCP is to contain the impact through the creation of a set of emergency and
recovery procedures in order to ensure greater standardisation across plants, manage any emergencies, safeguard peo-
ple's health and well-being, minimising the actual or potential consequences of any incident.
Furthermore, the Group is committed to implementing a set of initiatives to prevent business disruption at corporate and
plant level, focusing on: switching production sites or products with similar technical characteristics, internal firewall
installation to reduce malware diffusion and network redundancy, dual sourcing for critical suppliers and implementing
power generators to ensure electricity back-up.
The Group faces the risk related to the inability to attract and retain qualified personnel.
The Group’s success depends on the efforts and abilities of its management team and key employees to achieve the
Group's goals and keep operations running. The Group believes that the growth and success of its business depends on
its ability to attract highly skilled and qualified employees with specialist expertise in the industry.
The profile of technicians is also changing with the transition from fossil energy to renewable energy, together with the
impact of digitalisation, creating a new competence and expertise risk to be mitigated.
The Group's mitigation actions are mainly focussed on strengthening competencies through dedicated training, introduc-
ing specific recruiting programs, and developing employer branding initiatives.
Moreover, training to educate the external service technicians’ network on renewable products/energy has been con-
ducted, and the Group has implemented an e-learning platform.
The Group depends on the efficient and uninterrupted operation of its information and communication technology and its
ability to manage increasing cybersecurity risks successfully.
The Group, in managing the business and the related operations, including manufacturing, relies on computer and data
processing systems and their associated infrastructure.
As for many other multinational companies, IT system architecture is exposed to cyber-security risk. Current cyber at-
tackers are enhancing their effectiveness in executing cyber-attacks by adopting more organised and structured ap-
proaches. A common and damaging form of cyber-attack is through ransomware practices, consisting of locking and
encrypting data, files, or systems and making them inaccessible or unusable until the attacker receives a ransom payment.
Furthermore, external cyber-attackers could target third parties connected to our system, potentially causing impacts on
and breaches of our IT infrastructure.
Failure to secure our IT systems architecture exposes us to the risk of unauthorised access, disruption of the Group's
operations, and potential dissemination of sensitive information and data. The latter scenario could result in potential
consequences regarding compliance with data protection and privacy laws and regulations.
The Group's mitigation efforts are focussed on addressing IT and cybersecurity risks and safeguarding against external
threats through a proactive and reactive approach. Measures are implemented to monitor and analyse machine behav-
iours to actively avoid malicious actions and investigate suspicious ones. Furthermore, existing firewalls are continuously
improved, monitored, and analysed. In addition, countermeasures capable of protecting against non-compliant behav-
iour with the Group’s cybersecurity approach when our workforce is connected outside the Group’s premises are in place.
Periodical training programs are provided to employees, phishing attack simulations are performed and related behaviour
analyses are executed. Additionally, the Group enforces communication security measures, implements procedures to
prevent data loss, and takes other actions, including monitoring externally available information about the company.
Within the wider Business Continuity Plan, a standardised Disaster Recovery approach has been implemented in order to
recover data and infrastructure with predefined procedures and timing. The Disaster Recovery Plan is periodically tested.
44
c)
Compliance Risks
A few risks have the potential to extend their impact beyond operational aspects, influencing legal and compliance per-
spectives as well. Specifically, environmental, cybersecurity and health and safety risks have been described as opera-
tional risks, even though they could generate legal and compliance repercussions.
The Group faces the risk of non-compliance with strict and evolving Laws, Regulations, Industry Standards and Codes.
The Group, operating on a global scale across multiple countries, is subject to stringent and dynamic laws, regulations,
and policies. Substantial alterations or advancements in regulatory requirements have the potential to significantly influ-
ence business operations, leading to adverse effects on both revenues and operating results.
Moreover, the Group may encounter challenges in accurately predicting the costs associated with compliance with legal
requirements. Particularly, the Group may incur substantial expenditure in R&D investments for modifications to existing
products or the development of new ones, as a response to new laws and regulations.
Failure to comply with laws and regulations could result in penalties, fines, potential legal liabilities and reputational
damage.
The Group's mitigation efforts primarily consist of formulating strategies to ensure compliance with evolving regulations,
to enhance testing procedures to ensure products legal compliance and explore the development of innovative solutions.
The company actively monitors the laws and regulatory trends in a proactive manner to boost its readiness to react to
changes. In addition, the Internal Communication Department enhances awareness of the measures adopted by the
company to comply with legislative changes. Furthermore, training on compliance topics, as well as on legal and regula-
tory requirements, is provided to employees in order to align behaviour with current legislation and internal procedures.
The Group is exposed to tax risk and changes in fiscal regulations.
The Group is subject to many different forms of taxation including, but not limited to, corporation tax, withholding tax,
value added tax, property tax, social security and other payroll related taxes, and has obligations to file tax returns and
pay tax across several different jurisdictions.
Significant alterations to tax regulations, in any of the markets where the Group operates, may lead to an increase in tax
rates and/or unforeseen tax exposure, introducing uncertainty that could reduce the net profitability of the Group.
In addition, in other instances there could be the risk of incorrect interpretations that could lead to fines, sanctions,
interests, penalties and liabilities.
Although the Group considers itself in compliance with all relevant obligations, there is a risk that it may unintentionally
fail to comply with applicable laws and regulations. The Group is subject to regular reviews and audits by tax authorities
in jurisdictions around the world. Any adverse outcome could have a negative impact on the Company's effective tax rate,
tax payments, financial position or results of operations. In addition, there are many transactions and calculations, in-
cluding intragroup transactions, where the final tax determination is uncertain.
The Group's primary mitigation efforts are focussed on ensuring compliance with applicable laws and regulations in every
jurisdiction and monitoring tax law trends in a proactive manner in order to boost its readiness to react to changes.
The Board has approved a Group tax strategy, expressing its commitment to comply with the tax laws of any jurisdiction
and to maintain a fair attitude as a taxpayer. In addition, the Group maintains a transparent attitude towards the Tax
Authorities in case of audits or reviews. The Group’s Tax Department is in charge of implementing effective tools for tax
risk management. Furthermore, the Group adopts transfer pricing management, properly allocating the profitability
within the Group companies. All potential risks and opportunities are continuously monitored and carefully dealt with by
tax specialists from the main relevant areas.
d)
Financial risks
Currency exchange rate fluctuations may have a significant impact on the Group's revenues, cash flows and earnings.
The
Group operates in numerous markets worldwide, holding assets, earning revenues, incurring liabilities, and paying
expenses in various currencies besides the euro. The Group’s international operations face the risk of significant fluctua-
tions in exchange rates that could have a negative impact on the Group’s activities and operating results.
45
Furthermore, several of the Group's subsidiaries report their results in currencies other than the euro, requiring the
conversion into euro when preparing the consolidated financial statements. Any increase (or decrease) in the value of
the euro against any foreign currency, serving as the functional currency for any of the Group's operating subsidiaries,
may negatively influence the Group's financials.
The Group's response actions to mitigate the risk are mainly focussed on monitoring foreign exchange exposures and
strengthening hedges. Whenever possible, the company tries to create natural hedges, matching the currency profile of
income and expenses and of assets and liabilities.
The Group faces credit risk concerning its outstanding trade receivables.
The Group may experience low trade receivables turnover and payment delays by certain customers. Payment terms, in
particular due dates for payments by the Group's customers, may vary depending on the type of transaction and business
division. The Group records revenues and the corresponding trade receivables when products are delivered to customers,
and, with respect to certain products, when customer acceptance occurs following delivery. Payments received prior to
product delivery, or customer acceptance, are usually recorded as unearned revenue.
The extended periods of time the Group's trade receivables remain outstanding may negatively affect the Group's cash
flow and liquidity, consequently influencing the Group's business and results of operations.
The Group's mitigation actions are mainly focused on reducing the Group’s exposure by keeping track of actual cash flows
on a short and long-term basis, including regular reviews of liquidity. Furthermore, the dedicated credit department sup-
ports the business by assessing customers’ credit risk profiles and recommending appropriate levels of exposure.
In carrying out its business, the Group is also exposed to liquidity and market risks for commodity prices and interest rates.
In carrying out its business, the Group is exposed to financial risks associated with its operations, liquidity risk and fluctu-
ations in interest rates. The Group manages all risks of this nature through skilled functions and continuous supervision,
regularly mapping and reporting such risks and working with dedicated committees to define appropriate mitigation ac-
tions.
The Group's response actions that have a risk mitigation effect are mainly focussed on constantly monitoring the main
financial risks, in particular managing the level of liquidity to meet the needs for financial obligations and investments.
The Group pays attention to calibrating the debts according to its mid to long-term sustainability. Liquidity is monitored
by the Group’s Treasury department, by the audit committee and by the Board.
5.1.4
Code of Ethics
The Group has adopted a Code of Ethics, representing the values promoted by the Group, setting out obligations and
ethical responsibilities. Adherence to the Code of Ethics is compulsory for Directors, employees of the Company and its
subsidiaries, as well as other individuals or third parties that act in the name and on behalf of the Company or its subsid-
iaries.
The Group promotes the adoption of the Code of Ethics as a best practice standard of business conduct by partners,
suppliers, consultants, agents, dealers, and others with whom it has a long-term relationship. In fact, the Group’s con-
tracts around the world include specific clauses relating to the recognition and upholding of the principles underlying the
Code of Ethics, as well as compliance with local regulations, particularly those related to corruption, money laundering,
terrorism, and other crimes giving rise to liability for legal persons.
The Group monitors the effectiveness of, and compliance with, the Code of Ethics in accordance with a whistleblowing
management procedure. The Group Internal Audit, in the execution of its activities, takes into consideration the Code of
Ethics’ values and obligations as part of the audit program.
5.2
Non-Financial Disclosure
Introduction
This section is drafted with reference to the
GRI Standards 2021
, the main reference for non-financial reporting at national
and international level. The information contained in this section refers to the
financial year 2023
(from 1 January to 31
December) and further information about the Group’s 2030 ESG Strategy is described in the Road to 100 Report, released
on www.aristongroup.com. The reporting scope of the Non-Financial Declaration coincides with the Consolidated Report
Financial Statements, and includes the
economic
,
environmental
and
social matters relevant to Ariston Group at a global
level
.
In 2023 the Group completed the
acquisition of 100% of the share capital of CENTROTEC Climate Systems GmbH
from
CENTROTEC SE. The acquisition has entailed a complex process of integration of the various brands, including Wolf and
Brink, into the Company’s operations, including on sustainability-related aspects and relative disclosures. The presence
of different entities and the amount of data to be reported on makes it difficult to finalise the process in a 12-month
timeframe, which is the scope of this Report. As a result, after an assessment of available information and data collection
practices, where possible, the Company’s information and performance indicators are presented in a dual perspective,
offering views both with (“
incl. WB”
) and without the Wolf-Brink acquisitions (“
excl. WB”
), in order to facilitate compara-
bility with 2022 and 2021 data.
At the heart of Ariston Group's reporting process lies the concept of
materiality
, where the threshold is set to determine
the significance of reporting specific topics, reflecting the organisation's economic, environmental, or social impacts that
influence stakeholder decisions. This vision was developed based on an engagement process operating on 3 levels:
1.
First, the Group’s key stakeholders (both internal and external) were engaged to help renew the Company’s
materiality analysis, a process already underway since 2017. From the identification of a shortlist of potentially
relevant topics, the
9 material topics
most relevant to the business and its stakeholders were defined, carefully
assessed based on their potential economic, environmental and social impacts.
2.
Next, starting from these material topics, a forward-looking and strategic ESG plan was defined. The process
comprised in-depth market benchmarking and analysis of ESG pressures, challenges and opportunities related
to each material topic.
3.
Once these were outlined, the Group’s top management, as part of the ESG Council, defined the
5 engagement
areas
on which to focus its business strategy. Finally, managers were engaged to help define – through SWOT
analyses and a path of progressive convergence – clear objectives and supporting initiatives for each of the nine
material topics.
Engagement areas
Material topics
1.
Solutions
What we produce and sell
• Sustainable energy solutions
• Smart homes for sustainable living
2.
Operations
How we produce and sell
• Resources productivity and circularity
• Responsible supply chain
3.
People & Communities
The impact on communities we operate in
• Excellent employee experience and engagement
• Education for the future
4.
Customers
The impact on our business stakeholders
• Beyond customer proximity
• Trustworthy quality excellence
5.
Governance
Safeguard the way we do business
• Long-sighted sustainable governance
47
The
5 engagement areas
that define the key pillars on
which the Ariston Group has set its ESG strategical di-
rection include Solutions, Operations, Customers, Peo-
ple & Communities and finally, Governance.
In parallel to these efforts, throughout 2023, the Com-
pany has taken proactive measures to pre-emptively
address future compliance – starting in FY2024 – with
the Corporate Sustainability Reporting Directive (CSRD).
This Directive mandates that companies falling under
its scope carry out a “double materiality” analysis, as
defined by the new European Sustainability Reporting
Standards (ESRS), developed by the European Financial
Reporting Advisory Group (EFRAG). This comprehensive
analysis involves the definition of both the generated
impacts and the financial risks and opportunities expe-
rienced by the Company, based on a set of pre-defined
themes outlined by the ESRS.
The collection of information and data reported took
place in collaboration with all of the Ariston Group’s
functions on the basis of their competence, activating
an information flow coordinated and supervised by the Group ESG Director and subjected to the ESG committee’s ap-
proval.
For further information, please contact the ESG Team
(
)
or visit
Ariston Group
.
Where the relevant aspects of the
Dutch decree are discussed
This section addresses the requirements of the Dutch Decree on Non-Financial Information (
Besluit bekendmaking niet-
financiële informatie
), which is a transposition of
Directive 2014/95/EU
“Disclosure of non-financial and diversity infor-
mation” into Dutch law.
Dutch Decree aspects
Internal references
Business model
About Ariston Group – Our Group
Policies and due diligence
Environment – Supply chain due diligence
Social – Human rights due diligence
Environment – Principal risks and their management
Social – Principal risks and their management
Governance – Principal risks and their management
Principal risks and their management
Enterprise risk management (ERM)
Integrating ESG risks into the ERM process;
Environment – Principal risks and their management
Social – Principal risks and their management
Governance – Principal risks and their management
Thematic aspects
Environmental matters
Environment
Social matters
Social – Communities: education for the future
Social – Customers: trustworthy quality excellence
Employee matters
Social – People: excellent employee experience and engagement
Respect for human rights
Social – Human rights
Fight against bribery and corruption
Governance
Supply Chain
Environment
– Supply chain due diligence
About Ariston Group
Our Group
Our vision:
SUSTAINABLE COMFORT FOR EVERYONE
Our purpose is to provide everyone, in every corner of the world, with high-quality thermal comfort solutions, while
protecting the environment.
48
Our mission:
TO BE THE WORLD’S PREFERRED PARTNER IN DELIVERING ENERGY EFFICIENT AND RENEWABLE SOLUTIONS
FOR THERMAL COMFORT
To be able to understand consumer needs and to satisfy them worldwide, with leading brands and an extensive offer of
products and services in the thermal comfort, burners and components sectors.
Our Group:
A GLOBAL COMPANY WITH STRONG LOCAL ROOTS
40 countries, 28 production sites, 29 centres of competence and R&D in 5 continents. All over the world, the Ariston
Group is synonymous with
comfort
,
energy efficiency
and
respect for the environment
, thanks to its renewable and high
efficiency products, its plants in compliance with the most advanced production standards and excellent pre- and after-
sales customer support services. The Group now has a
leadership position in the global thermal comfort market
for resi-
dential and commercial spaces.
Ariston Group’s Sustainability Strategy: Road to 100
A year after
As the Group celebrates the
1
st
anniversary of the “Road to 100” plan
, the document represents the Ariston Group’s
vision and its efforts to lead the Company towards its 2030 sustainable targets through a clear roadmap. The Company is
aware that sustainability translates into a
long-term vision and objectives
, which can be achieved only through a solid
path of short, medium and long-term actions and initiatives.
While the Group has already noticed progress a year after the Plan was first issued, it expects much more to materialise
over the next few years. Additionally, the Company is constantly improving its business and its goals, in line with the
rapidly evolving sustainability landscape. In fact, the updated 2023 document now includes
new goals focussed on circu-
larity
, together with objectives that replace the ones that have already been achieved.
In the context of the recent integrations, the main focus and effort is to ensure that the targets defined in the strategic
plan seamlessly apply across all entities within the Ariston Group’s scope. While one year might not prove sufficient to
provide a comprehensive picture, especially considering the scale of the recent integrations, the Groups is already wit-
nessing positive trends and improvements in specific areas. In the summary tables depicting the targets and supporting
initiatives, the progress made in 2023 is outlined, both on the pre-acquisition perimeter, named “
excl. Wolf-Brink"
and
the current one, named “
incl. Wolf-Brink
" where available. In the "
Status
" column, the deviation from the baseline is
indicated.
The European Taxonomy
On 18 June 2020, the European Parliament adopted EU Regulation 2020/852, or Taxonomy Regulation, which represents
a European response to the current climate and environmental challenges. It contributes to the objectives of the Euro-
pean Green Deal by establishing a first classification system for sustainable economic activities thus aiming to increase
transparency and consistency in the classification of such activities and limiting the risk of greenwashing and fragmenta-
tion in relevant markets.
The Regulation sets out the criteria for determining whether an economic activity can be considered environmentally
sustainable and establishes six environmental objectives: climate change mitigation, climate change adaptation, the sus-
tainable use and protection of water and marine resources, the transition to a circular economy, pollution prevention
and control, the protection and restoration of biodiversity and ecosystems.
The Delegated Acts identify the economic activities that are eligible for an environmental objective and the criteria to
assess whether an economic activity makes a substantial contribution and does not significantly harm any of other envi-
ronmental objectives. Finally, the economic activities, to be considered as environmentally sustainable, need to be carried
out in compliance with the Minimum Safeguards, namely OECD Guidelines, UN Guiding Principles on Business and Human
Rights, International Bill of Human Rights. The Commission has adopted the following delegated acts:
-
the Climate Delegated Act (
2021/2139 EU, June 2021
,
2023/2485 EU, June 2023)
relating to the objectives of
climate change mitigation and climate change adaptation (applicable since the first year of taxonomy reporting),
-
the Environmental Delegated Act (2023/2486 EU, June 2023), relating to the other four environmental objec-
tives, which came into force for Non-Financial Disclosures published after the 1st of January 2024.
In compliance with the regulatory obligations of the Disclosure Delegated Act (2021/2178 EU), for this third year of ap-
plication, non-financial companies are required to check whether their economic activities could be considered eligible
and aligned to the first two environmental objective (Climate Change Mitigation and Climate Change Adaptation) and
49
eligible to the other four (sustainable use and protection of water and marine resources, transition to a circular economy,
pollution prevention and control, protection and restoration of biodiversity and ecosystems). From the next reporting
year, non-financial companies will be required to check whether their economic activities could be considered aligned to
every of the six environmental objectives and the taxonomy disclosure will be complete.
The group’s contribution to the environmental objectives
Ariston Group is a leader in the global thermal comfort market for domestic, commercial and industrial spaces. After
CENTROTEC Climate Systems GmbH acquisition, the Group has further extended its leadership in the market. The ac-
quired Group is a pioneer in the development of new-generation heat pumps with natural refrigerants (R290), it success-
fully operates in air-handling, offering high-efficiency systems for flow control and air conditioning in commercial appli-
cations; it features a prominent position in domestic heat-recovery ventilation – a requirement for nearly-Zero-Emission
Buildings.
Ariston Group also offers specific services related to its solutions installation and maintenance.
The economic activities of the Group can be broken down into three main sectors:
•
Burners
•
Components
•
Thermal comfort, which can be classified into water heating products (i.e. heat pumps, solar, electric storage &
electric instant water heaters, gas storage & gas instant water heaters, cylinders), space heating products (i.e.
boilers, heat pumps, hybrid systems, air conditioning, thermostats, direct services & parts), domestic heat-re-
covery ventilation, air handling and combined heat and power
1
.
Only the activities related to Thermal comfort, including air handling and domestic heat recovery ventilation products
were classified as “Taxonomy-eligible” or “eligible”, whereas Burners and Components have been considered as “Taxon-
omy non-eligible”, based on the fact that no perfect fit was identified with Annexes I and II of the Climate Delegated Act
nor with Annexes I, II, III and IV of the Environmental Delegated Act.
To identify potential “Taxonomy-Eligible” activities, the Group has evaluated:
•
the list of activities outlined in the Climate Delegated Act for the first two environmental objectives (Climate
Change Mitigation and Climate Change Adaptation). Based on the Group's interpretation of all information
made available to date by the regulator, the analysis concluded by finding that economic activities that provide
climate adaptation solutions carried out by Ariston Group are exactly the same as those activities that contribute
substantially to the achievement of the climate change mitigation objective, therefore they are all reported
under the CCM activities;
•
the list of activities outlined in the Environmental Delegated Act for the last four objectives (sustainable use and
protection of water and marine resources, transition to a circular economy, pollution prevention and control,
protection and restoration of biodiversity and ecosystems). The analysis led to the identification of the activities
related to circular economy, the description of which includes specific economic activities carried out by the
Group.
1
The product category related to combined heat and power hasn’t been considered for the 2023 KPIs computation because, due to the described M&A operation, the
group’s systems and management software are currently in the alignment process.
50
The eligible activities resulted from the analysis are reported below:
Objective
Activity's number
Activity
Description of the activity
CCM
3.5
Manufacture of en-
ergy efficiency
equipment for build-
ings
Manufacture of:
- Water heaters
- Boilers
- Heat pumps
- Air conditioners
- Solar thermal
- Thermostats
- Connectivity
-Domestic heat-recovery ventilation
- Air handling
7.3
Installation, mainte-
nance and repair of
energy efficiency
equipment
Individual renovation measures consisting in installation,
maintenance or repair of
boilers, water heaters, domestic hear
recovery ventilation and air handling
7.5
Installation, mainte-
nance and repair of
instruments and de-
vices for measuring,
regulation and con-
trolling energy per-
formance of build-
ings
Installation, maintenance and repair of thermostats and con-
nectivity for measuring, regulation and controlling energy per-
formance of buildings
7.6
Installation, mainte-
nance and repair of
renewable energy
technologies
Installation, maintenance and repair of heat pumps and rele-
vant "after-services" activities
CE
1.2
Manufacture of
electrical and elec-
tronic equipment
Manufacture of:
- Water heaters
- Boilers,
- Heat pumps
- Air conditioners
- Solar thermal
- Thermostats
- Connectivity
-Domestic heat-recovery ventilation
5.1
Repair, refurbish-
ment and remanu-
facturing
Individual renovation measures consisting in maintenance or
repair, refurbishment or remanufacture of:
- Water heaters
- Boilers
- Heat pumps
- Solar thermal
- Domestic heat-recovery ventilation
- Air handling
5.2
Sale of spare parts
The economic activity consists of the sale of spare parts be-
yond legal obligations
The Group has decided not to go further in the analysis for the activity 7.5 (“Installation, maintenance and repair of
instruments and devices for measuring, regulation and controlling energy performance of buildings”), because data from
the installation of thermostats cannot be disaggregated from the value of the rest of the products sold (already included
in activity 7.3); furthermore, such values represent a residual part of the total aggregated amount for the activity.
The information related to the service are thus split among and generated from the following activities:
·
Activity 7.3 - Installation, maintenance and repair of energy efficiency equipment
·
Activity 7.6 - Installation, maintenance and repair of renewable energy technologies
51
Considering the Waste from Electrical and Electronic Equipment (WEEE) Directive as a reference for interpreting the
definition of "electrical and electronic equipment" dictated by Activity 1.2, all products of the Group that fall under the
category "Thermal Comfort" seem to be relevant to the definition and seem, therefore, to be included in the eligibility
calculations. Notwithstanding this, Ariston Group carried out a preliminary analysis of the Substantial Contribution Crite-
ria (SCC) required by Activity 1.2 and found out that the requirements
shows particular focus on specific features of other
products falling in the same definition (i.e. white goods) which are not representative of the Group’s product categories;
moreover, they are extremely stringent
2
and misaligned in terms of timing
3
compared to those of the current law on the
subject matter, to which the Group is compliant.
In terms of contribution to the climate mitigation objective, all eligible activities are classified as possible enablers for
other activities to become low-carbon or to lead to greenhouse gas reductions according to Article 10(1) point (i) of
Regulation (EU) 2020/852.
As per last year, to identify how and to what extent the activities of the Group are associated with economic activities
qualified as “aligned” to Climate Change Mitigation, Ariston Group has analysed all the applicable Technical Screening
Criteria (TSC). Below are represented the steps of the analysis undertaken:
Substantial Contribution Criteria
•
Household appliances, space heating, domestic hot water systems, cooling and ventilation systems rated in the
highest two populated classes of energy efficiency in accordance with Regulation (EU) 2017/1369 of the Euro-
pean Parliament and of the Council and Delegated Acts adopted under that Regulation
4
. This first criterion ap-
plies to all Ariston Group’s products identified as Taxonomy-eligible and included in the activity 3.5, namely
water heaters, boilers, heat pumps, air conditioners, air handling and domestic heat recovery ventilation systems
and solar thermal. This criterion is actually extended to the other Taxonomy-eligible activities identified with the
codes 7.3 and 7.6 that are related to the service of installation and maintenance of individual components and
systems.
•
Heat pumps compliant with the following criteria in accordance with Directive (EU) 2018/2001: Only heat pumps
for which the estimated average seasonal performance factor (SPF) > 1,15 * 1/η shall be taken into account.
This second criterion applies only to heating heat pumps and to the activity of installation and related operations
(activity 7.6)
DNSH Criteria
The Group has verified the compliance of its eligible activities to the DNSH requirements related the objective CCM out-
lined in the Climate Delegated Act.
Adaptation to climate change:
Ariston Group has performed an Assessment of Natural Hazard Exposure to identify top-
priority sites deserving of deeper investigations regarding their exposure to natural hazards. The Group is currently work-
ing to expand the scope of the analysis and to include other applicable risks, if any, while considering various climate
scenarios in short, mid and long term (e.g., scenarios periodically published by the Intergovernmental Panel on Climate
Change (IPCC)). The analysis is using the results of the Assessment of Natural Hazard Exposure as its initial reference.
Sustainable use and protection of water and marine resources:
Ariston Group is monitoring its environmental impacts
through specific internal tools and processes, such as the HSE policy, that cover many different environmental aspects
(e.g. energy consumption and air emissions, waste, noise, etc.) To ensure continuous improvement, the Group has de-
signed its management system in accordance with ISO 14001 and to measure and assess environmental performance
according to the WCM methodology. The Group’s policy includes water use and protection management plan. This policy
is shared with all stakeholders, and suppliers are required to sign a declaration of commitment. Ariston Group consider
water as a shared resource by reducing its consumption:
•
by improving the production process,
•
by reusing water, as an example in the tank sealing quality control station, and ; moreover cooling processes
have closed circuit
•
by reducing the use of tap water by withdrawal it from well (83% of the water withdrawal is directly pumped
from ground water that is not drinkable).
52
•
The Group has developed a standard method for assessing
water aspects, which is based on:
•
The separation of industrial, civil, and rainwater management.
•
Sensitivity concerning discharge into a receiving water body with ecological status (water quality)
•
Compliance with legal requirements based on plant authorization categories
•
Stakeholder involvement reflecting community concern
•
Extension representing the area affected by the impact
•
Reversibility of the impact itself.
According to this assessment, Ariston Group factories are considered as a low water-related impact company.
Transition to a circular economy:
Ariston Group makes use of cutting-edge technologies to offer energy-efficient prod-
ucts, reduce packaging and provide renewable solutions, considering a priority to innovate for minimizing environmental
impacts. The Company is currently working on implementing a circular approach which is based on a strategy that prior-
itizes recycling over disposal and encourages the reuse of various materials in the manufacturing processes. The initiative
begins with the procurement of recycled and recyclable raw materials. For instance, the company sources recycled steel
,
more specifically it entails 29% recycled content which we aim to increase as we progress. Steel is the main primary input
material for our products: it accounts for about 70% of the total weight of material used for manufacturing primary
products. The commitment to sustainability extends to the production processes, which are designed to reduce and op-
timize consumption.
On this, for what concerns the waste management, a corporate goal for waste reduction and circularity is established
annually. Waste reduction projects are prioritized based on the 5R methodology by:
•
Refusing non necessary packaging and assessing environmental impact of any change through a pre-project risk
assessment
•
Reducing waste production by considering by products as secondary products; this approach is exemplified by
magnesium oxide, which is not classified as waste but as a secondary product to be used as raw material. This
involves also designing high-quality products to extend their lifespan and designing efficient packaging to reduce
damaged products in the supply chain.
•
Reusing packaging of components in collaboration with supplier, rework our own non-conforming product to
reuse tank and other metal components saving of the production, selling wooden pallets for repair and reuse.
•
Recycling metal, plastics, cartons, electrical components, etc.
•
Revalorize by prioritizing incineration with energy recovery to disposal processes and continuously conducting
technological monitoring to discover new treatment methods for non-recyclable components like polyurethane
foam, ensuring the energy efficiency of our boilers.
Moreover, Ariston Group is actively researching alternative solutions to decrease the impact of its packaging, that are
officially formalized in the released Sustainable Packaging Definition where the Group highlights the commitment to in-
crease the share of recyclable packaging and recycled plastic, remove smaller packaging and minimize the use of plastic
or avoid it where possible.
Besides, in France, Ariston Group has already dealt with regulations on materials traceability developing during 2022 a
project to be compliant with the French law n° 2020- 105 of February 10, 2020, relating to the fight against waste and
the promotion of a circular economy (Agec Law)
5
, a great boost to the ecological transition that came into force for the
Company from 1 January 2023. The law requires the publication of information on the environmental qualities and char-
acteristics of products (used recycled material, recyclability, presence of rare earth, precious metals and dangerous sub-
stances). The availability of the data is enabling the company to identify circular opportunities and raise awareness in
terms of resource consumption, with a potential to be further implemented into different areas of the business. While
the initial analysis concentrated on France, the project enabled the Group to broaden its comprehension of the materials
of products sold and distributed in other markets. Further deep dives on material traceability extends to other substances
as well (e.g. substances of very high concern) as the Group is compliant with the REACH, ROHS and POP directives.
For further discussion on the topic, please refer to the chapter “The Group’s Environmental Commitment” of the Non-
Financial Disclosure Report, part of the Group Annual Report.
53
Pollution prevention and control:
As regard to harmful substances used in the processes, Ariston Group verified the pres-
ence of the listed substances of the Regulation mentioned and it is compliant with the REACH, ROHS and POPs directives.
For further information, please refer to the chapter “The Group’s Environmental Commitment” of the Non-Financial Dis-
closure Report.
Protection and restoration of biodiversity and ecosystems:
As regard with the objective and the main actions pursued
aimed at preserving biodiversity and ecosystems, Ariston Group is ISO 14001 certified and, while in EU is compliant with
EIA (Environmental Impact Assessment, Directive 2011/92/EU, outside EU the Group has developed a standard to assess
environmental aspects and impacts, including impact on biodiversity. The assessment has been performed on the follow-
ing risks impacting biodiversity: air emission (VOC, NOx, dust and non-listed substances), water discharge, releases to soil,
noise, light and electromagnetic emissions. According to this assessment and the geographic location of its facilities out
of any protected area according to IUCN Protected Area Management categories, Ariston Group is considered as not
impacting biodiversity.
Minimum Safeguards
Ariston Group is committed to respect the fundamental human rights of all its stakeholders across the value chain: in its
operations, across the supply chain and in the communities where the Company operates in. Ariston Group’s commit-
ment refers to the internationally recognized human rights defined in the International Bill of Human Rights, the ILO’s
Declaration on the Fundamental Principles and Rights at Work and the Convention on the Rights of the Child. Ariston
Group’s commitment to Human Rights has been consolidated in a due diligence process, conducted in 2022 - aligned
with the UN Guiding Principles on Business and human rights - aimed at identifying and assessing potential risks and
impacts related to human rights. This process allowed Ariston Group to identify its salient human rights the principles
guiding the Group's operations are fully aligned with those found in the OECD Guidelines for Multinational Enterprises.
For further information, please refer to the Non-Financial Disclosure Report, part of the Group Annual Report.
KPIs Templates
This section contains the templates for the three KPIs (Turnover, Capex and Opex) from Delegated Act Art.8.
The Group carried out analysis on the eligibility of all its economic activities for the 6 Objectives. However, because of
the considerations made in the paragraph “The Group’s contribution to the environmental objectives” the following
templates provide an overview of the quantitative analyses performed with respect to the eligibility and alignment of
the Group’s economic activities to the “Climate Change Mitigation” objective.
The values provided reflect a conservative approach to the interpretation of the new Regulation and were elaborated
also taking into consideration the available information (e.g. Q&A) and requirements set out by the regulator. Therefore,
the Group does not exclude the possibility of revising the methodology applied so far based on any new Q&A or specific
guidelines for the next reporting year.
54
Turnover
Proportion of Turnover/Total turnover
Taxonomy-aligned per objective
Taxonomy-eligible per objective
CCM
69.37%
69.37-
8
CCA
-
-
WTR
-
-
CE
Not disclosed
91.82%
PPC
-
-
BIO
-
-
2
The assessment of CE alignment hasn’t been yet conducted according to the requirements of EU Taxonomy delegated acts
Financial year N
Year
Substantial contribution criteria
DNSH criteria
(‘Does Not Signifi-
cantly Harm’)
Economic activities
(1)
Code(s)
(2)
Turnover (3)
Proportion of
turnover, year
N (4)
Climate change
mitigation (5)
Climate changeadaptation
(6)
Water and marine resources
(7)
Circular economy
(8)
Pollution
(9)
Biodiversity andecosystems
(10)
Climate change
mitigation
(11)
Climate changeadaptation
(12)
Water
and marine resources
(13)
Circular economy
(14)
Pollution
(15)
Biodiversity andecosystems
(16)
Minimum safeguards
(17)
Proportion of Taxon-
omy- aligned (A.1.) or -
eligible (A.2.) turno-
ver, year N-1 (18)
Category
enabling
activity
(19)
Category
transi-
tional ac-
tivity (20)
Text
EUR
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY
-ELIGIBLE ACTIVITIES
A.1 Environmental sustainable activities (Taxonomy
-aligned)
Manufacturing of energy
efficiency equipment for
buildings
CCM
3.5
1,928,147,012.54
62.36%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
58.33%
E
Installation, maintenance
and repair of energy effi-
ciency equipment
CCM
7.3
181,75,024.66
5.88%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
6.53%
E
Installation, maintenance
and repair of renewable
energy technologies
CCM
7.6
34,998,090.48
1.13%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.88%
E
Turnover of environmentally
sustainable activities (Taxon-
omy-aligned) (A.1)
2,144,896,128.68
69.37% 100%
0%
0%
0%
0%
0%
Y
Y
Y
Y
Y
Y
Y
65.74%
Of which enabling
2,144,896,128.68
100.00% 100%
0%
0%
0%
0%
0%
Y
Y
Y
Y
Y
Y
Y
100.00%
E
Of which transitional
0
0.00%
Y
Y
Y
Y
Y
Y
Y
0.00%
T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Manufacture of electrical
and electronic equipment
CE 1.2
595,331,028.89
19.26% N/EL
N/EL
N/EL
EL N/EL
N/EL
Repair, refurbishment and
remanufacturing
CE 5.1
74,619,971.32
2.41% N/EL
N/EL
N/EL
EL N/EL
N/EL
Sale of spare parts
CE 5.2
47,500,156.85
1.54% N/EL
N/EL
N/EL
EL N/EL
N/EL
Turnover of Taxonomy-
eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
717,451,157.06
2
23.21%
0%
0%
0% 100%
0%
0%
0%
A. Turnover of Taxonomy eligible
activities (A.1+A.2)
2,862,347,284.74
92.58%
0%
0%
0% 100%
0%
0%
65.74%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
Turnover of Taxon-
omy- non-eligible ac-
tivities
229,427,612.26
7.42%
TOTAL
3,091,774,897.00
100.00%
55
Capex
Proportion of CapEx/Total CapEx
Taxonomy-aligned per ob-
jective
Taxonomy-eligible per objec-
tive
CCM
72.42%
72.42%
5
CCA
-
-
WTR
-
-
CE
Not disclosed
77.28%
6
PPC
-
-
BIO
-
-
3
The numerator includes a Capex share of intagibles and tangibles assets related to Centrotec acquisition.
4
The assessment of CE alignment hasn’t been yet conducted according to the requirements of EU Taxonomy delegated acts
5
The eligibility matches with the alignment
6
The numerator includes a Capex share of intagibles and tangibles assets related to Centrotec acquisition.
Financial year N
Year
Substantial contribution criteria
DNSH criteria (‘Does
Not Significantly
Harm’)
Economic activities
(1)
Code(s) (2)
CapEx (3)
Proportion of
CapEx, year N
(4)
Climate change
mitigation (5)
Climate changeadaptation
(6)
Water and marine resources
(7)
Circular economy
(8)
Pollution
(9)
Biodiversity andecosystems
(10)
Climate change
mitigation
(11)
Climate changeadaptation
(12)
Water
and marine resources
(13)
Circular economy
(14)
Pollution
(15)
Biodiversity andecosystems
(16)
Minimum safeguards
(17)
Proportion
of Taxon-
omy-
aligned
(A.1.) or eli-
gible (A.2.)
CapEx, year
N-1 (18)
Cate-
gory
ena-
bling
activ-
ity (19)
Cate-
gory
transi-
tional
activity
(20)
Text
EUR
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY
-ELIGIBLE ACTIVITIES
A.1 Environmental sustainable activities (Taxonomy
-aligned)
Manufacturing of energy
efficiency equipment for
buildings
CCM 3.5
1,206,480,429.87
3
72.36%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
57.33%
E
Installation, mainte-
nance and repair of en-
ergy efficiency equip-
ment
CCM 7.3
831,921.91
0.16%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.10%
E
Installation, mainte-
nance and repair of re-
newable energy technol-
ogies
CCM 7.6
204,784.74
0.04%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
0.02%
E
CapEx of environmentally sustaina-
ble activities (Taxonomy-aligned)
(A.1)
1,207,517,136.51
72.42% 100%
0%
0%
0%
0%
0%
Y
Y
Y
Y
Y
Y
Y
57.44%
Of which enabling
1,207,517,136.51
100.00% 100%
0%
0%
0%
0%
0%
Y
Y
Y
Y
Y
Y
Y
100.00%
E
Of which transitional
0
0.00%
Y
Y
Y
Y
Y
Y
Y
0.00%
T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Manufacture of electrical
and electronic equipment
CE 1.2
297,184,061.83
17.82%
N/EL
N/EL
N/EL
EL
N/EL
N/EL
Repair, refurbishment and
remanufacturing
CE 5.1
327,708.40
0.02%
N/EL
N/EL
N/EL
EL
N/EL
N/EL
Sale of spare parts
CE 5.2
0.00
0.00%
N/EL
N/EL
N/EL
EL
N/EL
N/EL
CapEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
(A.2)
297,511,770.23
4
17.84%
0%
0%
0%
100%
0%
0%
-
A.
CapEx of Taxonomy- eligible ac-
tivities (A.1+A.2)
1,483,872,447.63
88.99%
0%
0%
0% 100%
0%
0%
57.44%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy
-
non- eligible activi-
ties
183,527,552
11.01%
TOTAL
1,667,400,000.00
100.00%
56
Opex
7
The assessment of CE alignment hasn’t been yet conducted according to the requirements of EU Taxonomy delegated acts
8
The eligibility matches with the alignment
Financial year N
Year
Substantial contribution criteria
DNSH criteria (‘Does
Not Significantly
Harm’)
Economic activities
(1)
Code(s) (2)
OpEx (3)
Proportion of
OpEx, year N (4)
Climate change
mitigation (5)
Climate changeadaptation
(6)
Water and marine resources
(7)
Circular economy
(8)
Pollution
(9)
Biodiversity and
ecosystems
(10)
Climate change
mitigation
(11)
Climate changeadaptation
(12)
Water
and marine resources
(13)
Circular economy
(14)
Pollution
(15)
Biodiversity andecosystems
(16)
Minimum safeguards
(17)
Propor-
tion of
Taxon-
omy-
aligned
(A.1.) or
eligible
(A.2.)
OpEx,
year N-1
(18)
Cat-
e-
gory
ena-
bling
ac-
tivity
(19)
Cate-
gory
tran-
si-
tional
activ-
ity
(20)
Text
EUR
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY
-ELIGIBLE ACTIVITIES
A.1 Environmental sustainable activities (Taxonomy
-aligned)
Manufacturing of energy
efficiency equipment for
buildings
CCM 3.5
47,183,250.36
21.34%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
18.24%
E
Installation, mainte-
nance and repair of en-
ergy efficiency equip-
ment
CCM 7.3
58,774,116.37
26.58%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
29.55%
E
Installation, mainte-
nance and repair of re-
newable energy technol-
ogies
CCM 7.6
14,155,905.03
6.40%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
6.11%
E
OpEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
120,113,271.76
54.33%
100%
0%
0%
0%
0%
0%
Y
Y
Y
Y
Y
Y
Y
53.90%
Of
which enabling
120,113,271.76
100.00% 100%
0%
0%
0%
0%
0%
Y
Y
Y
Y
Y
Y
Y
100.00%
E
Of which transitional
0
0.00%
Y
Y
Y
Y
Y
Y
Y
0.00%
T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Manufacture of electrical
and electronic equipment
CE 1.2
11,537,059.55
5.22%
N/EL
N/EL
N/EL
EL
N/EL
N/EL
Repair, refurbishment and
remanufacturing
CE 5.1
32,240,069.48
14.58%
N/EL
N/EL
N/EL
EL
N/EL
N/EL
Sale of spare parts
CE 5.2
0.00
0.00%
N/EL
N/EL
N/EL
EL
N/EL
N/EL
OpEx of Taxonomy-eligible but not en-
vironmentally sustainable activities
(not Taxonomy-aligned activities)
(A.2)
43,777,129.02
7
19.80%
0%
0%
0%
100%
0%
0%
-
B.
OpEx of Taxonomy- eligible
activities (A.1+A.2)
151,355,139.85
68.46%
0%
0%
0%
100%
0%
0%
53.90%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-
non- eligible activi-
ties
69,730,016.15
31.54%
TOTAL
221,085,156.00
100.00
%
Proportion of OpEx/Total OpEx
Taxonomy-aligned per objective
Taxonomy-eligible per objective
CCM
54.33%
54.33
8
CCA
-
-
WTR
-
-
CE
Not disclosed
72.08%
PPC
-
-
BIO
-
-
57
Calculation methodology 2023
For 2023, Ariston Group performed again the analysis to determine the percentage of eligibility and alignment of the
climate related economic activities. The values provided for Turnover, CapEx and OpEx reflect a conservative approach
to the interpretation of the new Regulation and were elaborated also taking into consideration the available infor-
mation and requirements set out for the two objectives previously mentioned.
With the introduction of the Environmental Delegated Act, Ariston Group used the updated templates in accordance
with the Regulation. Firstly, the first section (A1) shows the alignment to the CCM in continuity with previous years,
which is explained later on in this paragraph.
As for the second section (A2) in all three tables (Turnover, Capex, Opex),
eligibility was calculated avoiding double counting, disclosing the share which is not aligned to the CCM objective but
eligible to the CE. Please refer to the summary tables below each KPI template for a total view on eligibility.
Products – alignment methodology
The results of the three KPIs related to products are generated from economic activity 3.5, which is the manufacture of
energy efficiency equipment for buildings. The products related to this activity are water heaters, boilers, heating heat
pumps, heat pump water heaters, air conditioners, solar thermal, domestic heat-recovery ventilation, air handling, ther-
mostats and connectivity.
KPI for Turnover:
The numerator was determined starting from an analysis of the main product families to identify Tax-
onomy-aligned products according to the Technical Screening Criteria (TSC): renewable energy technologies have been
fully included in the Turnover calculation, while for water heating and space heating solutions, only the two highest
classes of energy efficiency have been taken into consideration.
As per the denominator of the KPI, 2023 consolidated net revenue was used (
see Note 1.1 - Revenue and Income)
KPI for CapEX:
The numerator includes the total amount of Capex associated with Taxonomy-aligned products, such as
research and development activities aimed at reducing costs and improving product quality, all the laboratories, all the
assets inside the research labs and all the plants and properties that improved the manufacturing process of such prod-
ucts.
The denominator includes additions to tangible and intangible assets during the financial year considered before depre-
ciation, amortisation and any re-measurements, including those resulting from revaluations and impairments, for the
relevant financial year and excluding fair value changes. (
see sub-paragraph 4.9.7 Capital Expenditures)
The denominator also covers additions to tangible and intangible assets resulting from business combinations.
KPI for OpEX.
The numerator includes the total amount of operating expenditures, such as non-capitalized R&D costs
and maintenance and repair
expenditures. As in the methodology used for calculating Capex, each type of costs has
been linked to the corresponding product family classified as Taxonomy-aligned.
The denominator contains direct non-capitalized costs that relate to research and development, building renovation
measures, short-term leases, maintenance and repair and any other direct expenditures relating to the day-to-day ser-
vicing of assets of property, plant and equipment by the undertaking or third party to whom activities are outsourced
that are necessary to ensure the continued and effective functioning of such assets.
Services - alignment methodology
The Group decided not to compute the three KPIs for activity 7.5 (“Installation, maintenance and repair of instruments
and devices for measuring, regulation and controlling energy performance of buildings”) because revenue data from the
installation of thermostats cannot be disaggregated from the value of products sold (already included in activity 7.3);
furthermore, such values represent a residual part of the total aggregated amount for the activity. Accordingly, it is not
possible to define a methodology to allocate CapEx and OpEx properly.
The results of the three KPIs related to the service are generated from the following activities:
·
Activity 7.3 - Installation, maintenance and repair of energy efficiency equipment
·
Activity 7.6 - Installation, maintenance and repair of renewable energy technologies
KPI for Turnover:
To calculate the turnover originated by the services carried out by Ariston Group, only the services
conducted by the companies or brands that offer direct after-sales services have been taken into account. The numera-
tor of the turnover is calculated from the service of installation, maintenance and repair on products previously identi-
fied as Taxonomy-aligned.
58
In the calculation of Turnover, also Spare Parts are included.
As denominator of the KPI, 2023 consolidated net revenue was used.
KPI for CapEX:
The numerator covers the total amount of CapEx related to the services of installation, maintenance and
repair of products previously identified as Taxonomy-aligned. In this calculation, the CapEx from the installation of the
Spare Parts has not been considered as it falls within the scope of the CapEx of the finished products.
The denominator contains additions to tangible and intangible assets during the financial year considered before depre-
ciation, amortization and any restatements, including those resulting from revaluations and impairments, for the relevant
financial year and excluding fair value changes.
The denominator also includes increases in tangible and intangible assets resulting from business combinations.
KPI for OpEX:
The numerator calculation of OpEx includes car rental, fuel, non-capitalized R&D costs related to the ser-
vices of installation, maintenance and repair of each product category previously identified as Taxonomy-aligned. In this
calculation, the OpEx from the installation of the Spare Parts has not been considered as it falls within the scope of the
OpEx of the finished products.
The denominator contains direct non-capitalized costs that relate to research and development, building renovation
measures, short-term leases, maintenance and repair, and any other direct expenditures relating to the day-to-day ser-
vicing of assets of property, plant and equipment by the undertaking or third party to whom activities are outsourced
that are necessary to ensure the continued and effective functioning of such assets.
59
The Group’s approach to risk management
Enterprise risk management (
ERM)
Please refer to section “5.1 Risk Management” of the Annual Report 2023.
Integrating
ESG risks into the ERM process
The ERM model integrates
Environmental, Social and Governance (ESG) risks
, which are among the most relevant risks
that the Group is facing. Adherence to evolving ESG regulations, increasing the level of requirements and market expec-
tations, implies the engagement of a wide range of company functions in complex programs aimed to innovate products
and develop new technologies, changing materials and packaging, reducing energy and resources consumption, as well
as direct and indirect emissions. In addition, for some of those objectives, the involvement of third parties and suppliers
is essential.
ENVIRONMENT
The “Environment” Chapter includes the “Solutions” and “Operations” areas of engagement of the Group’s 2030 ESG
plan (Road to 100). While “Solutions” relates to the Company’s products and more specifically, the adoption of energy
efficient solutions, “Operations” discusses the strategies employed to create a decarbonised business through the adop-
tion of circular approaches across the value chain.
Principal risk and its management
RISK: inability to manage/reduce the Group’s environmental impact and manage responsibly the natural resources
throughout the value chain, taking into consideration the compliance with regulatory requirements
SOLUTIONS – Policies and mitigation actions
OPERATIONS – Policies and mitigation actions
Products and packaging
-
PEP ecopassport® for 10 products marketed in France
-
Life Cycle Assessments (LCA) on different solutions, such as heating
heat pumps, condensing boilers and hybrid solutions
-
Product Life-cycle Management (PLM)
-
R&D focus on increase efficiency of heating heat pumps and heat
pumps water heaters
-
Sustainable Packaging Definition
Plants
-
Group HSE Policy
-
Group HSE Management System
-
ISO 14001 certification
-
Decarbonisation strategy to 2030 to reduce Scope 1, 2 and 3 GHG
emissions
-
World Class Methodology (WCM)
-
Increase in heating heat pumps’ production capacity
-
Business Continuity Plan (BCP)
-
Printed Circuit Board (PCB) remanufacturing
-
RoHS certification
-
REACH certification
Supply Chain
-
Suppliers request to comply with RoHS and REACH requirements
-
Supply Chain due diligence through Ecovadis
-
E-vendor portal ESG questionnaire for new suppliers
-
Reshoring Plans
60
Solutions: Sustainable energy solutions
The ambition to 2030
2030
Long
-
term target
Progress in 2023
Status
100 million tons of CO
2
emissions avoided thanks to the
renewable and high efficiency products we sell in the
regions where we operate
9
26,571,693.58
million tons of CO
2
avoided
(2020 base year)
26 mln
(vs 2020)
2025
Mid
-
term supporting initiatives
Progress in 2023
Status
100% heating gas condensing technologies’
revenues from hydrogen-ready (certified to be
20% H2 ready) solutions in Europe
10
69% (excluding Wolf-Brink)
75% (Including Wolf-Brink)
+40%
(vs 2022)
> 60% revenues in Europe generated by renewable
technologies vs. < 40% from fossil fuel products
11
48% renewable technologies vs 52% fossil
fuel products (excluding Wolf-Brink)
49% renewable technologies vs 51% fossil
fuel products (including Wolf-Brink)
+2%
rene-
wable
techno-
logies-
2% fos-
sil fuel
pro-
ducts
(vs 2022)
Launch of Demand Response-ready products in Europe
and the USA
Completed
Launch of Home Energy Management-ready products
and accessories in Europe and the USA
Completed
Launch of a representative Home Energy Management
– ready product on electric storage water heaters, heat
pump water heaters and heating heat pumps
New target
Launch of Demand Response-ready products in new
markets other than France, Belgium and US
New target
Confirm effort to shift heat pump water heaters to
lower GWP refrigerants
New target
2023 milestones
Research and development efforts in the heating heat pump technologies
In terms of research and development efforts dedicated to
heating heat pumps
, Ariston Group has undertaken a compre-
hensive approach, fostering innovation, adaptation to market demands while also enabling climate change mitigation
and sustainable transition. Most notably,
investments in laboratories across three continents
– Europe, America and
China – were made with a triple objective. First and foremost,
testing capacity nearly doubled
in order to incorporate
new gases and adhere to the evolving regulatory framework. Simultaneously, the investment aims to ensure
close prox-
imity between the end market
,
testing facilities and production facilities
, emphasising the importance of adaptability and
responsiveness.
Heat pump technologies as a key lever to achieve the energy transition
Wolf’s new R290 natural refrigerant CHA-16/20 air-to-water heat pump
:
Wolf counts to the main leading companies in devel-
oping
environmentally friendly heat pumps with R290
.
The latest expansion to its silent and efficient CHA-Monoblock product
family has been the new 16 kW heating capacity class (even at cold temperatures). As an optional cascade of up to five
9
To estimate avoided emissions, the Group assumes that efficient product categories are going to gradually replace products with lower efficiency in the installed park,
whose average efficiency has been internally assessed. Technological developments that lack visibility have not been considered. The emissions avoided have been calcu-
lated assuming an average expected lifetime of the products of 15 years and considering emissions across their entire lifecycle. The estimation of sales projections of the
product categories in scope is based on the forecasts from the Group’s Strategy Master Plan. Assumptions on average emission factors kgCO2/kWh are kept constant until
2030 and defined specifically for macro-region and energy type.
10
Including the Balkans, Switzerland, the United Kingdom, Israel, Norway and Ukraine. Excluding Russia.
11
The perimeter considered refers to revenues generated in Europe by Thermal Comfort division (Including the Balkans, Switzerland, the United Kingdom, Israel, Norway
and Ukraine. Excluding Russia), for both domestic and commercial heating and for water heating products as specified in the Delegated Acts of the EU Taxonomy. Renewa-
ble technologies refer to heat pumps for space heating and cooling, and for water heating, solar water heaters. Fossil products include boilers and gas water heaters (both
storage and instantaneous). A change in the model calculation has been implemented vs 2022 to include air-to-air heat pumps, previously considered as out of scope.
Electric water heaters, accessories, cylinders and burners are excluded from the calculation. The KPI percentage is calculated as the weight of renewable technologies on
the sum of renewable technologies and fossil products.
61
heat pumps it is also possible to achieve high capacities with 80 kW in heating mode. The new
WOLF CHA Monoblock
is
equipped with
natural refrigerant R290
: with its low Global Warming Potential (GWP) of 3, it enhances the heat pump's
overall efficiency. This choice, coupled with a large evaporator as well as a big single fan, ensures efficiency even at higher
flow temperatures. The CHA-Monoblock is
compatible with conventional radiators
. The CHA-Monoblock product family
meets the requirements of the German federal funding for efficient building program ("BEG
12
") as well as “BAFA”.
The AEREOTOP SX, winner of the Red Dot Design Award:
Recently launched, the AEROTOP SX earned the
Red Dot Design
Award in 2023
. This recognition underscores the product as one of the market’s most energy-efficient solution, boasting
an A+++ energy efficiency class and a high degree of flexibility, integrating in domestic spaces with minimal noise impact.
AEROTOP SX is
compatible with photovoltaic (PV) systems
. Building on this success, ELCO has introduced an expanded
version of the AEROTOP SX in response to market demand. While the initial release offered a 7 and 10 kWh capacities,
the 13 kWh variant launched at the end of 2023 could cater to a broader spectrum of consumers, strategically addressing
diverse market segments and aligning with ELCO’s commitment to provide tailored solutions. This expanded capacity
facilitates the transition to renewable energy in older homes, enabling the replacement of fossil fuel boilers.
Elogos, a new thermally activated heat pump:
In 2023, Ariston launched Elogos, a
new thermally activated heat pump
which
reduces consumption and emissions by 30% compared to a condensing boiler
and isable to maintain high energy
efficiency in harsher climate conditions and in the most demanding existing buildings. Elogos not only achieves flow tem-
peratures of 70°C even when ambient air temperature is as low as –22°C, but in these conditions it can deliver the
full
nominal output power in absence of any integration
(electrical resistances or back-up boiler). This feature allows to ad-
dress the
hard-to-abate buildings
(that represent 80% of European building stock) without affecting the electrical grids
and allowing the
decarbonisation of heating in advance to the decarbonisation of the electrical grid
.
The ease of installation, the use of a sealed circuit technology with natural refrigerant (R717 with GWP=0 and ODP=0
resulting in no need for an F-gas license)
facilitate the product deployment by Installers and service technicians with gas
boiler expertise
. In addition, this heat pump technology is compatible with various alternative fuel solutions such as nat-
ural gas, liquefied petroleum gas (LPG) and emerging green gases such as Bio-methane, Bio-LPG, ad Hydrogen blends up
to 20% or 100%.
Water heating solutions to reduce the environmental impact
Nuos Plus R290: first propane platform designed for EU market:
In
Europe
, Ariston introduced the NUOS Plus R290, a new
range of
A+ wall-hung heat-pump water heaters
, representing a step ahead in environmental sustainability. The range
features propane technology, i.e. 100% natural gas with lowest GWP Index. This new NUOS range offers to the market
not only R290 but also a significant
reduction in noise level (from 50dB to 45dB), 100% wi-fi connectivity, i-Memory
function for self-adaptation
to the users’ behaviours and the
PV systems function
.
Hybrid heat pump water heater:
In 2023, the Group launched the
first heat pump water heater range in the US market.
The range is tailored to meet US specific customer needs and regulatory requirements. It also includes four distinct ca-
pacities (40-50-65-80 Gal) and Demand Response (DR) embedded functionalities (including most sophisticated solutions
to fulfil California Ja13 requirements). To support the production and ensure proximity to distribution of the new product
line, Ariston established a
new manufacturing facility in Mexico
, further underlining its commitment to providing high
quality water heating solutions to the market.
The integration of Demand Response-ready products:
Renewable energy sources depend on
intermittent and sometimes
unpredictable weather conditions
.
Energy storage solutions
play a critical role: functioning as batteries, they are capable
of storing surplus energy during periods of surplus and releasing it during scarcity, balancing the fluctuating availability
of renewable energy and ensuring a reliable energy supply for households.
In 2023, the Group
the Group made significant strides in the field of
Demand Response (DR)
, a grid service that dynamically
adjusts the energy consumption of multiple assets, responding to peaks in the energy supply and demand. This technol-
ogy finds application in
electric storage water heaters (ESWH)
, through which the Group remotely coordinates thermal
comfort devices at the aggregate asset level, which contributes to
avoiding power peaks on the national grid
and to
shifting
energy demand when the latter is abundant and cheaper
.
12
The Federal Subsidy for Efficient Buildings (BEG) operated by the German development bank is a tool derived from the Climate Action Program 2030, with the aim to
promote building renovation across the country. The BEG combines existing programs to promote energy efficiency and renewable energies in the building sector and
supports, among other things, the use of new heating systems, the optimisation of existing heating systems, measures on the building envelope and the use of optimised
system technology.
62
A
new range of DR-ready products
was introduced across the EU and US markets. On the
European market
, and specifically
in France, the Group unveiled its first electric storage water heater, the
Velis Dry Wi-Fi FE
, which is able to offer an elec-
trical flexibility service. In the
US
, the Group developed DR-ready products, catering to the specific regulatory require-
ments of Washington and Oregon. Furthermore, in the broader US market, Ariston launched products for Heat Pump
Water Heaters (HPWH), in line with the
Energy Star certification requirements
.
Ariston Group ’s Home Energy Management portfolio:
The
Home Energy Management (HEM) system
monitors, controls
and optimises energy flows to minimise customers’ energy costs, while aligning to their preferences. This technology is
deployed in
electric storage water heaters (ESWH) and
enables the Group to remotely coordinate thermal comfort devices
at the single asset level,
contributing
to reducing electricity bills by
shifting loads when there is production from PV
.
2023 saw the launch of Ariston
PowerFlex Solar
, part of the Powerflex ESWH product line, which utilises T-Flex 2.0 pa-
tented technology to communicate with the smart meter, contributing to
network stabilisation during power peaks
. By
automatically adjusting its power based on the total energy consumption of household appliances, the Powerflex Solar
mitigates electricity overloads, prevents blackouts, maximises energy savings and optimises heating times. Specifically, it
incorporates the auto-consumption of electricity produced from solar energy
, while addressing both energy efficiency
and grid stability.
Low-emitting solutions to reduce products’ environmental footprint
Burners’ industrial applications operating with F30 fuel
:
As part of the new French energy policy aimed at reducing fossil
fuel usage, in force from 1 July, 2022,
new boilers installed in the French market are required to operate with the F30
biofuel
, comprising 70% light oils and 30% FAME (Fatty Acid Methyl Ester). In response, the Group’s Burner Division de-
veloped a
new series of F30 biofuels burners
, significantly reducing NO
x
emissions and surpassing regulatory standards.
Ariston Group is working on low-emission solutions that increasingly incorporate biogas and renewable fuels in its product
offering. The Company is engaged in
ongoing testing with alternative fuels
, including trials in France to
elevate the renew-
able fuel component to higher percentages
. In Germany, the UK and the Scandinavian region,
biofuel derived from hy-
drotreated vegetable oils (HVO)
is already used for burners, representing one of the solutions that will allow to reduce
CO
2
levels. Efforts to spread awareness on this solution are underway in Ireland, a critical market for the Group’s burners
integrated into boilers, also working in collaboration with industry associations such as EHI (European Heating Industry).
The recovery of energy from Industrial waste gases:
A joint venture in Belgium secured a pivotal project for an energy
recovering plant involving the
installation of three 24 MW Duobloc Low NOx Burners on a 72 MW water tube boiler
,
designed to burn a syngas, the industrial waste gas resulting from the production plant. Burners are tailored to efficiently
combust the syngas supplied at a low pressure of 80 mbar while adhering to the stringent NO
x
limit of 72 mg/Nm
3
. The
source of the syngas supplied to the burners - a mixture of carbon monoxide and hydrogen - originates as a by-product
from the
production of carbon black
, a critical additive in lithium-ion batteries and fuel cells. Traditionally disposed of
through thermal afterburning, this syngas will serve as the
primary energy source for the new plant
. The primary objective
of this venture is to generate 29 MW of electricity to power a production site in Belgium, as well as to provide energy to
several surrounding households.
Hydrogen-compatible demoboilers:
Ariston is developing a boiler capable of
running 100% on hydrogen
. This project
represents a technological advancement as currently there are no cities running on a 100% hydrogen network, making
this project more about
pushing technological boundaries
than an immediate commercial release. The key component is
the “demoboiler," designed to undergo
rigorous certification processes
to allow their installation
in pilot projects
.
Moreover, Ariston collaborates with the
Polytechnic University of Milan (PoliMI)
. In December 2023, Ariston and PoliMI
formalised a
funding proposal
, backed by the Italian Ministry of Ecological Transition (MITE), to explore and develop
hydrogen-based technologies
, working towards the elimination of gas pumps and boilers. The collaboration extends be-
yond immediate projects, with ongoing discussions about the prospect of establishing a
global renewable laboratory
.
63
Solutions: Smart homes for sustainable living
The ambition to 2030
2030
Long-term target
Progress in 2023
Status
Over 5 million connectable products sold
1,275,000
(staring from 2015)
WIP
2025
Mid-term supporting initiatives
Progress in 2023
Status
> 2 mln of connectable products sold
1,275,000
(staring from 2015)
WIP
2023 milestones
One Ariston NET app:
Ariston NET is the smart app designed to manage customers’ thermal comfort solutions, by provid-
ing a user-friendly interface for easy control, consumptions optimization and quick assistance. In 2023, the Group con-
solidated the functionalities of two separate applications, one dedicated to water heating and the other to heating prod-
ucts, into a unified app. The integration into a single app has the goal of simplifying the users’ experience, allowing them
to efficiently access and leverage these services. This integration will also ensure that the app is ready to incorporate
future functionalities, including
Demand Response
and
Home Energy Management
.
Once products are paired with smartphones, Ariston Net provides a range of features to control products including:
•
Save Energy and sustainable living
: Providing users the ability to monitor energy usage and adapt behaviours.
Every month, users receive a
personalised report
detailing their energy consumption and CO
2
saved. This infor-
mation makes it possible to optimise energy usage, resulting in
savings of up to 25%
.
•
Easy Control
: The app enables end-users to remotely control devices, by setting schedules, changing operation
modes, adjusting heating and hot water temperature. Moreover, leveraging AI technologies, the
Smart Schedul-
ing
function observes user habits, by creating personalised weekly schedules. Incorporating
geo-fencing
, the
system adjusts temperature based on users’ location and the
Optimum Start
feature was added to recognise a
home’s thermal characteristics to preheat it accordingly, while optimising energy consumption.
•
Prompt assistance
: In case of system failures, homeowners promptly receive
real-time notifications
indicating
the error number and the corresponding description, to facilitate
remote technical assistance
. Furthermore, the
AI-enable
Active Care feature
anticipates pressure drops and alerts users, preventing potential blockages and
ensuring uninterrupted comfort.
Tailored Energy Reports:
Ariston Group is committed to expanding its customer base by fostering a sense of environmen-
tal responsibility. As part of this purpose, the Group introduced its monthly Energy Report 2.0 initiative, which marks the
evolution of the energy report launched in 2018. It now encompasses a broader scope: aside from including additional
brands and markets, it quantifies CO2 savings and correlates them with the equivalent number of planted trees. Further-
more, it leverages AI technologies to analyse trends in monthly energy consumption, as well as individual behaviors and
weather conditions impacting such trends. The transition from generic advice to tailored and seasonally adaptive recom-
mendations is a key aspect of this initiative.
Ariston Net Pro:
the Ariston NET PRO app empowers professionals to deliver top-tier service to customers, ensuring ef-
fective and timely support. The app goes beyond conventional solutions by fostering
operational efficiency
through the
remote monitoring
of installed systems. Leveraging AI technologies, the platform predicts potential faults,
allowing Service
Centres to proactively optimise their workload
, thereby providing an added layer of reassurance to customers.
Moreover, the platform
extends beyond mere error management,
as it can be leveraged by professionals to
become the
end-user energy consultant
. In fact, it enables remote parameter optimisation, and it identifies critical installation to
improve products efficiency, all avoiding onsite visits. By offering these advanced functionalities, the platform empowers
professionals to continuously improve the service they provide and
enhance energy efficiency without compromising on
comfort
, ultimately leading to high levels of customer satisfaction.
64
Operations: Resource Productivity and Circularity
The ambition to 2030
2030
Long
-
term target
Progress in 2023
Status
-42% Scope 1 and Scope 2 absolute GHG emissions
(2021 base year)
-15%
(vs 2021)
-15%
(vs 2021)
At least -50% Scope 3 GHG emissions per million-Euro
value added (Economic Intensity Target, 2021 base
year)
13
-29%
(vs 2021)
-29%
(
v
s 2021)
Sustainable Packaging
1.
Use of packaging only if unavoidable
2.
Removal of smaller packaging likely to be littered
3.
Adapted to size and volume of the product
4.
100% Recyclable
5.
Avoid plastic when possible with >35% recycled
plastic
6.
Contains no hazardous substances
a.
Contains information on its mate-
rial content
New Target
Alignment in progress for:
-
All packaging for French market
-
Selection of the Packaging for
UK market
2025
Mid
-
term supporting initiatives
Progress in 2023
Status
Resource productivity
100% of production plants with energy efficiency im-
provement initiatives in place by 2023
100%
Com-
pleted
Green Energy procurement increase in key countries
China and Mexico have achieved
almost
100% of their electricity sourced from re-
newable energy, as verified through En-
ergy Attribute Certificates (EACs).
WIP
Zero waste to landfill by 2030
11% due to extreme event in Genga plant
(flood), which generated a significant
amount of “disaster waste”
+9%
2022 baseline
recalculated
and amended
to 2%
Ensure a more efficient use of water in our operations,
by reducing water discharge and increasing treated wa-
ter to be returned into the ecosystem
Monitoring program in place for all the
Group’s plant
WIP
Circularity
Carry out assessments of the recyclability levels of our
packaging, as part of the Sustainable Packaging Defini-
tion
New target
2023 milestones
The Group’s decarbonisation strategy:
Ariston Group has set an ambitious
carbon reduction program,
which is currently
in validation process by Science Based Target initiative (SBTi). The baseline was set for 2021 and calculated with reference
to the Greenhouse Gas Protocol. This first step was
necessary to determine the Group’s carbon footprint
through a calcu-
lation of its Scope 1, 2 and 3 emissions. The baseline made it possible to define
specific and quantitative decarbonisation
targets
based on current climate science, namely, to reduce
Scope 1 and Scope 2
absolute emissions by
42%
and
Scope 3
emissions by at least
50%
per million-Euro value added by 2030.
The second step involved the
mapping of decarbonisation levers and impacts
, among which energy efficiency measures
(especially in production plants), increase in the procurement of renewable energy and development of more efficient
technologies and solutions to offer in the product portfolio. Finally, a
co-creation process with internal stakeholders
was
implemented in order to define the forward-looking decarbonisation strategy.
13
Economic intensity, meaning Total CO2 emissions/EBITDA. CO2 Emissions from use of sold products covering at least 67% of total Scope 3 emissions.
65
The Group’s progress towards emission reduction
(tCO2e)
2023 (Excl. WB)
(tCO
2e
)
2022 (tCO
2e
)
2021 (tCO
2e
)
Status (2023 vs
2021)
Scope 1 emissions
41,656
46,447
47,513
-10%
Scope 2 emissions
36,022
44,011
43,726
-18%
Scope 3 emissions
14
(use of sold products)
77,726,175
86,736,744
95,415,326
-10%
Economic Intensity Target
196
218
277
-29%
In terms of progress achieved so far, from 2021 overall
Scope 1 emissions have slightly decreased
in 2022
due to the fact
that there was an increase of testing activities in laboratories; in 2023, a stronger impact was seen thanks to the imple-
mentation of energy efficiency measures in all plants. Moreover, Scope 1 emissions have decreased due to reduced usage
of lower GWP blowing agents in selected factories within the Group. The decrease in
Scope 2
emissions is also linked to
the adoption of renewable energy sources for electricity in plants located in China and Mexico, verified through Energy
Attribute Certicates (EACs).
Similarly, a decrease of 29% in indirect emissions (
Scope 3
) has been observed, partly thanks
to the introduction of
the R32 refrigerant
15
, overall improving GHG intensity of heating heat pumps and consequently
leading to a reduction of emissions resulting from their use by consumers. Additionally, the decrease in Scope 3 emissions
is also influenced by shift towards a different product mix, featuring a higher proportion of products with lower green-
house gas intensity.
2023 saw the integration of Wolf-Brink data into Scope 1 and 2 calculations as per featured in the table below:
(tCO2e)
2023 (Incl. WB)
2023 (Excl. WB)
Scope 1 emissions
50,276
41,656
Scope 2 emissions
45,431
36,022
Ariston Group has improved its calculation methodology in 2022 and 2023 of several Scope 3 categories from its baseline
year. In 2024, the impact on the baseline of these changes in methodology as well as of recent acquisitions will be as-
sessed, and if it is deemed significant (5% or larger of total base year emissions), the Group’s base year and target will be
recalculated, according to the baseline recalculation policy.
The Group’s key decarbonisation levers
•
In order to
reduce Scope 1 emissions
, levers include: the implementation of interventions on compressed air
(replacement, revamping or improvement management), buildings (insulation), heat recovery and heat volume
reduction, temperature management, installation of inverters, locating air leaks and the definition of a plan to
resolve them, illumination (both replacement and management), as well as installation of meters and data col-
lection system. Other levers include the integration of new installations and machineries, the enhancement of
renewable energy systems for on-site energy generation, the implementation of electricity shut-down power
saving applications and the gradual electrification of main processes and the corporate fleet.
•
In line with its goal of
reducing Scope 2 emissions
, the Company is looking to increase the percentage of renew-
ables in its energy mix. Some Italian plants have already undergone asset renovation and have been fitted with
PV (photovoltaic) roof panels
to produce energy for self-consumption. Additional investments are envisaged in
the upcoming years in this sense. In Germany, a
renovation project for office roofs
has started, including the
Wolf facilities in Auhof and Holledauer. The focus of these renovations extends to improving the insulation of
roof surfaces and contributing to enhanced energy conservation within office spaces. Simultaneously, the
refur-
bishment of factory roofs
is underway in Mainburg, with a subsequent installation of
photovoltaic systems
. Last
but not least in 2023, factories in China and Mexico achieved a significant milestone by utilising 100% electricity
sourced from renewable energy, a consumption verified through Energy Attribute Certificates (EACs).
•
In terms of
Scope 3 emissions
, evidence indicates that the largest proportion of the Group’s emissions stem from
the
downstream use of products
, with a minor component resulting from
purchased goods and services
. Key
14
Scope 3 emissions refer only to the use of sold products category. For upstream and downstream Scope 3 emissions, please see Company Report 2023 dedicated sec-
tion, on the Ariston Group website.
15
R32 is a type of hydrofluorocarbon (HFC) refrigerant commonly used in air conditioning and heat pump systems, which is known for having a lower global warming po-
tential (GWP) - a measure of how much heat a greenhouse gas traps in the atmosphere over a specific period of time, usually 100 years, compared to carbon dioxide.
66
levers at the Group’s disposal to address sold product emissions include leveraging on renewable technology
solutions, as well as the reliance on refrigerants with lower global warming potential as a means to improve
product efficiency. Emissions stemming from purchased goods and services, instead, will be tackled through a
renewed supplier relationship management and engagement model based on an ESG approach.
Energy efficiency across production facilities and plants
Efficiency in existing production sites:
In line with the goal to start energy efficiency initiatives across all Group plants in
2023, the following activities have been completed or are in the final stages of implementation:
-
Implementation of
advanced insolation techniques
in oven enamelling processes, oven flange tubes and painting
ovens to minimise heat loss;
-
Introduction of
modulator oven burners
, utilising cutting-edge technology to optimise combustion;
-
Upgradation to
energy-efficient lighting systems
across the factory premises, parking and locker room areas,
which also contribute to improve visibility;
-
Introduction of
new compressors
with optimised features and integration of
new valves
in the compressor de-
partment to enhance operational efficiency;
-
Vigilant identification and prompt rectification of
factory leaks
to prevent energy waste;
-
Installation of
new energy-efficient heating systems
in office spaces, to ensure a comfortable working environ-
ment while minimising energy usage;
-
Implementation of a
revised timing schedule
for the production of certain products to align with periods of lower
energy demand;
-
Integration of measures to recover and enhance the performance of Polyurethane (PU) insulation, promoting
energy conservation;
-
Implementation of
heat recovery systems
and measures to reduce gas consumption;
-
Strategic reduction of energy consumption per unit (kWh/Pcs) based on a targeted benchmark and elimination
f unnecessary fixed consumption.
The aim is to
adopt and replicate
the above-mentioned activities across all company locations, ensuring that decarboni-
sation efforts are uniformly applied.
Heat and energy recovery in the enamelling process:
The enamelling process in the Group’s production plants envisages
the application of a resistance glass layer to the product’s metal surface to make it smoother and create a protective
barrier against the corrosive action of water and humidity. In order to melt the glass and ensure proper adhesion to the
metal surface,
high temperatures must be reached
, which in turn release fumes at temperatures of around 450-500 °C.
In 2023, the Group implemented a project in one of its Italian plants, whose primary objective is to
recover the energy
available from chimneys through an air-to-air exchange system
, recycling the heated air to preheat boilers. Overall, the
project has achieved a notable
15% reduction in the average energy consumption
, marking a significant step towards
enhanced energy efficiency in the Company’s production facilities.
Leak avoidance:
The Group has invested in a highly advanced tool for detecting air leakages in production facilities to
autonomously map the leakage points and fix them. Periodic self-managed detection campaigns are conducted across an
increasing number of European production facilities to bring compressed air leakages under control. The primary objec-
tive – in line with the WCM approach – is to achieve a 50%
reduction of compressed air loss
.
To reach this, an advanced instrument has been procured: the
Fluke ii900 Industrial Acoustic Camera
. Equipped with an
array of microphones to ensure a broad field of view, this camera enables the maintenance team to quickly and accurately
pinpoint air, gas and vacuum leaks, even in noisy environments. Thanks to this tool, the Company is able to
preliminarily
self-detect leaks
and draft a detailed report with all the found leakage points enclosing captured images, organized in a
pareto based on the gravity. Maintenance team can organize the fixing activities based on the received report and main-
tain under control the number of losses due to air leaks.
Energy consumption monitoring:
In order to manage and lower energy consumption, it is critical to monitor these trends
in the first place. While the Chinese plant already monitors consumption, 3 production plants in Italy benefit from a
metering network
connected to a telemetering system,
which to date covers approximately 60% of resource consumption
.
By 2025 the goal is to increase the metering tools needed toward the achievement of 100% of energy consumption
monitoring for the rest of the plants. This initiative allows to set the foundation for
analysing trends
and
implementing
corrective actions
. Moreover, this integration is key for obtaining the official recognition related to
energy-saving inter-
ventions
(such as ”Certificati Bianchi” in Italy), also known as Energy Efficiency Certificates.
67
Reshoring activities:
Ariston Group is looking to
bring its production bases closer to its end markets
, in order to minimise
the risks associated with potential supply chain disruptions and
reduce the carbon footprint resulting from its global
operations
. The plan ensures
proximity between production units, supplier bases and the end markets
towards which
products are destined. Concrete examples include the Velis electric storage water heating product,
whose production
was recently launched in Italy
. Similarly, 2023 saw a substantial increase in the share of
heat pumps manufactured on the
Italian market
, with Albacina emerging as a key production site, complementing the one in Wuxi, China. This approach
will cut down logistics costs and impacts by shortening the supply chain and selecting local suppliers, overall
contributing
towards a reduction of the Group’s Scope 3 emission
.
Increasing production capacity for more efficient product lines:
It is predicted that
heat pumps sales would need to triple
by 2030
, leading to a 30% reduction in global fossil fuel use in buildings
16
. In response, the Group is
increasing its produc-
tion capacity
, focusing on heat pump production and on products which rely on renewable sources of energy. Significant
investments have been made to
expand the production capacity
of Italian production sites, to develop more energy effi-
cient product lines such as the propane-fuelled Hybrid Heat Pump (HHP) lines, thanks to the acquisition of Centrotec.
Investments were also directed towards efficient production lines for
heating heat pumps
in Italy and China.
The World Class Methodology:
Ariston Group implemented the
World Class Manufacturing (WCM) methodology
in 2011,
a program to create a structured and replicable production system able to consistently
reduce all type of wastes and
losses
. The methodology requires a constant monitoring and prevention of waste and losses, with the goal of improving
the quality, safety, cost and environmental performance of the production process.
Overall, in 2023 the WCM program was
extended to cover all the Group’s facilities
, introducing a
classification system
based on the implementation level achieved
(beginner, intermediate and advanced). This classification enables optimised
efforts and the introduction of tailored improvement plans based on the operational complexity of each plant.
Osimo
, in
particular,
has made significant strides forward
, successfully passing the audit in September 2023 for the achievement of
the
silver status award
. The audit, conducted over a three-day period by an external provider, certifies on-site competen-
cies in Lean Manufacturing, the extent of process improvement expansions and the attainment of high standards of op-
erational performance.
Moreover, in 2018 Ariston Group embraced the
World Class Logistics (WCL) methodology,
which constitutes
a shared
approach
streamlining processes across the Group’s warehouses at a global level. Fully operational in
two finished goods
warehouses,
the WCL creates a replicable logistics system based on the goal of improving customer service levels, safety,
costs and environmental performance, also thanks to a monitoring system and procedures for the prevention of waste
and losses. 2023 saw the
kick-off of the program in two additional warehouses
, marking a proactive step towards extend-
ing the benefits of WCL to a broader number of facilities
Waste and water management
Waste management:
In Europe, Ariston Group classifies each type of waste to identify specific European Waste Codes
and customises treatment methods accordingly. The Group holds the
ISO 14001 certification
- renewed in 2023 - and its
European production plants have adopted a standard for assessing the
environmental impact of waste
17
. Throughout this
comprehensive assessment, Ariston Group ’s production plants are able to demonstrate
low waste-related impacts
, gen-
erating less than
5% hazardous waste
and achieving a
96% revalorisation
of total waste in Europe.
The sites of the latest acquisitions have also initiated a project aimed at achieving the ISO 14001 certification, with a
deadline set for 2024. This effort aligns with the Group’s ongoing commitment to certify an increasing number of pro-
duction facilities.
Within the production process,
waste can be categorised into two primary groups
: first,
packaging waste from raw mate-
rials
, encompassing items such as cartons, plastic bags and wooden pallets and second, the
manufacturing scraps
gener-
ated by the production process, including metal cutting scraps, non-conforming work in progress or finished goods. Ac-
cording to the
5R methodology
, waste reduction projects are prioritised by:
1.
Refusing
the use of any unnecessary materials;
2.
Reducing
waste production by recovering waste as by-products, designing high-quality products with longer lives
and efficient packaging;
16
IEA (2022): Technology and innovation pathways for zero-carbon-ready buildings by 2030.
17
This evaluation considers various factors, including volume trends, environmental sensitivity based on the percentage of waste disposed, legal requirements aligned with
plant authorisation categories, stakeholder involvement (with a keen consideration of community interests), the affected area's extension and the reversibility of impacts.
68
3.
Recycling
metal, plastics, cartons, electrical components, etc.;
4.
Reusing
packaging in partnership with suppliers, reworking non-conforming products to reuse tanks and other
metal components, selling wooden pallets for repair and reuse;
5.
Revalorising
waste through energy recovery and assessing available technology to treat non-recyclable materials
such as polyurethane foam to maintain energy efficiency of the Group’s boilers.
Based on the Group’s strategy to meet ISO 14001 requirements, Ariston set an annual corporate objective of
decreasing
IRT
(waste volume/production pieces) by 2%, achieved through various local initiatives including:
-
The
Albacina
site replaced
singe use wiping cloth with a reusable version
, decreasing the volume of clothing
contaminated by hazardous substance to be disposed in 2023
by 30%.
-
The
Wuxi
,
Hanoi
and
Saint-Petersburg
sites successfully
utilized reusable plastic containers
for both receiving
products from suppliers and distributing them through intercompany sales, avoiding the use of over 30 tonnes
of cardboard.
-
The
Namur
and
Chartres
sites upgraded their painting process to decrease the use of paint powder by 30%,
therefore also
reducing packaging and process waste by 30%.
Water management:
The
ISO 14001 certification
, the
Group HSE Policy
and the
WCM methodology
are the same guidelines
also followed by the Company when it comes to water management throughout its operations. Water is withdrawn from
the municipality and from wells and is used for cooling, surface treatment in steel manufacturing plants, finished goods
testing and for civil use. The water is subsequently released into sewers or directly into the environment, depending on
its use and treatment necessities. All the production sites that release water into rivers are equipped with
internal chem-
ical and physical filtration processes
, in accordance with the applicable environmental requirements.
To reduce water consumption, the Group focuses on
decreasing water use in production processes
, improving
reuse
practices
and
reducing the use of tap water
through withdrawal from wells. 83% of the water withdrawal of the Company’s
ISO14001 certified plants is
directly pumped from ground water that is not drinkable
. Moreover, all of Ariston Group ’s
production plants strictly abide by local regulations that control the quality of discharged water through periodic moni-
toring. Any deviations are recorded in the internal audit and the
HSE action tracker
. Additionally, in accordance with
Ariston Group ’s incident management policy, any legal non-conformity or water pollution must be treated as a major
environmental issue and immediately notified to top management for impact mitigation.
The impacts of the
use of water
by the production plants of Albacina, Cerreto, Genga, Namur, Osimo, Conce, Saltillo,
Arcevia, Resana and the Fabriano laboratory are monitored on industrial, civil and rain waters. This assessment high-
lighted that 82% of the water extracted from groundwater by the production sites mentioned above is not potable. As-
sessment is also carried out on
water discharged
in order to verify its ecological status (water quality), its compliance to
the legal requirements applicable to each plant, its conformity to stakeholders expectations (like the neighborhood, cus-
tomers, owners, etc.) and the consequences of an incident such as its reversibility and the geographical area which would
be affected. Initiatives to reduce water consumption across plants include:
-
the Cerreto site replaced its compressor cooling systems with air-cooling ones;
-
the Wuxi plant reduced the water consumption of the tube forming production unit by 1000 L/day with recycling
water;
-
the Saltillo plant trained 100% of workers on responsible water usage, as well as identifying 100% of leaks and
increasing the use of treated water in green areas by 10% since 2022.
The Group also focuses on
increasing the quality of the water discharged
. For example, in the
Hanoi
site the Chemical
Oxygen Demand (COD), the total nitrogen and the total phosphorus contaminants significantly decreased thanks to the
upgrade of the water treatment station.
The adoption of more circular and products
Transparency and traceability in product materials:
As a continuation of the initiatives launched during the effort to en-
sure compliance with the
AGEC law
, where the Group extensively mapped levels of recyclability, recycled materials, rare
earth elements (e.g., scandium, lanthanum, cerium, neodymium, etc.), precious metals (gold, silver, platinum, palladium)
and dangerous substances, a comprehensive data management project has been initiated. This broader effort aims to
analyse the key data collection and management processes, establishing governance structures and enhancing integra-
tion with existing platforms.
69
The objective is to
streamline the handling of increasingly specific data
, making it more accessible and immediate. With
a particular focus on materials used in products and components, the project also seeks to
enhance the availability of
crucial information to reinforce the Group's circular approach
. In fact, the data collection carried out represents the first
step for the deployment of
circularity practices
, as it allows to identify circular opportunities and to raise awareness in
terms of resource consumption, with a potential to be further implemented into different areas of the business. This
analysis also helps to improve the
transparency
and
traceability
of raw materials in the supply chain, as well as to
strengthen the collaboration with suppliers around ESG topics.
Product-related data management:
Ariston Group formulated a comprehensive Product Life-cycle Management (PLM)
strategy to ensure the application and dissemination of
best practices throughout the entire life cycle of the product
. This
strategic approach encompasses the management of a product - throughout its entire life cycle - from its design and
development to its service and disposal. The implementation aims to enhance the time-to-market, product cost-effec-
tiveness and fluent data management, which will in turn allow to monitor environmental impacts and establish circularity
targets.
In 2023, the focus has been on extending the PLM platform, by
releasing core system features
and making the system
available to all R&D hubs across the Company. Looking ahead to 2024, the Company plans to
further expand the function-
ality of the PLM system
with a specific emphasis on new areas, including product disposal management. This strategic
timeline reflects the gradual evolution and integration of PLM into Ariston Group 's operations, emphasising a commit-
ment to sustainability, efficiency and innovation.
Life Cycle Assessment (LCA) and Environmental Product Declaration:
Ariston Group is committed to transparently com-
municating the environmental impact of its products throughout their lifecycle, thanks to the adoption of an Environ-
mental Product Declaration (EPD).
As early as 2017, Ariston Group began working towards the PEP ecopassport: the PEP (Product Environmental Profile),
registered under the PEP ecopassport® Program, is a type III environmental declaration that meets the ISO 14025 Stand-
ard and is based on the LCA methodology.
After having certified 10 products, in 2023 the Company has invested in assessing the impact of
3 addictional Life Cycle
Assessment
on heating heat pumps, condensing boilers and hybrid solutions. In 2024, the Group will undertake various
initiatives to start integrating product eco-design considerations within its R&D framework. To support this effort, the
Company will introduce
advanced Life Cycle Assessment (LCA) software solutions
, complemented by comprehensive
training for design engineers. These tools are already being seamlessly integrated into Wolf’s Development Process, en-
abling engineers to conduct accurate and detailed carbon footprint calculations at various stages of product develop-
ment.
Remanufacturing Printed Circuit Boards (PCB):
Reconditioning offers a multitude of benefits
that align with the principles
of circularity and economic efficiency, by extending the useful life of components, reducing the environmental impact of
the finished product and increasing the availability of spare parts. PCB stands for
Printed Circuit Board
, an insulating board
on which electronic components such as resistors, capacitors and chips are soldered or mounted, providing an efficient
and convenient way to electrically connect the components of an electronic device.
In line with its circularity efforts, throughout 2023 Ariston Group has defined all the processes required to
recover some
types of PCBs from products under warranty and give them a second life
. Once worn-out parts are collected, the latter
undergo a
testing phase
to detect potential issues and then
remanufactured
with the aim of creating a stream of recon-
ditioned parts to be used as warranty replacements or to be sold together with standard parts. Throughout the year,
agreements with external suppliers have been successfully signed
and a
pilot project
is currently underway on the Italian
market. Looking forward, Ariston Group is exploring various options to
replicate
and
expand the scope
of this innovative
project.
Sustainable Packaging initiative:
Driven by the constantly evolving regulatory landscape
18
, by increased customer de-
mands and by the ambition to decrease the impact of its packaging, Ariston Group is actively researching
alternative
solutions
that represent more sustainable procurement choices. This becomes evident from the release of the Sustainable
Packaging definition. In order to achieve this, the Company has launched a
project aimed at monitoring and tracking its
18
This landscape is evolving both at the EU level, with the Proposal for a Packaging and Packaging Waste Regulation (PPWR) which outlines stringent requirements, encom-
passing the composition of packaging substances, minimum recycled content in plastic packaging, overall packaging and empty-space minimisation, labelling and composi-
tion transparency, as well as defining reuse targets for transport packaging. The Regulation is expected to come into force in 2024. At the national level, France will adopt
an EPS packaging ban starting from 1 January, 2025.
70
packaging-related data to set a performance baseline.
This baseline involved an accurate analysis of the different packag-
ing types (such as carton boxes, packaging fittings, labels, manuals, expanded polystyrene, etc.) deployed per product
family across a number of production facilities.
As a result of this assessment, the Group is currently in the process of
defining various initiatives to improve the recycla-
bility of packaging in general
,
increase the share of recyclable packaging and recycled plastic
,
remove smaller packaging and
minimise the use of plastic or avoid it where possible
. The initial assessments of the recyclability levels of the packaging
have been conducted and will continue throughout 2024, with the aim of outlining a more responsible use of materials
that facilitates waste reduction, while ensuring compliance with recyclability principles defined by the European Commis-
sion. The most pressing issue that the Group is currently addressing is the replacement of EPS with recyclable materials,
aligning with French regulations and sustainability goals shared with specific clients.
At the same time, other best practices have already been implemented within the Group. For example, Thermowatt is
implementing a forward-looking initiative centred around the
development of plastic-free packaging across its European
plants.
The project is focused on eliminating polystyrene from the packaging of thermostats and resistors and the intro-
duction of sustainable solutions to progressively replace bubble wrap and adhesive tapes with paper-based solutions.
Other initiatives are currently under evaluation, such as potentially adopting extensible film with a percentage of recycled
material and PLA (bioplastics) or paper bags to replace plastic ones. Following an initial phase of research and testing for
the creation of the first prototypes, the Company is currently conducting
production trials and transport tests
to assess
the effectiveness of these solutions, which will drastically reduce the use of plastic in packaging materials.
In a parallel effort, Wolf has initiated a shift in the
plastic bags
used for the maintenance sets of gas/oil boilers. In fact, by
reducing the thickness by one third of these components and incorporating 95% recycled material, the Company antici-
pates significant savings in materials. The Company has also
introduced a stretched film which is thinner and with 50%
recycled content
, a strategic move which is projected to yield substantial CO
2e
savings.
Moreover, Wolf is addressing the environmental impact of its EPS packaging by investigating alternative packaging tech-
nologies such as moulded paper pulp, as well as the recycled EPS for specific products. One example is the CHA-16 heat
pump’s packaging part, which is made entirely from recycled EPS.
Operations: Responsible supply chain
The ambition to 2030
2030
Long
-
term target
Progress in 2023
Status
Align 100% of our strategic suppliers with our ESG jour-
ney
Ecovadis rating platform and IQ tools
for risk assessment in place
WIP
2025
Mid
-
term supporting initiatives
Progress in 2023
Status
Set ESG vendor rating criteria and policy for strategic
suppliers by 2023
Provider engaged ESG assessment in
suppliers’ pre-qualification phase in place
WIP
> 80% of products and services purchased from local
suppliers
70.5% (excl. Wolf-Brink)
the production of solutions featuring a lower localiza-
tion % has increased; we are working to enhance this
% in the near future
-1.5%
(vs 2022)
50% of strategic suppliers assessed on ESG perfor-
mance
To be started in 2024
2023 milestones
Supply chain due diligence
:
In anticipation of the upcoming due diligence legislation, the Group enhanced
sustainability
in procurement practices
by partnering with EcoVadis, a leading provider of business sustainability ratings. Through this
partnership, Ariston Group is able to map risks and opportunities, assess sustainability practices, monitor and track ac-
tions, as well as understand its performance and that of its suppliers.
71
In 2023, the Group started the development of a structured
ESG assessment of its strategic supplier base
for the identifi-
cation of criteria that suppliers are required to align with. The project involves the evaluation of supplier ESG performance
through a tailored rating score and the definition of a strategic approach which, in turn, leads to the definition of clear-
cut
improvement and monitoring plans
. In order to engage and score suppliers, the Company is working to develop effec-
tive supplier management tools, training initiatives, questionnaires and improvement plans.
Moreover, in addition to the rating activities
, supply chain risks are being mapped
to gain a comprehensive overview of
its supplier base. The collaboration, again with EcoVadis, is aimed at formulating a
sustainable procurement strategy
through an assessment of sustainability procurement risks. This evaluation considers three key dimensions:
1.
Sustainability risks
encompassing
environmental impact
,
labour practices
,
human rights
,
ethics
and
sustainable pur-
chasing risks
specific to the industry.
The assessment is based on the sector and the countries in which the company
operates. In fact, the industry risk is based on an analysis of relevance, intensity and observed risks.
2.
Procurement risks
considering the supplier's significance to the Company in terms of spending and criticality and
tracks related to financial, geographical, political dimension.
3.
Risk scan process
: once identified, risks are then positively or negatively mitigated through an ESG evaluation based
on publicly available documents pertaining to suppliers (e.g., ISO Certifications, Code of Conduct etc.), which in turn
are rated based on the category, type and validity over time (e.g., expiration date).
The
overall risk score
is therefore provided by weighting these three dimensions with the tailored ESG supplier rating
scores. Currently, the Group has planned to assess more than 200 suppliers, with the idea to expand to approximately a
thousand in the near future, encompassing both direct and indirect suppliers. In parallel, the foundations are being set
to
assess new suppliers
against a range of ESG criteria during the
pre-qualification phase
. The latter involves fulfilment of
applicable ISO certifications (i.e., ISO 45001, ISO 14001, ISO 9001, ISO 50001), indicating the accreditation for vendors
and providing answers to over 70 mandatory questions that include several ESG aspects. This questionnaire is in the
process of being implemented in the
Group's e-vendor portal
, a specialised platform that helps streamline the collection
of supplier documentation for their evaluation.
In terms of social and environmental aspects, suppliers are assessed on the existence of policies regarding working con-
ditions, labour relations and career management. Specific attention is paid to
child and forced labour, diversity, non-dis-
crimination and sexual harassment
. The environmental aspect extends to requirements of policy and targets on
energy
consumption
and
greenhouse gas emissions
, e-waste traceability, eco-design in product development, life cycle assess-
ments, etc.
The ethical dimension also involves queries about the
presence of conflict minerals
(tin, tantalum, tungsten or gold) and
the
existence of a policy or procedure specifically addressing these materials
, underscoring Ariston Group 's commitment
to avoid deploying minerals linked to conflict zones.
In parallel to these commitments, Ariston Group also plans to implement a
Sustainable Procurement Policy (SPP)
, a stra-
tegic framework guiding the procurement of materials, supplies and services based on their environmental and human
health impact.
Sustainable features for materials and components:
When it comes to raw materials and components, both sourced from
within and outside Europe, Ariston Group requires its suppliers to adhere to several
safety and environmental perfor-
mance requirements
.
-
The
RoHS Directive
(Restriction of Hazardous Substances) applies to a wide range of electrical and electronic
equipment, including household appliances and covers several hazardous substances with the aim to prevent
the risks posed to human health and the environment by the management of electronic and electrical waste.
-
The
POPs Regulation
(Persistent Organic Pollutants) also aims to reduce the environmental impact of certain
persistent organic pollutants, which are resistant to environmental degradation and accumulate in the environ-
ment, causing a negative impact on human health and the environment.
-
The appliances made by the Group are also subjected to the
REACH Regulation
(Registration, Evaluation, Author-
isation and Restriction of Chemicals), which covers virtually all chemical substances (hazardous and non-hazard-
ous) manufactured, imported and used within the EU market and comprises the Registration, Evaluation, Au-
thorisation and restriction of Chemicals. For all these requirements,
the Group requires its own suppliers to sub-
mit the related statement on a yearly basis at least
, in which they are asked to declare the compliance of their
components and update in terms of material composition or due to regulatory changes. These statements are
72
then checked by the Group’s Certification Division to ensure the compliance of suppliers with applicable require-
ments. The overall process ensures a clear mapping of materials and their composition, providing the Group
with an overview of the current status and updates.
-
Moreover, the Group started working on a roadmap in order to adhere to the new European
Drinking Water
Acts on the quality of water intended for human consumption that will be published in 2024.
A specific certification
process is being implemented to prove the conformity of various materials that come into contact with the water
resource (e.g. metallic, organic and enamel materials).
SOCIAL
The "Social" Chapter includes the “People & Communities” and “Customers” pillars along with Human Rights topics. While
“People” focuses on the Company internal personnel, “Communities” looks at the external communities in which the
Group operates globally. Business-to-Business (B2B) and Business-to-Consumer (B2C) relationship management is dis-
cussed in the Chapter “Customers”. The third section delves into Human Rights, highlighting the Company's human rights
mapping process as a crucial component of its due diligence journey with EcoVadis.
Principal risk and its management
RISK: inability to fully cover health and safety, engagement and development, and human rights protection (diversity and
inclusion, just and favourable working conditions, equal opportunities etc.) within the Group’s operations (employees)
and across the value chain (suppliers’ workforce, customers and communities)
PEOPLE & COMMUNITIES – Policies and mitigation actions
CUSTOMERS – Policies and mitigation actions
Human rights
-
Human Rights Policy
-
Human rights due diligence
-
Code of Ethics
-
Sedex "Supplier" membership for ethical trade
Employees’ matters
Health & Safety
-
Group HSE Policy
-
Group HSE Management System
-
ISO 45001 certification
Engagement and development
-
Recruitment & Selection Process
-
Remuneration Policy
-
Diversity Policy
Social matters
-
Group Quality Policy
-
Quality Management System
-
ISO 9001 certification
-
Testing protocols to identify product weaknesses
-
Technical Committees
-
Training for Service Centres
-
Expert Service App
-
One Team Portal for professional network
Focus on Human rights’ risk:
Human Rights Due Diligence:
Ariston Group is aware that
respect for human rights
needs specific oversight and manage-
ment tools, especially in regions with complex socio-political contexts, in which workers’ rights and the relationships
between business partners are not always disciplined by regulations equivalent to EU standards. The principles of legality,
dignity and equality expressed in the
Code of Ethics and Corporate values
, as well as the choice of partners with proven
reliability in managing local workers and suppliers, are the foundations on which the Group manages such issues. Each
entity within the Group ensures the
integrity of its employees
, guaranteeing working conditions that comply with human
rights and dignity. Prohibited practices include irregular and forced labor, employment of underage individuals, violence,
harassment, and false accusations.
In 2022, in view of evolving European disclosure requirements, which push companies to align long-term business oper-
ational and governance procedures with human rights and environmental considerations, the Group has initiated a
stra-
tegic approach to implement a human rights due diligence process
, firstly by mapping impacts brought about by the busi-
ness itself and identifying the most critical areas and countries. Said analysis has been based on international standards
such as the UDHR and ILO guidelines as well as proposed EU legislation (e.g. the Corporate Sustainability Due Diligence
Directive). As
high and medium-risk countries were mapped out, questionnaires and interviews have been carried out
alongside requests for evidence, where necessary. Based on these findings, the Group
has released a
Global Human Rights
Policy
, according to the United Nations Guiding Principles on Business and Human Rights (UNGP).
Although no specific
critical issues were found during the assessment phase, the Group has chosen to formalize its dedication to upholding
human rights, which were already partially addressed in the Code of Ethics. To enhance focus on particular areas and to
reaffirm the Group's commitment, specific measures, such as trainings, have been implemented.
During 2023, two incidents
73
of discrimination occurred. Both incidents were promptly addressed, and action plans were implemented. The remediation
plans focused on implementing diversity and non-discrimination awareness initiatives. Additionally, an employee was ter-
minated due to harassment, misconduct, and discrimination, while specific training and campaigns have been conducted
on the code of ethics, discrimination, and harassment.
In 2023, with the commencement of the collaboration with
Ecovadis
, the Group also shifted its focus to
supply chain due
diligence
, equipping itself with the necessary tools to enhance
transparency
and
control
over the ESG performance of its
suppliers, particularly with regard to human rights. A specific tool aimed at identifying the level of risk in the supply chain
has also been implemented, recognizing that such early-stage mapping requires a risk-based approach.
Ariston Group’s commitment for ethical supply chains:
In 2020, Ariston Group
became a part of the Sedex network
, a
platform in Europe dedicated to gathering and analyzing data related to the implementation of ethical principles through-
out supply chains. Sedex offers an online platform, as well as tools and services, to assist companies in conducting their
operations responsibly and sustainably. The primary focus is on
safeguarding workers and ensuring ethical procurement
practices
.
In 2021, the Group achieved Sedex's "Supplier" membership for ethical trade service providers, encompassing a total of
six production sites
: Genga, Cerreto, St. Petersburg, Wuxi, Namur, and Chartres. This membership entails completing a
comprehensive self-assessment and undergoing Sedex Members Ethical Trade Audit, particularly for facilities located in
countries categorized as "high risk." Subsequently, these high-risk countries participate in programs aimed at creating a
safer working environment for their employees. Detailed reports stemming from these assessments are readily accessible
for customers. This approach has persisted since the beginning of the collaboration, with audits occurring periodically.
People: excellent employee experience and engagement
The ambition to 2030
2030
Long
-
term target
Progress in 2023
Status
To be a certified a world class employer that builds a
sustainable working environment
Ariston Vietnam in the tops of the 100 Best
Places to Work
Ariston India honored with the Best Em-
ployer Brand Award 2023 for Maharashtra
State
WIP
2025
Mid
-
term supporting initiatives
Progress in 2023
Status
> 60% of managerial positions filled through internal ca-
reer paths
78% (excluding Wolf-Brink)
+19%
(vs 2022)
At least 30% female employees and at least 30% male
employees in Ariston Group Management team by
2030
24% (excluding Wolf-Brink)
22% (including Wolf-Brink)
Stable
(vs
2022)
2023 milestones
We are Ariston Group
One Team Company:
The global presence across 40 countries and its recent acquisitions have driven the Group to em-
brace a constant transformation, while
broadening the concept of diversity and inclusion
. Different cultures, nationalities,
backgrounds and skills are constantly brought together. It is on these bases that the Group pursues a
One Team Company
approach:
an inclusive workplace that seeks to create a sense of belonging to a unified company and equally respecting
its diversity.
In 2023,
the achievements of Ariston Group were made possible thanks to the contribution of its 10,769 employees.
This
number already considers the acquisition and integration of Wolf-Brink. As far as the workforce is concerned 78% are
male and 22% female employees, with 58% of the population falling within the 30 to 50 age range. 93% of employees
hold permanent contracts, and 90% work full-time. Part-time contracts account for 10% and are tailored to meet specific
needs of employees. Ariston Group welcomed 1,966 new hires in 2023, with 26% being women and 11% under the age
of 30
19
.
19
These figures already consider the acquisition and integration of Wolf-Brink
74
As the Group is strongly committed to promoting equal opportunities and diversity, the central HR team has spent 2023
planning and defining dedicated activities aimed at engaging and educating the workforce on these topics, disseminating
awareness. As a subsequent step, in 2024 more concrete and specific programs will be implemented.
Employee by gender and region
2023 (incl. WB)
2023 (excl. WB)
2022
2021
Female
Male
Total
Female
Male
Total
Female
Male
Total
Female
Male
Total
Americas
205
809
1,014
205
809
1,014
179
802
981
213
1,085
1,298
Europe
1,627
6,252
7,879
1,098
3,989
5,087
1,060
3,907
4,967
1,035
3,889
4,924
MEA and Asia
442
1,434
1,876
442
1,434
1,876
514
1,416
2,027
415
1,221
1,636
Total
2,274
8,495
10,769
1,745
6,232
7,977
1,753
6,125
7,975
1,663
6,195
7,858
Diversity of employees, by gender and category
b. Employees (%)
2023 (Incl. WB)
2023 (excl. WB)
2022
2021
Male
Female
Other
Male
Female
Other
Male
Female
Other
Male
Fe-
male
Other
White Collar
38%
16%
0%
36%
17%
0%
34%
16%
1%
34%
15%
0%
Blue Collar
41%
5%
0%
43%
5%
0%
43%
6%
1%
45%
6%
0%
Total
79%
21%
0%
79%
22%
0%
77%
22%
2%
79%
21%
0%
Diversity of employees, by age and category
b. Employees (%)
2023 (Incl. WB)
2023 (excl. WB)
2022
2021
< 30 y
30 - 50
> 50 y
< 30 y
30 - 50
> 50 y
< 30 y
30 - 50
> 50 y
< 30 y
30 - 50
> 50 y
White Collar
8%
33%
14%
6%
34%
12%
6%
33%
11%
6%
32%
11%
Blue Collar
6%
25%
15%
6%
27%
16%
6%
28%
15%
8%
28%
15%
*Total
14%
58%
29%
12%
61%
28%
12%
61%
26%
14%
60%
26%
Employee by contract, gender and region 2023 (Incl. WB)
2023 (Incl. WB)
Americas
Europe
MEA and Asia
Female
Male
Total
Female
Male
Total
Female
Male
Total
Number of permanent/ full-time employees
202
806
1,008
1,192
5,346
6,538
336
1,166
1,502
Number of permanent/ part-time employees
2
3
5
354
620
974
15
3
18
Number of temporary/ full-time employees
0
0
0
61
248
309
89
252
341
Number of temporary/ part-time employees
1
0
1
20
38
58
0
1
1
Number of non-guaranteed employees
-
0
0
0
0
0
2
12
14
Regional total
205
809
1,014
1,627
6,252
7,879
442
1,434
1,876
Employee by contract, gender and region 2023 (excl. WB)
B. Employees by contract gender and re-
gion*
Head count / Full Time Equivalent (FTE)
2023 (excl. WB)
Americas
Europe
MEA and Asia
Female
Male
Total
Female
Male
Total
Female
Male
Total
Number of permanent/ full-time employees
202
806
1,008
891
3816
4,707
336
1,166
1,502
Number of permanent/ part-time employees
2
3
5
171
93
264
15
3
18
Number of temporary/ full-time employees
0
0
0
28
55
83
89
252
341
Number of temporary/ part-time employees
1
0
1
8
25
33
0
1
1
Number of non-guaranteed employees
-
0
0
0
0
0
2
12
14
Regional total
205
809
1,014
1,098
3989
5,087
442
1,434
1,876
Employee by contract, gender and region 2022
Americas
Europe
MEA and Asia
Female
Male
Total
Female
Male
Total
Female
Male
N.D.
Total
Number of permanent/ full-time employees
176
801
977
812
3,690
4,502
364
1,103
83
1,550
Number of permanent/ part-time employees
2
1
3
181
113
294
0
0
0
0
Number of temporary/ full-time employees
0
0
0
60
82
142
123
340
14
477
Number of temporary/ part-time employees
0
0
0
7
22
29
0
0
0
0
Number of non-guaranteed employees
1
0
1
0
0
0
0
0
0
0
Regional total
179
802
981
1,060
3,907
4,967
487
1,443
97
2,027
Employee by contract, gender and region 2021
Americas
Europe
MEA and Asia
Female
Male
Total
Female
Male
Total
Female
Male
N.D.
Total
Number of permanent/ full-time employees
212
1,085
1,297
759
3,662
4,421
287
940
0
1,227
Number of permanent/ part-time employees
0
0
0
191
112
303
0
0
0
1
Number of temporary/ full-time employees
0
0
0
74
96
170
120
288
0
408
Number of temporary/ part-time employees
1
0
1
11
19
30
0
0
0
0
Number of non-guaranteed employees
0
0
0
0
0
0
0
0
0
0
Regional total
213
1,085
1,298
1,060
3,907
4,924
487
1,229
0
1,636
75
Workers who are not employees
2023 (Incl. WB)
2023 (excl. WB)
2022
2021
Total
896
761
1,020
1,032
Employee hiring rate, 2023 (Incl. WB)
2023 (Incl. WB)
Americas
Europe
MEA and Asia
Female
Male
Total
Female
Male
Total
Female
Male
Total
< 30 y
38
99
137
125
306
431
46
108
154
30 - 50 y
50
104
154
161
485
646
64
184
248
> 50 y
5
15
20
27
134
161
5
10
15
Total Hiring
93
218
311
313
925
1,238
115
302
417
Total employee number
10,769
Hiring rate
18%
Employee hiring rate, 2023 (excl. WB)
2023 (excl. WB)
Americas
Europe
MEA and Asia
Female
Male
Total
Female
Male
Total
Female
Male
Total
< 30 y
38
99
137
76
152
228
46
108
154
30 - 50 y
50
104
154
111
326
437
64
184
248
> 50 y
5
15
20
20
95
115
5
10
15
Total Hiring
93
218
311
207
573
780
115
302
417
Total employee number
1,0769
Hiring rate
14%
Employee hiring rate, 2022
Americas
Europe
MEA and Asia
Female
Male
Total
Female
Male
Total
Female
Male
N.D.
Total
< 30 y
14
91
105
78
168
246
41
75
41
157
30 - 50 y
22
76
98
127
324
451
62
180
11
253
> 50 y
6
11
17
22
72
94
4
10
0
14
Total Hiring
42
178
220
227
564
791
107
265
52
424
Total employee number
8,026
Hiring rate
18%
Employee hiring rate, 2021
Americas
Europe
MEA and Asia
Female
Male
Total
Female
Male
Total
Female
Male
N.D.
Total
< 30 y
24
311
335
84
198
282
26
75
13
114
30 - 50 y
29
193
222
101
315
416
53
144
13
210
> 50 y
3
15
18
11
55
66
2
4
0
6
Total Hiring
56
519
575
196
568
764
81
223
26
330
Total employee number
7,663
Hiring rate
22%
Employee turnover rate, 2023 (Incl. WB)
2023 (Incl. WB)
Americas
Europe
MEA and Asia
Female
Male
Total
Female
Male
Total
Female
Male
Total
< 30 y
31
131
162
77
178
255
49
86
135
30 - 50 y
33
132
165
95
331
426
74
169
243
> 50 y
6
30
36
45
205
250
7
32
39
Total
70
293
363
217
714
931
130
287
417
Total employee number
10,769
Turnover rate
16%
Employee turnover rate, 2023 (excl. WB)
2023 (excl. WB)
Americas
Europe
MEA and Asia
Female
Male
Total
Female
Male
Total
Female
Male
Total
< 30 y
31
131
162
43
81
124
49
86
135
30 - 50 y
33
132
165
78
246
324
74
169
243
> 50 y
6
30
36
37
134
171
7
32
39
Total
70
293
363
158
461
619
130
287
417
Total employee number
10,769
Turnover rate
13%
76
Employee turnover rate, 2022
Americas
Europe
MEA and Asia
Female
Male
Total
Female
Male
Total
Female
Male
N.D.
Total
< 30 y
23
196
219
52
92
144
30
54
33
117
30 - 50 y
44
196
240
95
274
369
47
150
17
214
> 50 y
5
52
57
41
172
213
12
31
0
43
Total Hiring
72
444
516
188
538
726
89
235
50
374
Total employee number
8,086
Turnover rate
20%
Employee turnover rate, 2021
Americas
Europe
MEA and Asia
Female
Male
Total
Female
Male
Total
Female
Male
N.D.
Total
< 30 y
21
294
315
33
93
126
24
43
0
67
30 - 50 y
25
178
203
68
234
302
47
148
0
195
> 50 y
3
19
22
25
138
163
0
9
0
9
Total Hiring
49
491
540
126
465
591
71
200
0
271
Total employee number
7,663
Turnover rate
18%
Average hours of training provided to employees, by gender
a. Average hours of training provided to employees
2023 (Incl. WB)
2023 (excl. WB)
2022
Male
Female
Total
Male
Female
Total
Male
Female
Total
White collar
13.5
11.5
12.5
10.5
10.5
10.5
15.8
14.1
15.0
Blue collar
10.3
4.5
7.4
12.2
5.4
8.8
3.8
4.7
4.25
Total
11.9
8.0
9.9
11.4
8.0
9.7
9.8
9.4
9.6
Integrating diversity & inclusion by giving voice to employees’ stories and talent
To give voice to its cultural diversity, Ariston Group leverages its internal communication tools to tell employees’ profes-
sional and personal stories, in the firm belief that each narrative contributes to enriching the Group’s identity. During
2023,
more than 20 people from 15 different countries
shared their experiences with their worldwide colleagues. More
specifically, these stories involved colleagues of
different ages, nationalities and background
s, and put a spotlight on
personal career paths, achievements and significant initiatives involving
female leaders.
Similarly, and with an eye to
generational diversity
, the latest edition of the
My Ariston Group program
designed for new
hires, saw 70 young talents from 13 different nationalities across the organisation showcasing in front of the Group’s top
management real business projects implementable in the company.
Wolf’s initiatives to create a diverse workplace
In 2023, Wolf concentrated its efforts to integrate gender diversity within the business culture
. Its commitment can be
summarised in two projects:
-
Diversity management:
in September 2023, Wolf signed the “Charta der Vielfalt”, a voluntary commitment to
promote the recognition, appreciation and integration of diversity into the Company’s culture
. The “Charta der
Vielfalt Association” is the biggest German corporate initiative and is under the patronage of German chancellor
Olaf Scholz.
-
Increasing women’s representation and advancement:
in July 2023, Wolf launched a network initiative to en-
hance the representation and progression of women within the organisation. The program commenced with a
kick-off event of all female leaders
, where they shared insights, identified opportunities and addressed challenges
faced by women in leadership positions. In a second meeting the female leaders had a
specific training session
focused on communication skills
specifically designed on the topics identified in the first meeting. Furthermore,
the network initiative of female leaders organized an evening event under the motto “Women take over respon-
sibility” to which all Wolf women were invited. The program included
interviews of leaders
as well as
interactive
theme tables
with different topics as for example how to manage career & family, how to act in social media etc.
77
Employees’ skills development and growth
Extending the Global Leadership Program (GLP):
The Global Leadership Program (GLP) is focused on improving employ-
ees’ competencies according to the approach outlined in Ariston Group’s Leadership Model: “
LEAD CHANGE
,
LEAD BUSI-
NESS
,
LEAD PEOPLE
”
. Launched in 2021, the initiative strives to strengthen leadership skills amongst employees from 25
different countries and foster a feedback culture.
Initially, the fully digital GLP was tailored for Executives and Senior Managers. The program was then extended to the
Mid-Management level and, in 2023, it involved
Individual Contributors and every new employee
, at any level, through 6
interactive modules composed by individual business coaching journeys, collaborative team learning sessions and online
content. 1,000 employees across the business have already completed the journey or are underway in doing so. To date
the program has been delivered in 8 languages.
Performance Management Process:
Ariston Group’s Performance Management Process
emphasizes transparent commu-
nication and employee involvement in goal setting and goals assessment. Focused on feedback and an
employee-centric
approach
, it fosters accountability and recognition and it identifies professional development needs.
In 2023 the Group
renewed its Performance Management Process
for white collar and executive permanent employees.
The first novelty entails the
connection between Performance Management and Short-Term Incentives (STI)
according
to which bonus payouts are now linked to both Group STI scorecards and Individual Performance scores, promoting a
higher commitment to individual goals and behaviors. This new approach aims to
align variable remuneration with short-
term Company performance results
, with STI Plan awards being directly linked and proportional to the actual achievement
of performance targets, in order to foster a culture of collaboration and teamwork at all organizational levels. Transparent
communication of the company's performance ambitions and the expected commitment from each individual is integral
to this approach.
The structure of the new Performance Management Process (PMP) involves three main phases:
Goal Setting, Mid-Year
Assessment and Overall Assessment
. Key changes in the process include also the enhancement of a centralised platform
and reporting for monitoring progress and create a comprehensive, fair, and consistent approach to performance man-
agement.
Mentoring program:
In 2023, Ariston Group unveiled the
Mentoring Program
, based on the concept that sharing
knowledge within the Company helps people grow both personally and professionally. It also envisages an approach to
skills enhancement designed to help mentees navigate challenges and prepare for future opportunities. In terms of ben-
efits, there are 3 ways in which mentorship helps with employee engagement: firstly, by providing opportunities for pro-
fessional development, tapping into the knowledge of more senior employees; secondly, by giving employees a voice to
speak with leadership, breaking down communication barriers; and finally, by building supportive working relationships
and promoting a growth-focused mindset.
Currently in the pilot phase, the program engages
10 mentors and 10 mentees
, carefully selected across geographies and
functions, with a view on gender balance.
Mentors undergo 4 comprehensive training modules
, equipping them with
core mentoring skills, conversational techniques and effective closing strategies.
Mentees
, on the other hand, benefit
from
modules focused on structuring conversations and setting goals
.
Learning and development opportunities through the MyLearning Platform:
An important tool in supporting employees'
developmental goals is Ariston’s
Learning Management System (LMS), the MyLearning platform
. This user-friendly online
hub serves as a central repository, integrating all corporate learning materials that range from in-person to digital courses.
All employees have access to the platform, allowing them to build their self-learning journey and participate in annual
corporate training sessions delivered online. In 2023, an average of 9.9 training hours per employee was delivered (in-
cluding Wolf-Brink; 9.7 hours excluding Wolf-Brink).
78
Upskilling programs for white collar employees
Objectives
Hours (per edition)
Global Leadership Program
To activate, support and strengthen practices associ-
ated with the competencies of Ariston Group Leader-
ship Model: LEAD CHANGE, LEAD BUSINESS and, most
importantly, LEAD PEOPLE
3
My Ariston Group
To support the induction of new employees with 6-12
months of experience, transferring knowledge on
business competencies and key Ariston Group pro-
cesses
40
Presentation effectiveness
To refine and improve the style, structure, content and
delivery of presentations, through the application of
effective techniques, practice and live feedback
22
Leading people for growth
To support recently assigned managers in leading their
teams and the achievement of the results through ef-
fective people management skills
20
Transition to General Management
To support the step up to general management with a
toolkit of skills and knowledge in order to gain the con-
fidence to manage the complexity of the transition
from specialist to generalist.
80
Fostering quality awareness and culture:
In 2023 the
Quality Awareness and Culture
project was launched by the Quality
Department, as one of the working streams of the Quality Roadmap. In collaboration with HR, an engagement program
was launched via the Group’s Intranet to help disseminate awareness amongst employees on quality tools, principles and
methodologies. Moreover, dedicated e-learning sessions on different subject matter (such as Six Sigma and ISO 9001) are
accessible to everyone through the Learning Management System.
Internalisation of critical skills and competencies
Addressing the risk of sourcing critical competencies, particularly across the STEM fields (Science, Technology, Engineer-
ing and Mathematics), requires
proactive measures
such as the
creation of technical or digital programs
within the Com-
pany alongside partnerships with educational institutions.
A combined vision to unify sustainable thermal comfort and digital innovation:
Ariston Group is one of the key players in
the
first edition of the Hardware & Software Codesign Academy
– a program at Polytechnic University of Milan dedicated
to the complex professional role of the hardware-software engineer. Designed for
24 future engineers
, the Academy
serves as a platform whereby theoretical knowledge is merged with hands-on expertise. Workshops and networking
events provide valuable opportunities for young engineers to learn from experts, collaborate and gain essential skills for
their future careers. Ariston Group and the Polytechnic University of Milan are also
addressing the demands of the digital
age
, a commitment that strongly resonates with the broader goal of the
energy transition
. By fostering research in crucial
areas such as heat pump and combustion technologies, this partnership ensures that the solutions of tomorrow are sus-
tainable and technologically advanced. Moreover, the Group seizes the opportunity to identify and recruit young talents,
ensuring a continuous inflow of skilled professionals into the industry.
Digital career program:
In the context of its digital transformational efforts over the past years,
the Digital Career Program,
arrived at its 4
th
edition
. In 2023, the program involved
16 graduates
hired across different roles, who embarked on a
6-
month training period
, during which they were engaged in company relevant projects and entrusted with specific objec-
tives. The increasing number of participants and company functions underscores the commitment of the business to
enhance digitalisation across the whole Group. The program is also part of the broader framework of supporting the
training and introduction of new skills that are critical for the future of the Company.
The Thermowatt Academy:
Ariston Group’s premier component brand,
Thermowatt,
launched its Academy in 2020 to
develop professional paths in the manufacturing world and to transfer technical know-how from Thermowatt’s produc-
tion sites to students from Italian technical schools, particularly in the Marche region. The Academy has expanded over
the years, becoming the systematic way of onboarding young professionals into the Company from both technical schools
(ITS) and undergraduate/pregraduate programs. The Academy will be expanded to include the other Group's brands.
In
2023
, Thermowatt geared up for its
4
th
edition
.
Students participated in comprehensive
training
covering essential
aspects such as safety protocols, quality standards, production processes, human resources management and mainte-
nance procedures. Additionally, field training sessions were conducted, focusing on mentoring, production techniques,
WCM and quality control. In total, participants received
32 hours of classroom training
, complemented by
100 hours of
on-the-job training.
79
Occupational health and safety management system
Health and Safety Management:
Ariston Group has established an
Occupational Health and Safety Management System
,
accredited by the British Standards Institution and
ISO 45001:2015 certified
. The latter integrates the Environmental and
Quality Management systems adhering, respectively, to the ISO 14001:2015 and ISO 9001:2015 standards. The Integrated
System is detailed in the
HSE Management Manual
, organised in a cyclical framework encompassing the planning, imple-
mentation, monitoring and review stages. This approach ensures uniform procedures and guidelines across all organisa-
tional levels. In 2023, with over
7623 (Excludind WB) and 11160 (Including WB)
thousand hours worked among employ-
ees, the Group recorded 30 injuries (Excluding WB) and 52 injuries (Including WB).
Communities: education for the future
The ambition to 2030
2030
Long-term target
Progress in 2023
Status
100% Countries engaged in projects that foster aware-
ness on sustainable thermal comfort as an enabler for
social development
Germany, Hungary, Italy, Spain, Israel, Mo-
rocco, Romania, Vietnam involved in dif-
ferent activities
WIP
2023 milestones
The Aristide Merloni Foundation:
In line with previous years, in 2023 the Aristide Merloni Foundation continued to play
an active role in promoting culture, education and economic development. On 6 February 2023, the book entitled “
Fran-
cesco Merloni: Il secolo dello sviluppo. Internazionalizzazione e coscienza territoriale
”
20
was presented at Palazzo Altieri in
Rome. The book focuses on Francesco Merloni’s industrial and political history and the presentation event saw speeches
given by author Giorgio Mangani, journalist Ferruccio De Bortoli, President Emeritus of the Constitutional Court Giuliano
Amato and RAI President Marinella Soldi. The tour resumed with events held in Milan at the Bocconi University, in Torino
and in Ancona in September.
In February, the Foundation collaborated with
Best of the Apps
and the
Higher Education Institute Merloni Miliani
for a
school-to-work alternation project. Over a 4-month period, students tackled critical aspects of e-commerce and pre-
sented solutions to improve its effectiveness. The award ceremony was held in June. The Foundation’s commitment to
education was further demonstrated in the context of
Economia Marche
, an historical economic magazine edited by the
Foundation. The annual
Marche Economy Lecture
was held in May, followed by the announcement of the awards for 6
winning theses.
In May, the focus shifted on energy efficiency with the event entitled "
Together for Energy Efficiency in Reconstruction
",
a collaborative effort between the Group and ANCE Marche, the representative body of building contractors in the region,
with an emphasis on sustainable rebuilding following the 2016 earthquake.
Future Campus Fabriano
is an innovation-oriented training course aimed at young people, which was held in collaboration
with Confindustria Fabriano in order to introduce young generations to the businesses present in the area. In its 2
nd
edition, beginner classes were organised for new entrants and senior classes for those who attended the campus in the
previous year.
Summer saw the 8
th
edition of the
Scientific Committee of the Aristide Merloni Foundation
, delving into the new EU’s
industrial policy and the ambition for technological and energy independence. The conference was opened by Adolfo
Urso, Minister for Enterprise and Made in Italy. Speakers included Maria Chiara Carrozza, President of the National Re-
search Council of Italy, Giovanni Gorno Tempini, President of Cassa Depositi e Prestiti, Arancha Laya Gonzales, former
World Trade Organisation Director General and Spanish Foreign Minister and former Prime Ministers Enrico Letta and
Romano Prodi.
As a Founding Member of the
Hub Abruzzo Marche Umbria
(HAMU), in 2023 the main topics addressed were the launch
of the innovation ecosystem for Central Italy, the contribution to the creation of a Private Capital company and a study
entitled “Energy for Central Italy”. The latter envisages, between 2023 and 2024, the creation of energy communities in
20
Francesco Merloni: The Century of Development. Internationalization and territorial awareness.
80
the territories of Abruzzo, Marche and Umbria, on the one hand, and a strategic partnership with other countries belong-
ing to the Adriatic-Ionian region, on the other.
In December a new educational initiative, undertaken in collaboration with the Merloni Foundation, is dedicated to en-
ergy efficiency and "green jobs." Targeting around 90 students, the project aims to train future technicians. Participating
schools include the I.I.S Merloni Miliani in Fabriano and the I.I.S Enrico Mattei in Recanati. Mario Salari, Head of Italy,
presented a comprehensive, long-term training program focused on channeling efforts and resources into green jobs,
increasingly vital for ensuring a sustainable future. Ariston Group is actively engaged, investing in the project to support
the education system with the aim of enriching students' training paths and guiding them toward a rapidly evolving mar-
ket. The students will have the opportunity to visit production sites in Fabriano and Osimo and to attend specialized
lessons.
Educational and awareness focused activities
Germany
•
ELCO's Youth Sponsorships
:
ELCO
hosts so-called "Tech Days": dedicated sessions aimed at bringing together
architects, planners, legislators and scientists to showcase innovative projects that can contribute towards
reaching the EU's net zero targets by 2050.
Moreover, ELCO engages with local communities, focusing on
youth
sponsorship and supporting sports and recreational activities for individuals and teams
. Indeed, this year alone
and in collaboration with their Installer Partners, ELCO supported 56 youth clubs in Germany.
•
Wolf employees engage in the annual
“Ramadama” clean-up action
to remove rubbish on the company's prem-
ises and surrounding areas. On 5 May 2023, employees volunteered to collect garbage in the southern Mainburg
industrial area. In occasion of the e-waste day on 14 October 2023, employees gathered small electrical devices
in collection boxes for a period of one month to ensure these were recycled.
Hungary
:
the
Nimbus Garden Veszprém Project
is a design installation located in a greenhouse where Mediterranean
plants are grown using renewable energy, including solar roof tiles and an Ariston Nimbus Pocket M-Net R32 heat pump.
The project is aimed at
increasing awareness on climate change and the importance of renewable energy
, as well as
promoting environmentally friendly and aesthetic designs. The installation showcases many innovative features, including
energy efficient heating and cooling systems.
Italy
:
in 2023, the
AMPlification project
has entered its 2
nd
edition, with the collaboration of Worldrise and the support
of Ariston Group. This initiative places the spotlight on the importance of Italy's Marine Protected Areas and their biodi-
versity with the younger generation. Two marine protected areas were supported in the year:
Bergeggi Island in Liguria
and
Capo Milazzo in Sicily.
Through dedicated classes and engaging interactive activities, children
from 8 elementary
schools
have been introduced to essential conservation practices.
Spain:
Ariston Spain is strengthening efforts toward training Installers, with a specific focus on organisations aiding at-risk
youth. In 2023,
900 people from 487 companies were trained by means of 120 courses
. These promote sustainable solu-
tions including aerothermal energy through advertising campaigns and educational initiatives.
Supporting non-profit organisations
Israel:
In 2023 Chromagen
donated 4 solar water heating systems
for a non-profit sailing organisation in Haifa, close to
the Mediterranean Sea. The non-profit organisation supports 45 children with special needs, allowing them to participate
in different activities to help them gain self-confidence and learn life skills. Furthermore, Chromagen hosted a group of
young teenagers from the “Aharai-Tech” movement, to develop a solar water heating forecast system. Lastly, Chromagen
donated 2 300 L solar water thermosiphon systems
to the new Chabad centre in Bangkok, Thailand. The installation was
conducted by an Israeli volunteer.
Morocco
:
Ariston Morocco chose the small village of Touama near Marrakech
to provide hot water facilities
in three key
locations: Dar Taliba Touama, a housing facility for young girls attending high school; Dar Oumouma, a maternity facility
for pregnant women from surrounding areas; and a postnatal recovery space. Examples of heating solutions provided
range from electric water heaters to solar water heaters. Additionally, in the aftermath of the 7.0 magnitude earthquake
which struck the Marrakech region in September 2023,
Ariston joined the relief efforts visiting the affected areas and
delivering informal donations of essential goods
.
Romania:
since 2018 Ariston Romania contributed to
national educational institutions by supplying efficient boilers
. In
collaboration with the Romanian Red Cross, Ariston also sponsored local NGOs, such as Book Land, Charity of Good Gala
81
and City of Good Deeds. Additionally, a school in the Apuseni mountains was equipped with efficient boilers, enabling
over 3,000 children to have access to hot water. In June 2023, Ariston Romania was awarded with the 2
nd
place in the
community support category by the Romanian CSR Awards.
Spain:
in 2023, Ariston Spain, together with the Fundació Hàbitat3 and Casa Jové not-for-profit organisations, actively
promoted the Casa Bloc social housing complex in Barcelona, by
donating 17 Lydos Hybrid electric water heaters over
the years
. These systems made it possible to save 50% in energy consumption compared to conventional water heaters,
resulting in almost €200 savings per year per household.
Vietnam:
through a collaboration with local charity organisations, Ariston Vietnam facilitated the
donation and installation
of more than 80 storage water heaters
in primary and secondary schools across the highland provinces of Northern Vi-
etnam. Moreover, the Company’s colleagues organised an event to celebrate the Mid-Autumn Festival and foster aware-
ness on the importance of thermal comfort for sustainable living.
Creating value for communities and stakeholders
Economic Value Generated and Distributed
(Million euro)
2023 (incl. WB)
2023 (excl. WB)
2022
2021
Economic value directly generated
3,160
2,338
2,432
2,024
Directly distributed economic value
2,827
2,139
2,249
1,824
Operating costs
1,969
1,513
1,657
1,327
Value distributed to employees
675
476
459
412
Value distributed to capital suppliers
42
38
25
8
Value distributed to the public administration
88
60
60
25
Value distributed to shareholders
48
48
46
48
Value distributed to the community
4
4
2
2
Economic value retained
329
198
192
198
Customers: Beyond Customer Proximity
The ambition to 2030
2030
Long
-
term target
Progress in 2023
Status
Deliver excellent, tailored solutions and services to B2B
and B2C customers and increase the loyalty of profes-
sionals
Comprehensive enhancement of B2B and
B2C tools across all levels: listening, en-
gagement and support
WIP
2025
Mid
-
term supporting initiatives
Progress in 2023
Status
Quantitative Ariston Brand Equity B2C assessment
every 2 years
Completed in 2022
Voice of Our Professionals B2B program launch in 2023
Completed in 2023
Voice of Our Professionals B2B program every 2 years
New target
> 8 key countries with active "OneTeam Professional"
portal
Active in 5 key countries
+2
coun-
tries
(vs
2022)
+15% Ariston website organic clicks performance per
year
+15% vs 2022
+15%
(vs 2022)
2023 milestones
82
Focus on Professionals
LISTENING TOOLS
Brand Equity Assessment:
To achieve the goal of becoming the preferred partner for professionals like Installers, Service
Centres, and Planners, the Group prioritizes providing tools for continuous improvement by gathering feedback. The
primary tool for this purpose is the Brand Equity Assessment, initiated in 2023 and conducted biennially. The main objec-
tive is to measure brand perception, strengths, and weaknesses among professionals, while evaluating their customer
experience. This study involves a survey distributed to a diverse panel of over 3,000 professionals, including Installers and
Service Centres working with Ariston and other industry brands in key countries. The initiative ensures a comprehensive
and inclusive analysis due to the varied experiences and backgrounds of the participants.
Technical Committees:
The Group consistently offers listening and meeting opportunities through both online and on-
site
Technical Committees.
These moments provide a valuable occasion for dialogue with the
service partners
and offer
structured platforms for discussing and collecting potential product issues, assessing perceptions on product quality and
identifying ways to improve product lines or create new ones. This year, the Technical Committees were expanded to
include the
United States
and
Mexico
, in addition to the markets already involved in the project: France, Italy, Poland,
Romania, Spain, the Netherlands, Switzerland, Austria and Germany.
The Group also develops an annual plan to collect feedback and insights from B2B customers that provide installation
and support services. This activity facilitates the connection of regional partners with corporate offices responsible for
R&D, Product Marketing, Quality and Operations. In 2023, the Ariston Group conducted a total of
9 technical support
sessions, involving around 100 participants
, across various countries. The sessions involved 5 Corporate Departments
(Service, Quality, R&D, Connectivity and Product Management), with the aim of meeting Service Centres from different
countries in Europe, dealing with both Ariston and ELCO brands.
ENGAGEMENT TOOLS
The OneTeam Portal:
To assist professionals and engage them through daily service tasks, the Group has established the
OneTeam Portal, a comprehensive digital portal
that works as a valuable reference point for them. Since its launch, the
platform has continuously evolved to include new digital services, training programmes and up-to-date product infor-
mation, with the ultimate goal of becoming an essential tool for diverse markets.
It features, for example, an
Event & Learning Hub
, dedicated to both online and offline learning events; a
Media Centre
,
providing easy access to a rich catalogue of brand-related, promotional and technical videos; the
E-Catalogue
, an inter-
active digital catalogue offering product technical specifications; and the
Solution Portfolio
, showcasing best practices of
system installations in the field.
In 2023, new
training programmes
were launched on the platform. Courses vary across markets with annual content
updates based on new product launches.
The platform further expanded its presence
in Romania in January and in France
in June. As of today, the platform engages approximately 12,200 professionals across 5 markets, with monthly engage-
ment rates exceeding 70%, with users expressing a
high level of satisfaction
with the platform thanks to its user-friendli-
ness and its relevance to their work.
Expert Service app:
The
Expert Service app
was designed for
authorised service centre networks
to facilitate their daily
work through digital services that enable ease and speed. The app replaces AThOS, the current corporate platform used
by authorised service centre networks to
register after-sales interventions in the field
. Through the Expert Service app,
technicians
will be able to globally
report their daily work activities
through an end-to-end paperless process, registering
interventions, activating extended warranty contracts and collecting technical information through a single tool. The app
will, in fact, soon be incorporating Quick Fix functionalities.
In 2023, the platform was launched for the Ariston brand in Italy and France, as well as for ELCO in Italy. The
goal is to
extend the platform in all the major countries
, to positively impact after-sales processes, including from a sustainability
point of view: in 9 months, in just 3 markets, the Group was able to save more than 1 ton of paper thanks to this new and
digitalised approach.
Sales Academy:
Launched in 2021, the
Sales Academy
aims to uphold sales standards for Ariston’s customers by
optimizing
go to market processes
, across business models and
transferring skills to the sales teams
, providing them with the neces-
sary tools for executing sales with the highest level of effectiveness in the continuously changing competitive environ-
ment they operate in. This project
spans over 15 countries
across America, Asia, Africa and Europe, with the goal of cre-
83
ating a
repository of best practices through targeted training across regions
. In addition to the codification of best prac-
tices, additional objectives include the ability to assess sales competencies, offer continuous learning programmes, as
well as professional training courses and create an
online sales community
.
Starting from the pilot training launched in 2022 and delivered to around 40 individuals, in the spring of 2023 a
compre-
hensive training programme
was launched for the
entire sales force in France
. Currently, the focus lies in assessing the
benefits brought by this training, measuring them across various dimensions including feedback and learning assess-
ments. One of the key objectives of the Academy is to
centralise and consolidate the training material
, in order to make it
accessible on the Group’s Intranet alongside additional materials to clarify and define sales processes. This programme
continues to set the foundations for a Global Academy to eventually introduce an international program that trains the
entire sales personnel across the company and guarantees customer proximity and engagement.
SUPPORT TOOLS
Training Service Centre teams:
In light of the growing complexity of products and technologies within the industry, Ariston
Group offers
training opportunities targeted to the Service Centre teams
who provide assistance and repair services for
the company's products. These courses are specifically designed for professionals to
enhance their understanding of
product specifics
, ultimately enabling them to offer the best assistance to the end customer.
The activities comprise
technical training
, courses covering the products and solutions
installation
,
repair
and
configura-
tion
, as well as the provision of comprehensive technical documentation and an extensive repository of informational
materials. With regard to the Ariston and Chaffoteaux brands in Europe, a total of 552 training sessions were provided,
for a total of 4,026 hours and 4,769 participants.
21
More specifically, countries involved are Italy, France, Spain, Romania,
Poland, Hungary, Czech Republic, the UK and the Balkans.
On the occasion of
ATAG Heating
’s 75
th
anniversary, which fell on 6 October 2023, the
ComfortHub training centre
was
opened in Lichtenvoorde, in the Netherlands, with the ambition of supporting Installers in the
transition towards heat
pumps
, addressing the challenges such a transition poses for Installers. Over the next few years, the centre will tackle
these gaps by
training current and new Installers
who need to switch from gas condensing heating boilers to electric and
hybrid heat pumps
.
With the goal to provide Service Centres with further knowledge and support, the Group has broadened
its offer by
providing a comprehensive service package
– the
Service Bundle
– containing troubleshooting resources and easily
acces-
sible technical documentation
. The bundle is activated during the initial setup of connected products and leverages on
connectivity to provide remote support with an extended warranty into a single solution. Within this package, the Tutor-
ing Service stands out, providing proactive and remote technical support services by leveraging connectivity, thereby
enhancing the efficiency of the assistance provided.
Another example is the interactive
Quick Fix app
, which provides Installers with solutions to tackle the most common and
frequent
product issues
. Moreover, the Quick Fix offers online access to
product documentation
, including user manuals,
exploded views, spare part lists and technical notes. The app is also designed to be used in locations with unstable or
limited internet access, since searches can also be
conducted offline
.
In 2023, the app was extended to multiple markets and
for the ATAG brand in Italy
. Overall, the year was concluded with
the introduction of
10 new troubleshooting methods
. Looking ahead, a project is currently underway to integrate Quick
Fix’s capabilities into the new Expert Service platform.
FOCUSING ON ELCO AND WOLF: DIRECT SERVICE
Wolf service department:
Wolf Service Department
operates on a Service process built upon several key pillars.
•
The service journey begins with a dedicated
Call Centre for end customers
, facilitating consulting and service
requests, including the scheduling of appointments with end customers and ensuring timely deployment and
responses.
•
The
Technical Consulting
area is tailored to provide technical support for specialist trades and wholesalers to
this is made possible through Wolf’s internal service and training programs, with a focus on maintaining a 90%
rate of accessibility while delivering high-quality advice.
21
The Group is currently also collecting this data in other countries in which such training sessions are provided including China, Mexico, the US, etc.
84
•
Efficient interventions management is ensured through
a centralized dispatching team
, where the company
leverages its proprietary dispatching software for service assignments falling within or outside warranty peri-
ods.
•
The
Field Service
team, comprising a team of 120 technicians, is dedicated to the execution of service orders.
Rigorous training programs aim to swift and effective order completion, with a first-time-fix-rate of more than
85%
•
In pursuit of continuous improvement, the
WOLF Service
pushes the development of modern processes and
digital tools like a centralized knowledge base and a high class service management platform. As a target picture,
WOLF is dedicated to enhancing and optimizing service delivery, ensuring that Wolf consistently meets and ex-
ceed the expectations of its clientele.
ELCO’s tech days:
ELCO carries out
seminars that bring together industry players
(architects, planners, legislators and
stakeholders) to
raise awareness on the energy transition and products deploying renewable energy sources
. The initia-
tive this year took place in Berlin, Munich and Frankfurt. The targeted audience includes approximately 100 Service En-
gineers per event, with guest speakers from the
Fraunhofer Institute for Solar Energy Systems ISE
, from the
legislative
context
and
leading architects
, who have presented solutions already on the market that act as showcases for achieving
the no emissions targets in the EU by 2050.
ELCO investments in a new field service solutions and in training:
ELCO service engineers have
transitioned to a state of-
the-art and fully integrated support system
. This transition not only enhances their work capabilities, but also sets the
foundation for further optimisation. The replacement project encompassed an extensive
training program
designed to
equip ELCO service technicians with the necessary skills to maximise the benefits of the new system.
In ELCO's key service markets such as Switzerland, Germany and Denmark, a significant number of service engineers are
undergoing
specialised training to either acquire new skills or enhance their existing ones in the maintenance of renewable
energy products
. In Switzerland and Germany alone, the Group has provided more than 10,000 hours of training overall.
This training is particularly beneficial for service engineers who were previously experts in servicing fossil fuel-based heat-
ing generators, as it equips them with the ability to service renewable energy products, thereby not only expanding their
expertise, but also enhancing their career advancement prospects. At the same time,
digital tools
play a pivotal role in
the customers’ support.
ELCO remote assistance:
In Denmark, where the Group operates with the Gastech-Energi brand, and Switzerland, a
re-
mote technical support
unit has been established to
assists clients facing heating system problems, reducing the need to
dispatch service engineers to the customer's location. This approach significantly reduces travel-related emissions.
In 2023 ELCO
has also been
testing a distributed
remote monitoring approach
, through which service engineers can per-
form a first check remotely. These tests are in progress in Switzerland and Germany, further reducing unnecessary travel
and providing customers with a better service. In parallel, ELCO is working on a Planning Automation project in the DACH
area (Germany, Austria and Switzerland) and in Belgium, which will increase the
automation of the planning and dispatch-
ing processes.
This will allow for route optimisation, leading to reduced travel and a
progressive transition to digital com-
munication models
.
Focus on end customers: listening, engaging and supporting
While the Ariston Brand Health assessments, conducted bi-annually, represent the ultimate listening activity with respect
to end consumers, Ariston Net is the tool that enables interaction with them, fostering engagement and support. The
latter is a smart app, specifically designed to engage customers in easily and remotely managing their thermal comfort
solutions by controlling heating and hot water temperatures, setting a schedule, changing the operation mode, and re-
ceiving real-time notifications in case of system failures.
Dedicated call centers are an example of excellence when it comes to support activities:
they ensure fast and personalised
support. Among the
more than 300,000 incoming calls managed
in its European call centre in 2023, the
average response
rate was 96%,
with a
16 second average wait rate.
Operators are mostly native speakers or have a minimum C1 level of
language proficiency.
Understanding the end-customers' expectations enable the Group to develop and enhance their processes. For instance,
they can concentrate on
training protocols
for call centre agents, technicians and warehouse staff that handle spare parts
so that everyone works together and consistently positions the needs of customers at the centre.
85
Customers: Trustworthy quality excellence
The ambition to 2030
2030
Long
-
term target
Progress in 2023
Status
> 85 Quality score per year in the cumulative Group
Quality Excellence Index (GQE)
85%
WIP
2025
Mid
-
term supporting initiatives
Progress in 2023
Status
Quality Mission to be declined into a Quality Strategy
Products and systems:
· New Product Introduction (NPI)
· Validation test protocols enhancement
Establish and roll out a Quality Roadmap Program to op-
eratively execute the necessary improvement initiatives
according to the Quality Strategy
•
Services: Expert Service and platform
implementation
•
Customer care: measuring the cus-
tomer experience
•
Mindset and awareness: quality cul-
ture enhancement (training and en-
gagement)
•
Drive by data: new data platform de-
velopment
WIP
2023 milestones
Quality Improvement Management:
The
Quality Management System
of Ariston Group was originated in 1993, imple-
mented in accordance with ISO 9001 edition 1987, and initially certificated by CSQ-IMQ, in response to the need ex-
pressed by the executive directors to standardize business processes and to enable a process of continuous improve-
ment. In subsequent years, the Quality Management System has been constantly kept updated as per the evolution of
the
ISO 9001 standard
. Today Ariston Group has a global Corporate certificate issued by BSI and several site’s certifi-
cates issued by local certification bodies.
The
Group Quality policy
is communicated by the executive directors and exhibits the following characteristics:
• alignment with the Group's context, organization, resources, goals and strategy;
• suitability for establishing Quality objectives;
• incorporation of statutory and regulatory requirements, along with customer expectations;
• integration of the commitment to the continuous improvement of the Quality Management System
and business processes.
Concerning the products, the Group has an internal department which manages all product standards to ensure compli-
ance with regulations, laws, directives, statutory and regulatory requirements and so on. The Ariston Group’s products
not only meet the minimum CE marking requirement but also carry additional markings due to voluntary participation
in safety testing programs. These programs include
• product verifications at each stage of production with 100% end-of-line checks;
• product samplings to verify and monitor safety, performance and chemical risks, leveraging in
internal and external laboratories;
• compliance management for regulatory updates.
This applies to non-gas appliances as well, where the law does not mandate a third-party CE certificate but rather an EU
Declaration of Conformity based on their technical documentation.
Furthermore, heating heat pumps (HHP) with R32 fall under the mandatory CE certification according to the Pressure
Equipment Directive (PED), undergoing annual audits in both relevant plants (Wuxi and Albacina). For these HHPs, Ariston
Group has also obtained voluntary marks (HP Keymark) through third-party verification, tests in accredited laboratories,
factory audits and annual monitoring, covering both the product and the plant.
Quality Strategy:
Whilst the Group’s Quality Vision states that “We want our customers to be our best promoters”, the
Quality mission affirms that “We care about customers over time as our outmost priority, providing products and systems
designed to fulfil their expectations of comfort and efficiency with best-in-class services”. To pursue this mission, the
Company defined a forward-looking strategy on:
86
•
Products and systems:
in order to be close to markets and customers with a comprehensive portfolio that meets
end-users’ needs, the development of a specific approach to define accurate solution specifications from the
very beginning is key, as well as the deployment of dedicated practices for new technologies.
Technical compe-
tencies
and
test protocols
are continuously being enhanced
with a focus on their harmonization. An updated New
Product Introduction (NPI) process was defined and deployed within the organization.
•
Service:
ensuring sustained service excellence requires
ongoing customer support with a focus on technical
product knowledge and its entire lifecycle
. Collaboration between the back-end and front-end operations is im-
perative in order to enhance responsiveness and maintain a customer-centric approach. 2023 saw the
beginning
of the
Expert Service platform
introduction to create a common knowledge base platform for service centres
and unify the escalation process from the field.
•
Customer care:
Ariston Group’s ambition is rooted in its commitment to ensuring
long-term satisfaction
throughout the entire customer journey
. This involves maintaining a high level of service quality and a well-
rounded product mix, while also preserving the installed customer base. In 2023, work has been carried out on
an initiative aimed at
measuring the customer experience
, particularly focusing on product defects and service
quality.
•
Mindset and awareness:
quality has always been an integral part of the Group’s culture, but maintaining a con-
stant level of improvement requires raising awareness on quality issues, providing it the attention it deserves,
and using internal resources. Together with HR, the Quality department launched the
Quality Journey
initiative,
designed to harmonise and enhance the company’s quality culture and
cascading it to all business levels
. Starting
in May 2023, a selection of e-learning
trainings
were introduced. These modules, handpicked by subject matter
experts, were made accessible to all employees through the MyLearning Platform. The core objective of these
e-learning modules was to impart fundamental knowledge related to tools, methodologies and quality principles
such as Six Sigma, ISO 9000 and more. Moreover, tailored technical training activities will be made available for
employees working in the Quality Department or in areas such as R&D, according to the skill gap mapped for
each individual.
•
Drive by data:
a decision-making process based on solid data and IT system architecture is necessary to achieve
a high-quality standard.
The Group is working on developing a new data platform to ensure an improved, global
and easy access to the full quality KPI set.
Moreover, the
growing number of connected products and consequently
the access to a large amount of live data from the field is permitting a leverage to data science and AI techniques.
GOVERNANCE
The “Governance” chapter explains the structures, processes, and mechanisms that guide decision-making and ensure
accountability within the organisation, also from a sustainability perspective. Effective leadership and ethical conduct
provide the framework through which goals are defined, risks are managed, and resources are allocated.
Principal risk and its management
RISK: Inability to guarantee the correct coordination, control and management of the Group that could lead to impacts
on the overall sustainability and ethical standing in doing business, managing operations and people
Governance – Policies and mitigation actions
-
Code of Conduct and Code of Ethics
-
Antitrust Compliance Handbook
-
MOG Ariston Holding N.V.
-
MOG Ariston S.p.A.
-
Whistleblowing Procedure
-
ICT Security Model
-
Information Notice Candidates’ Personal Data
-
Connectivity - Privacy Notice
-
ICT Security Model
-
Information Notice Candidates’ Personal Data
-
Connectivity - Privacy Notice
Focus on Anti-Bribery and Corruption’s risk:
Ariston Group's growth strategy focuses on a continuous expansion within the existing geographical areas, as well as
entering in new markets. The Group operates in emerging markets and in some countries, where the political situation,
the geopolitical instability and the corruption are higher than in other geographies.
The Group promotes the adoption of the Code of Ethics as a best practice standard of business conduct by partners,
suppliers, consultants, agents, dealers, and others with whom it has a long-term relationship. In 2023 the Code of Ethics
(which was already translated in 22 languages including the main relevant within the Group and published in each web
site of the group companies and in the Company intranet) has been updated to currently effective company names and
contacts people. Moreover, the Group’s contracts around the world include specific clauses relating to the recognition
and upholding of the principles underlying the Code of Ethics, as well as compliance with local regulations, particularly
those related to corruption, money laundering, terrorism, and other crimes giving rise to liability for legal persons, leading
to termination of the contracts in case of breach of the Code of Ethics by the counterparts.
Ariston Group monitors the effectiveness of, and compliance with, the Code of Ethics in accordance with whistleblowing
management procedure. The Group Internal Audit, in the execution of its activities, bears into consideration the Code of
Ethics’ values and obligations as part of the audit program.
In addition, it can count over the existing entity-level controls which contribute to mitigate corruption and bribery risk can
happen, such as delegation of authorities and power of attorney, segregation of duties, 231 Organization and control
model (for Italian Companies) and related training on 231 compliance; remuneration policy, accounting policies, internal
audits on group legal entities, investigations performed as a result of Whistleblowing reporting, whistleblowing commu-
nication campaign, ERP and CRM systems.
Finally, process-entity controls are in place in procurement, production, inventory management, finance, human re-
sources, research & development, marketing & sales, logistic and more generally in all the subprocesses which could
generate a bribery and corruption risks.
Across the Group, employees receive proactive communications designed to distribute the Code of Ethics and the Or-
ganizational Model in accordance with Legislative Decree 231/2001, both of which cover anti-corruption measures. In
2023, 82% of White Collar employees (including Wolf-Brink) and 100% of White Collar employees (excluding Wolf-
Brink) underwent training on Organizational Model in accordance with Legislative Decree 231/2001. This training also
included a specific module on compliance with "Compliance 231" training provided to white-collar employees in the
Italian operation.
As a result of all these risk management activities, in 2023, the Group recorded zero confirmed incidents of corruption.
88
Long-sighted sustainable governance
The ambition to 2030
2030
Long-term target
Progress in 2023
Sta-
tus
Ongoing yearly commitments developed to meet high
governance standards on sustainability
-
- Extension of BCP to non-Euro-
pean countries
-
- Training on GDPR, antitrust
and 231
WIP
2025
Mid-term supporting initiatives
Progress in 2023
Sta-
tus
At least 50% female directors and at least 50% male di-
rectors among the executive directors of the Board by
the end of 2028
At least 33% female directors and at least 33% male di-
rectors among the non-executive directors of the
Board by the end of 2025
New target
30% female and 70% male
WIP
Risk and Crisis Management enhancement
Special focus on ESG and Tax risks in ERM
WIP
Code of Business Conduct continuous improvement:
Code of Ethics, corruption and bribery, human rights
Training on GDPR, antitrust and 231
WIP
Tax Strategy strengthening
Tax Control Framework approved in 2022
WIP
2023 milestones
The corporate governance model:
on 26 November 2021 the Company's shares were admitted to listing on Euronext
Milan. The listing on Euronext Milan further consolidated the Group’s careful management approach to internal control,
with a corporate governance model structured as follows:
General meeting
: the Company's general meeting decides on the matters reserved for it under the law and the articles
of association and is chaired by the Chair of the Board of the Company (the 'Board').
Board
: the Company maintains a one-tier Board consisting of executive directors and non-executive directors. The exec-
utive directors are responsible for the day-to-day management of the Company. The non-executive directors supervise
and advise the executive directors. The Board as a whole is responsible for the strategy and the management of the
Company. See section: "5.3 Corporate governance" for further details.
Guaranteeing a diversely composed Board:
See sections: "Diversity policy" and “Diversity of the Board and its commit-
tees” for further details.
ESG governance: The
Ariston Group
has defined a strong structure
, currently composed of
three functions
that are fully
dedicated to sustainability.
•
The
ESG committee
supports the Board on (i) providing guidance to steer the strategy of the Group in terms of
ESG vision and commitments; (ii) approving the Group's material topics and related
ESG plan (targets, activities
and KPIs); (iii) monitoring the ESG plan execution in terms of target achievement and progress of actions, includ-
ing areas of work required by ESG rating agencies; (iv) approving the Group's ESG communication plan and re-
porting methods related to ESG issues, such as "Declaration on non-financial issues"; (v) promoting the dissem-
ination of Sustainability Culture in the Group; (vi) supervising the activities of listening, dialogue and involvement
of stakeholders.
•
The
ESG Council
is a cross-country and cross-functional roundtable between Global Executive Committee mem-
bers and the ESG Director to discuss ESG challenges and develop the strategies needed to surmount them. The
Council also includes the Executive Chair and the CEO.
•
The
ESG Director
works with all the internal functions and external stakeholders to address the organisation’s
ESG responsibility to identify risks and opportunities as well as minimise negative actual and potential business
impacts while maximising positive ones. The ESG Director communicates the ESG committee’s aspirations as
89
well as stakeholders’ expectations to the ESG Council and reports main results to the ESG committee. Main
responsibilities also include developing and overseeing the overall execution, mission and effectiveness of the
ESG strategy, defining and implementing ESG organisational policies, promoting an ESG culture across all levels
of business, and preparing all the external reporting required by national and international regulations.
In accordance with the new Dutch corporate governance code, which entered into force for the financial year beginning
on or after 1 January 2023, the audit committee has assumed duties and responsibilities regarding the supervision of the
integrity and quality of the company's sustainability reporting.
231 organisational model:
Ariston has adopted the
Organisation and Management Model
required of Italian companies
under
Legislative Decree 231/2001
to prevent the commission of crimes and unethical conduct. Ariston Holding N.V.’s
Organisation and Management Model was updated by the Board at the meeting held on 16 December 2022. This version
incorporates the organisational, regulatory, and corporate structural changes that occurred since the previous version in
a consistent and harmonised manner. The model thus illustrates the
general rules of conduct that all recipients must
follow to prevent the commission of the updated list of crimes
provided by Legislative Decree 231/2001, including all the
crime descriptions included up to the date of adoption, since the Board decided to keep the Company fully compliant
with Legislative Decree 231/2001, in terms of both the aspects of the Organisational Model and the appointment of the
Supervisory Board, also after the redomicile of the Company in the Netherlands. Online training on the 231 model was
provided to 663 white collar employees in 2023, meaning that almost all the relevant target population completed the
training at Group Level-Italian perimeter through 2022 and 2023, for blue collar employees dedicated sessions have been
organised. The Supervisory Body, appointed compliant to Italian Decree 231/2001, through 2023 monitored that the
Organisational and Management Model is effectively implemented and updated and supervised its suitability to prevents
crimes.
Whistleblowing system:
EU Directive no. 2019/1937 requires all Member States to fully regulate whistleblowing proce-
dures and to provide whistleblowers with effective channels to confidentially report unethical behaviour and wrongdoing,
establishing a robust system of protection against retaliation.
In compliance with the new legislation, the Group has implemented a
new whistleblowing platform
, available for the
entire Group, including all the subsidiaries, as well as for both internal employees and external third parties. The platform
has been deployed using a third-party web-based solution, accessible at any time by potential whistleblowers and assur-
ing the highest level of integrity and confidentiality.
The Group has adopted a
whistleblowing policy
that strengthens its commitment to whistleblowers, in particular clarifying
that retaliatory actions are not tolerated and would be prosecuted.
Furthermore, the
existing whistleblowing procedure
has been updated to align with the new legal requirements and the
implementation of the new platform.
The
internal whistleblowing committee,
composed of the Head of Internal Audit and Chief People Officer, is accountable
for managing the whistleblowing process, defining the need to proceed with an investigation, evaluating with manage-
ment the identification of action plans and/or the application of sanctions or penalties. During or before starting the
investigation the whistleblowing committee is in charge of interacting with the whistleblower and providing them with
feedback about the case developments.
A
whistleblowing communication campaign
, for both white and blue-collar employees, was launched at the beginning of
2024, on a global scale. The primary objectives include enhancing awareness and the Group's commitment to safeguard-
ing whistleblowers from retaliation or discrimination. The campaign aims to promote a culture of openness and account-
ability, encouraging employees to confidently report unethical behaviour and wrongdoing through the whistleblowing
platform.
Antitrust Regulation:
The Group runs its business fully compliant with
competition rules and their foundational princi-
ples of merit
,
fairness, and loyalty
. The Group requires all employees worldwide to maintain conduct that is fully con-
sistent with the provisions of national and international antitrust laws and regulations, in compliance with the Group’s
Code of Conduct
and the
Antitrust Vademecum
which form an integral part of the Group’s
Code of Ethics
. The Group’s
organisational model makes it possible to promptly verify compliance with the relevant EU regulations. Since 2018, the
Group has performed a thorough assessment and refreshed its antitrust programme, including a dedicated manual and
guidelines, and is offering online training to all employees in order to raise awareness about applicable laws and the
relevant principles. In 2023, the Group launched and performed an overall assessment of its antitrust compliance pro-
gram, with the aim of strengthening people’s awareness and knowledge of antitrust rules, identifying the main points to
focus on from an antitrust perspective and spreading an antitrust compliance culture within the Group; a set of updated
90
documents was made available on the Group website, an antitrust vademecum and antitrust manual. In 2023, a new and
updated training online tool was implemented, to ensure acknowledgement of rules and legal provisions and awareness
of correct behaviour, compliant with competition rules, available to all Group employees. At Group level, 2,034 selected
employees have been given the online training; the target population is going to complete the antitrust online training.
During 2023 all the antitrust documents were translated into all the main languages of the Group and made available on
the website for worldwide consultation, Wolf Group included.
Anti-Money Laundering and Trade Compliance:
In 2019, the Company adopted an organisational model that makes it
possible to ensure the Group’s compliance with
Anti-Money Laundering
(AML) and
International Trade Compliance
regulations at national, European, and international level. Noteworthy among them are the
Office of Foreign Assets
Control (OFAC)
Regulations of the United States and the specific Regulations adopted by the European Union with respect
to sanctions and restrictions against certain countries and entities as well as to dual use, including
Regulation 428/2009
.
The main tool adopted by the Company to this end is the Trade Compliance Manual, which lists the various measures in
place to prevent conduct contrary to Trade Compliance regulations. These consist of specific conduct procedures that
involve several checks and reviews throughout the performance of sensitive business operations.
In 2023, the Trade Compliance Manual was updated with a specific procedure to increase the level of control over diver-
gent payers and on the screening of clients, employees and suppliers, improving the protection against risks of breaching
worldwide trade compliance rules. Specific training dedicated to the changes has been provided, for the benefit of all the
Trade Compliance Manual users at Group level.
In 2023, the Group acquired
software dedicated to running individual and collective checks
on employees, customers,
and suppliers as well as
conducting specific investigations
where required. The new tool allowed greater possibility to
carry out inquiries, allowing the screening of 60,000 counterparts and 100 second-level checks of ultimate beneficial
ownerships which can be conducted by the Company itself; the implementation of the new tool is ongoing. All such
measures are referenced in the Code of Ethics, of which they form an integral part. Twice a year, the Group, through a
tool managed by an external supplier, conducts a general
review of 10,000 counterparties
(including suppliers, custom-
ers and employees), with respect to those located in so-called sensitive countries, to identify any person or entity sanc-
tioned under OFAC, UN and EU lists. The Group analyses the findings and, if necessary, asks an external advisor to perform
additional due diligence, halting transactions where required. This process is repeated also before beginning a new busi-
ness relationship in a sensitive region. In 2023, the Company asked the external professional advisor for 12 further deeper
analyses on clients and suppliers whose outputs from the tool were not satisfactory.
As for this last item, subsequent to the approval of EU Regulation 2022/336 on 28 February 2022 following the invasion
of Ukraine by Russia and consequent EU sanctions against Russia and subsequent updates of this regulation during 2022
and 2023, the Company monitored the situation through all the following EU Regulations, up to the twelfth package of
restrictive measures against Russia adopted with Regulation (EU) 2023/2878 and 2023/2873, and related execution rules
2023/2875, dated 18 December 2023. The EU sanctions potentially affecting the Company are "subjective", if addressed
to banned persons, or "objective" if addressed to banned products.
As far as objective restrictions, the Company engaged a law firm to screen its whole portfolio of products, with the fol-
lowing results: as regards the Burners division, most of the products manufactured are banned, and export towards Russia
has been stopped. As far as Heating and Water Heating products, most products are banned (which were immediately
stopped), with the exception of gas wall hung boilers; also components – mainly electronic components – are banned
and were immediately stopped. As a consequence, export of finished products has not been stopped where allowed,
instead components have been selected and only banned components have been stopped. Also some imported products
are banned, and as a consequence stopped. As for spare parts, some components were banned, and these have been
stopped. Through 2023 all these analyses from the external consultant were kept updated through new rules, FAQ and
interpretations. As for "subjective" restrictions, all clients, employees and suppliers have been screened as compliant
with the updated Trade Compliance Manual, and no banned persons were found. If the individuals are confirmed as
banned, the Company stops dealing with them. The functional structure of the Company has been analysed as regards
potential crime liability and the consultant’s updated output is that the Company is currently managing the framework
of relations with involved parties in compliance with the laws and regulations currently in force.
91
Anti-Bribery:
As clearly stated in its Code of Ethics,
the Group does not tolerate any acts of active or passive corruption
involving any public or private entity or individual
. The Group’s Companies undertake to comply with and enforce ap-
plicable anti-bribery legislation. Moreover, the Code explicitly forbids taking advantage or boasting of existing or alleged
relationships with Public Administration officials to give or promise money or other utilities to oneself or others as the
price for illicit mediation with the public official, or to compensate them with respect to the performance of their func-
tions or powers.
Tax Group Strategy:
The Group is equipped with a Tax Strategy that outlines a common
approach to tax
and clear man-
agement roles and responsibilities with the main purpose of guaranteeing:
•
Tax compliance
: to ensure compliance with all applicable laws and regulations and to pay its fair share of taxes
in a timely and responsible manner in all jurisdictions where it operates.
•
Tax risk management
: to integrate effective risk management into the Group's governance system to protect
the Company’s value over time.
•
Tax transparency
: to work collaboratively with tax authorities and foster trust, loyalty, and fairness.
Furthermore, the Group implemented a
Tax Control Framework (TCF)
that sets out to increase transparency and contrib-
ute to the economic and social well-being of the Company.
Said framework equally makes it possible to manage and miti-
gate tax risks, the monitoring of which is enabled by the Tax Risk and Controls Matrix of Ariston S.p.A.
First applied to
Ariston S.p.A. and Italian companies, the TCF is then applied to other companies within the Group operating in other
countries. 2023 saw the
identification of potential tax risks
with an impact on the Group and the introduction of appro-
priate controls to intercept their presence and mitigate their effects. The governance of the TCF is regulated in the Tax
Compliance Model (TCM) which defines the roles and responsibilities in the management of the tax variable and the
execution of monitoring activities of the processes prepared to mitigate tax risk, entrusted to the Tax Risk Officer (TRO).
Business Continuity Plan (BCP):
In line with the Dutch corporate governance code, which requires a company’s manage-
ment to be responsible for the operational continuity of its business,
the Ariston Group has significantly expanded on this
commitment to further enhance its strategic and business risk management and control systems
. Indeed, 2023 saw an
extension of the Business Continuity Plans (BCPs)
.
The BCP serves as a pivotal tool for the annual identification, measurement, monitoring, and verification of risks to the
company's operational continuity. The BCP program provides an annual review and maintenance of the BCPs made in
each plant. These risks range from
extreme natural events
,
raw material shortages
, and
cyberattacks
. The BCP equips the
Group for various disruptions and outlines precise procedures for responding, recovering, and restoring activities post-
interruption. Prior to said implementation, each plant managed its Operational Continuity Plan (OCP) independently,
conducting risk assessments and establishing emergency plans for supply chain continuity.
Therefore, the BCP documen-
tation provides alternative solutions
, serving as a comprehensive guide tailored to each plant.
Following the successful implementation of five Italian pilot plants, in 2023 the program underwent a substantial expan-
sion,
encompassing an additional ten plants across Asia, America, and Africa
. Said extension is aimed at fostering continu-
ous improvement and ensuring the ongoing relevance of risk assessments. The objective is to dynamically adapt to po-
tential business risks, directing company resources efficiently and reactively, while maintaining a preventative stance to
eliminate or mitigate risks, where possible.
Environment, Health and Safety Management:
In order to identify and manage risks and improvement areas concerning
Environmental, Health and Safety issues, the Ariston Group has implemented an Occupational Health and Safety Man-
agement System and an Environmental Management System. Both are certified by the British Standards Institution cer-
tification in accordance, respectively, with the international standards
ISO 14001:2015
and
ISO 45001:2018
. The two Man-
agement Systems, also integrated with the
ISO 9001:2015
certified Quality Management System, lay the basis of the
company strategy for the continuous improvement of environmental policies and prevention policies for the systematic
control of risks.
The System, described in the
HSE Management System Manual
, is structured according to a cyclical sequence of planning,
implementation, monitoring and review phases and provides all levels of the organisation with harmonised tools and
guidelines to pursue the objectives expressed by the Group's HSE Policy and ensure legislative compliance. In particular,
the system is based on the following processes:
•
Context Analysis
, to determine the external and internal factors relevant to the organisation’s aims and which
influence its ability to achieve the HSE Management System goals, but also the needs and expectations of inter-
ested parties.
92
•
Definition of roles and responsibilities
thanks to an organisational structure that guarantees interactions between
the Corporate and local structures in order to systematically ensure governance of HSE aspects.
•
Hazard
identification and
risk
assessment through a methodology for risk assessment aimed at timely and con-
tinuous identification of hazards and control of all risks to which workers, suppliers, visitors and any other person
with access to workplaces may be exposed.
•
Assessment of environmental aspects
associated with production processes, products and services that the or-
ganisation can control and those over which it can exert an influence.
•
Change management
thanks to a process to preventatively intercept and manage any change that could influ-
ence systems and processes, to control potential impacts on the environment, health and safety of workers.
•
Legislative compliance monitoring
to ensure that all applicable legal and regulatory requirements are identified
and continuously updated in accordance with any changes that may occur.
•
HSE annual Internal Audit
with the aim of verifying the effectiveness of the HSE Management System, guaran-
teeing the correct application within the organisation of the procedures identified by the Management System
and guiding the local structures in the identification of the corrective actions and improvements necessary to
guarantee legislative compliance, the achievement of set objectives and continuous improvement.
•
Management Systems Review
by Top Management at regularly planned intervals to ensure its suitability, ade-
quacy and effectiveness. The Management Review outputs are translated into the update and planning of im-
provement actions and the definition of goals.
The HSE Management System applies to all production and non-production facilities of the Group. Requirements are also
included for suppliers, contractors and outsourcing services.
A Group-level procedure (
HSE.PR024Tt - HSE Risks Assessment
) was put in place in order to have a systematic approach
to the early identification of all risks in workplaces, share consistent risk assessment criteria, provide risk mitigation strat-
egies that are efficient in reducing risk to an acceptable level and methods to monitor the effectiveness of preventive and
protective measures. Risk assessment is regularly performed for both routine and non-routine activities, which are not
generally performed on a regular basis or in habitual workplaces and could create risks of interference and consequent
coordination needs, and activities being performed for the first time. The overall process allows each site to:
•
identify hazards and risk factors that have the potential to cause harm (hazard identification).
•
analyse and evaluate the risk associated with that hazard (risk analysis and risk evaluation).
•
determine appropriate ways to eliminate the hazard, or control the risk when the hazard cannot be eliminated
(risk control).
A Group Procedure,
HSE.PR004Tt-00-Incident Management
, establishes the criteria for reporting and recording Environ-
ment, Health and Safety accidents, but also near misses and unsafe situations, in order to ensure and facilitate the effec-
tive and efficient management of incidents from the moment that one occurs, until it can be investigated, and corrective
and preventive measures are developed and taken.
ESG Data Management
:
In a dynamic ESG regulatory landscape,
effective data management plays a pivotal role in shaping
an organisation's sustainability transparency
.
Against this background, the Ariston Group is actively engaged in the realm
of
ESG data management and collection
. In 2023, an assessment aimed at delineating areas where data collection proves
to be most challenging was conducted. This comprehensive evaluation identified the domains of circularity and tracea-
bility as focus areas for ESG data mapping and observation.
The Group’s strategy builds on foundational assessments to establish a structured approach for data management and
aims to enhance governance and processes, while implementing
ad hoc
tools.
Ongoing efforts involve analysing diverse
sustainability datasets, mapping data flows, and identifying the correct data owners and tools
to enhance data quality
and streamline data collection.
This approach will be followed for various ESG areas where a strong need for data collec-
tion has been identified, which, to date, remains highly specific and, therefore, not easily or immediately integrable into
current platforms.
The Group wins the EcoVadis Bronze medal:
In 2023 the Ariston Group was awarded the
Bronze Medal from EcoVadis
for its ESG performance throughout 2022. Ranked on a scale from 0 to 100, the rating reflects the quality of the company’s
93
sustainability management system measured across four main categories, i.e. environment, labour and human rights,
ethics as well as sustainable procurement. More specifically, the Group secured a
score of 58/100
, positioning at the
higher end of the bronze medal band and in the
68
th
percentile
if compared to other companies’ scores. The rating, now
visible to analysts and investors, not only reflects the Group’s dedication to environmental, social, and ethical considera-
tions but also underscores its position as a responsible corporate company, positively contributing to global sustainability
objectives and always focussed on continuous improvement.
An ever-evolving cybersecurity approach:
The Group is working towards an ICT Security Model, based on a
predictive,
preventative, and proactive strategy
. This involves analysing past and current events to gain insights and prevent unknown
threats, as well as
empowering and training employees to minimise risks
. Over recent years, the Ariston Group has focused
on building a robust and resilient cyber defence mechanism, equipping its ICT Security Team with the tools and strategies
necessary to safeguard against a wide range of threats. The team has identified and implemented
the most effective
security controls
, while also
providing support for incident investigation and recovery
. Furthermore, the Group is dedicated
to empowering its global workforce with the
knowledge
and
tools
they need to play an active role in preventing cyber
threats. Security awareness training for top management is mandatory.
Furthermore, the Group is currently in the process of
reassessing its ICT Governance
, with a specific focus on reviewing
the segment related to cybersecurity controls and those linked to the assignment of roles and the robustness of the ICT
system. The final objective is to define an ICT Control Matrix and establish periodic control processes. Additionally, the
Group is currently undergoing a review of the
Managed Detection and Response (MDR)
service provided by a third-party
company operating 24/7, which monitors all events on the
Security Data Lake
22
. This project, scheduled for the beginning
of 2024, allows for the identification of possible malicious activities, emphasising continuous improvement to enhance
cybersecurity measures.
22
The Data Lake is a data storage and analysis pla
iorm that enables the collecXon, storage, and analys
is of large amounts of data from various sources, including security
logs, network traffic data, and more
5.3
Corporate Governance
Introduction
The Company is a Dutch public company with limited liability existing under the laws of the Netherlands.
The Company has adopted, except as set out below, the best practice provisions of the Dutch corporate governance code,
which contains principles and best practice provisions for listed companies which regulate relations between,
inter alia
,
the Board and its committees and the relationship with the general meeting of the Company.
In this governance report the Company addresses its overall corporate governance and discloses any departure from the
best practice provisions of the Dutch corporate governance code and the reasons for such departures. The Dutch corpo-
rate governance code was amended on 20 December 2022 and entered into force as for the financial year beginning on
or after 1 January 2023.
The Netherlands is the Company’s home member state for the purposes of the EU Transparency Directive (Directive
2004/109/EC, as amended).
Board
Composition and powers
The Company maintains a one-tier Board consisting of executive directors and non-executive directors. The executive
directors are responsible for the day-to-day management of the Company. The non-executive directors supervise and
advise the executive directors. The Board as a whole is responsible for the strategy and the management of the Company.
The articles of association provide that directors can be appointed for a maximum period of four years ending at the end
of the annual general meeting which is held in the fourth year after the calendar year in which the director was appointed.
Directors may be reappointed.
On 2 January 2023, the resignation of Andrea Silvestri and Paolo Tanoni and the appointment of Guido Krass and Antonia
Di Bella as non-executive directors of the Board became effective. In addition, Laurent Jacquemin resigned as executive
director and Chief Executive Officer and was appointed as non-executive director of the Board at an extraordinary general
meeting held on 27 July 2023. Maurizio Brusadelli was appointed as executive director by the general meeting on 27 July
2023 and as Chief Executive Officer by the Board on 3 August 2023.
As at 31 December 2023, the Board comprised the following directors:
Name **
Year
of birth
Nationality
Gender
Position
Commit-
tees
First
appointment
End
of
term
Paolo Merloni
1968
Italian
M
Executive director
(Executive Chair)
A*, D
10 June 2021
2024
Maurizio Bru-
sadelli
1968
Italian
M
Executive director
(Chief Executive
Officer)
27 July 2023
2026
Antonia Di Bella
1965
Italian
F
Non-executive direc-
tor (
independent
)
C
2 January 2023
2025
Roberto Guidetti
1963
Italian
M
Non-executive direc-
tor (
independent
)
B*, D*
10 June 2022
2024
Laurent Jacque-
min
1969
Belgian
M
Non-executive direc-
tor
27 July 2023
2026
Guido Krass
1957
German
M
Non-executive direc-
tor
A
2 January 2023
2025
Francesco
Merloni
1925
Italian
M
Non-executive
director
10 June 2021
2024
Maria Francesca
Merloni
1963
Italian
F
Non-executive
director
10 June 2021
2024
95
* Committee chair
** Andrea Silvestri and Paolo Tanoni resigned with effective date 2 January 2023.
A = Strategic committee
B = Compensation and talent development committee
C = Audit committee
D = ESG committee
Figure 1: Board
Lorenzo Pozza
1966
Italian
M
Non-executive direc-
tor (
independent
)
C*
17 June 2021
2024
Ignazio Rocco di
Torrepadula
1962
Italian
M
Non-executive direc-
tor (
independent
)
B, C
10 June 2021
2024
Marinella Soldi
1966
Italian
F
Non-executive direc-
tor (Lead Non-Execu-
tive Director)
(
independent
)
B, D
10 June 2021
2024
Enrico Vita
1969
Italian
M
Non-executive direc-
tor (
independent
)
A
10 June 2021
2024
96
Biographies of directors
Since 2011, Paolo Merloni is the Executive Chair of Ariston Group, a multinational group among the leading companies
in the thermal comfort industry, actively engaged in the energy sustainability challenge and offering renewable and high-
efficiency solutions for heating and hot water. Paolo Merloni is also Executive Chair of Merloni Holding and member of
the Board of EHI (Association of the European Heating Industry). He is also a member of the Italian board of the interna-
tional non-profit network Endeavor Global. In 2020 he is appointed as Cavaliere del Lavoro by the Italian President Sergio
Mattarella. Paolo Merloni’s career begins in McKinsey & Company, first in Madrid and then in the Milan office. In 1995
he joins Ariston Group to hold several key positions over time, including Director for Central and Eastern Europe, Director
of Italy and Vice-President with delegation to the Heating System Division. In 2004 he is appointed CEO of Ariston Group.
Paolo Merloni graduates with the highest marks and honors at the Bocconi University in Milan in 1992, with a degree in
Business Administration. In 2022, he receives the Honorary Degree in Energy Engineering from Politecnico di Milano,
recognizing his role as a leader in the energy sector and as an innovator for the energy transition. He was born in 1968
and is married with three children.
Mr. Maurizio Brusadelli was appointed as executive director by the general meeting on 27 July 2023 and as Chief Executive
Officer by the Board on 3 August 2023. He joined the Group after a 30-year career at Mondelēz International, one of the
world’s largest snack companies. He started in 1993 in Italy at Kraft Foods, covering different positions in marketing, sales
and trade marketing. After being the Marketing Director for Italy, he moved to Zurich in 2006 as Category Director, Phil-
adelphia Europe. In 2009 he moved to Spain as Vice President and Managing Director Iberia. In 2010 he became President
Gum and Candy Category for Europe, and was appointed President of the UK, Ireland and Nordics operations in 2012. In
2014 he relocated to Singapore, to take on the role of President of Markets and Sales and Biscuits, and since 2016 served
as Mondelēz International Executive Vice-President and President Asia-Pacific, Middle East and Africa. Maurizio holds a
degree in Business and Economics from Bocconi University, Milan and is a chartered accountant. He is married and father
to two sons. Having lived and worked in Italy, Switzerland, Spain, the UK and Singapore, he is fluent in Italian, English and
Spanish.
Mrs. Antonia Di Bella is an independent non-executive director since 2 January 2023. Antonia is a professional with solid
experience in Corporate Governance, Compliance, Accounting and Audit in complex and regulated environments. She is
a Chartered Accountant and a Certified Auditor, as well as a Lecturer of “Accounting and Management in Insurance”, at
University Cattolica of Milan, Italy. She is a member of the Insurance Technical Commission at the OIC and a member of
the Steering Committee at MIRM, Master in Insurance Risk Management in Trieste. She sits on the boards of listed and
non-listed companies, including BNP Paribas Cardif Vita S.p.A., Interpump Group S.p.A., Italmobiliare S.p.A.. She spent her
professional career first in the KPMG network, dealing with auditing the financial reports of insurance and reinsurance
companies and of firms operating in the manufacturing sector and, between October 2007 and July 2015, she was the
head of the insurance sector at Mazars S.p.A.
Mr. Roberto Guidetti is an independent non-executive director since 10 June 2021. Since 2013, Roberto has been Group
CEO and Director of Vitasoy International Holdings ltd., a food and beverage company listed on the Hong Kong Stock
Exchange. In March 2023, he became independent non-executive Director of the Board at Givaudan S.A., a flagrance and
flavor company listed on the Swiss Stock Exchange. Over his career, he held positions in marketing and general manage-
ment for the Procter & Gamble Company in Europe and China. He then served in the Coca-Cola Company in China, be-
coming Vice President for the Mainland China franchise, responsible for the operations of the company, managing the
joint ventures with Swire, COFCO and Bottling Investment Group.
Mr. Laurent Jacquemin is a non-executive director since 27 July 2023, after having been CEO of the Ariston Group, with
thirty years of broad international experience. Laurent has been with the Group since 1991, holding various executive
roles and increasingly important positions in the commercial, marketing and sales areas, in relevant regions including
Europe and Asia. He became CEO in 2017, resigning from the position in 2023.
Mr. Guido Krass is a non-executive director since 2 January 2023. Since 1990, Guido is the Chairman – as founder and
majority owner – of CENTROTEC SE, a company focused on energy-efficient building technologies that founded and ac-
quired a portfolio of sustainable manufacturing companies in Germany and neighboring European countries. He also
founded Pari Group, with a focus on global real estate and technology investments. In 2017, he co-founded the Milan-
based One Ocean Foundation, which aims to develop solutions to ocean issues through ocean literacy, blue economy-
related projects, and scientific research programs. At the beginning of his career, he worked in real estate development
and private equity in Houston, Texas, and Munich, Germany.
97
Mr. Francesco Merloni has led the Group for over forty years. Since 1972, he has been a member of the Italian Senate
and Lower House seven times, during which time he has taken a special interest in industrial policy, also acting as a
member of the Bi-Cameral Commission for industrial reconversion and State's shareholdings. He was designated Minister
of Public Works for the Government of Prime Minister Giuliano Amato in 1992, being confirmed in the same role under
Prime Minister Carlo Azeglio Ciampi in 1993. Mr. Merloni is also a non-executive director of Merloni Holding S.p.A., the
Company's controlling shareholder.
Mrs. Maria Francesca Merloni has had an extensive career working in advertising for large manufacturing companies. As
founder and artistic director of the Poiesis Festival in Fabriano, Italy, she was awarded the UNESCO "Ombra della Sera"
Prize in 2013 for her cultural, social and humanitarian work. Mrs. Merloni is also a non-executive director of Merloni
Holding S.p.A., the Company's controlling shareholder and became a member of the board of Ariston Thermo Holding
S.p.A. in 2008.
Mr. Lorenzo Pozza is an independent non-executive director since 17 June 2021. Lorenzo is a chartered statutory auditor.
He has served as a director at Angel Capital Management S.p.A. and Amplifon S.p.A. and has been member of the board
of statutory auditors of Italian companies Assicurazioni Generali, Telecom Italia, Terna and Edison. He was awarded an
honorable mention from the Boston association Family Firm Institute for best article in the Family Business Review and a
Research Excellence Award from the rector of Bocconi University in Milan, Italy.
Mr. Ignazio Rocco di Torrepadula is an independent non-executive director since 24 May 2021. Ignazio has been the
founder and CEO of Credimi S.p.A., a digital lending platform for SMEs. He is also Senior Advisor at Tikehau Capital, a pan-
European Asset Management group, focusing on Private Markets. He is a director of ReVo Insurance, leading insurtech
provider of specialty lines for MEs. He has more than 25 years of experience in the financial services sector, having worked
with The Boston Consulting Group, where he led of the Financial Institutions' practice in Central Europe, and formerly in
the corporate banking and investment banking industries.
Mrs. Marinella Soldi is the independent lead non-executive director, appointed on 10 June 2021. Marinella is currently
an independent director of Nexi S.p.A. In July 2021, she was appointed Chairwoman of RAI and, in September 2023, non-
executive Independent Director of the BBC – British Broadcasting Corporation. Throughout her career she held manage-
rial posts at Mckinsey & Company, MTV Networks Europe and Discovery Networks International.
Mr. Enrico Vita is an independent non-executive director since 10 June 2021. Since 2014, Enrico has been working in
Amplifon Group, where he joined as Executive Vice-President EMEA, to be appointed as Group Chief Executive Officer in
October 2015. During his career, he worked at the Italian manufacturing company Indesit, holding positions with increas-
ing responsibility both in Italy and abroad and also serving as Chief Operating Officer with responsibility for commercial,
marketing and consumer after-sales services.
Appointment, suspension and dismissal of directors
The directors are appointed by the general meeting pursuant to a binding nomination by the Board. The general meeting
may at all times overrule the binding nature of such a nomination by a resolution adopted by a majority of at least half of
the votes cast in the general meeting, provided that this majority represents more than half of the issued share capital of
the Company. If a nomination has not been duly made, the general meeting shall be free to appoint the directors at its
discretion. A resolution of the general meeting to appoint a director in accordance with a nomination by the Board shall
be adopted by absolute majority of the votes cast.
The articles of association provide that a director may be suspended or dismissed by the general meeting at any time. In
addition, an executive director may be suspended by the Board at any time. A resolution of the Board to suspend the
Executive Chair must be adopted with a majority of two-thirds of the votes cast in a meeting where all directors, other
than the Executive Chair, are present or represented. A resolution of the general meeting to suspend or dismiss a director,
other than on the proposal of the Board, requires a majority of the votes cast representing more than half of the issued
share capital of the Company.
Board rules
The Board has adopted rules with respect to the holding of meetings and the decision-taking process of the Board and
other matters concerning the Board, its committees and the directors.
98
In 2023, the Board updated the Board rules to comply with the new Dutch corporate governance code, which entered
into force as for the financial year beginning on or after 1 January 2023. The most significant amendments to the Dutch
corporate governance code relate to sustainable long-term value creation, the role of stakeholders and diversity and
inclusion. In addition, the rotation plan and board profile were linked to the non-executive directors only, in line with the
Dutch corporate governance code.
The Board rules provide that Board meetings shall generally be held at the office of the Company in Italy but may also
take place elsewhere. No meetings of the Board will take place in the Netherlands. In addition, Board meetings may be
held by conference call, video conference or by any other means of communication, provided all participants can com-
municate with each other simultaneously. However, no director will participate in a meeting of the Board (including a
meeting by conference call, video conference or by any other means of communication) whilst being in the Netherlands.
Where unanimity cannot be reached, all Board resolutions are adopted by an absolute majority of the votes cast. At a
meeting, the Board may only pass resolutions if the majority of the directors are present or represented. A director may
only be represented by another director authorised in writing. Each director shall have one vote.
Board resolutions may at all times be adopted outside of a meeting, in writing or otherwise, provided that the proposal
concerned is submitted to all directors then in office and none of them objects to this manner of adopting resolutions.
Indemnification
Under Dutch law, indemnification provisions may be included in the company's articles of association. Under the articles
of association, to the extent permissible by the rules and regulations applicable to the Company, the Company is required
to reimburse current and former directors for (i) the reasonable costs of conducting a defence against claims for damages
or of conducting defence in other legal proceedings, (ii) any damages payable by them and (iii) the reasonable costs of
appearing in other legal proceedings in which they are involved as current or former directors, except proceedings pri-
marily aimed at pursuing a claim on their own behalf, based on acts or failures to act in the exercise of their duties or any
other duties currently or previously performed by them at the Company's request, if and only if and to the extent the
relevant costs and damages are not reimbursed on account of said other duties.
There shall, however, be no entitlement to reimbursement and any person concerned will have to repay the reimbursed
amount if and to the extent that: (i) a Dutch court, or in the case of arbitration, an arbitrator, has established in a final
and conclusive decision that the act or failure to act of the person concerned may be characterized as wilful (
opzettelijk
),
intentionally reckless (
bewust roekeloos
) or seriously culpable (
ernstig verwijtbaar
) conduct, unless Dutch law provides
otherwise or this would, in view of the circumstances of the case, be unacceptable according to standards of reasonable-
ness and fairness; (ii) the costs or damages directly relate to or arise from legal proceedings between a current or former
director and the Company or its Group; or (iii) the costs or financial loss of the person concerned are covered by insurance
and the insurer has paid out the costs or financial loss.
Conflicts of interest
Dutch law provides that a director may not participate in the adoption of resolutions (including deliberations in respect
of these) if he/she has a direct or indirect personal interest conflicting with the interests of the Company, which shall be
determined outside the presence of the director concerned. A conflict of interest exists in any event if in the situation at
hand the director is deemed to be unable to serve the interests of the Company and the business connected with it with
the required level of integrity and objectivity. Pursuant to the articles of association and the Board rules, any director
shall immediately report any (potential) conflict of interest to the other directors.
In addition, the Company endorses the principles and provisions of the Dutch corporate governance code that address
conflicts of interest between the Company and one or more directors. To this effect, provisions have been included in
the Board rules covering best practice provisions 2.7.1. through 2.7.6 of the Dutch corporate governance code, which
were adhered to in light of the conflicts of interest described hereafter.
If a director does not comply with the provisions on conflict of interest, the resolution concerned is subject to nullification
(
vernietigbaar
) and such director may be held liable towards the Company. As a general rule, the existence of a (potential)
conflict of interest does not affect the authority to represent the Company. Furthermore, as a general rule, agreements
and transactions entered into by the Company cannot be annulled on the grounds that a decision of its Board was adopted
99
with the participation of the conflicted director. However, under certain circumstances, a company may annul such an
agreement or transaction if the counterparty misused the relevant conflict of interest.
During the year under review, no conflict of interest occurred with respect to the Company and its directors. The Group
entered into several related party transactions with companies related to the Executive Chair, which were reviewed and
approved by the Board, and considered to be entered into on arm's length terms, upon the proposal of the independent
non-executive directors.
Related party transactions
The Company has a related party transactions policy providing for procedures for directors to notify a potential related
party transaction, which is available on the Company's website. The purpose of the related party transactions' legal frame-
work is to provide adequate protection for the interests of the Company, its subsidiaries and its stakeholders.
In 2023 all directors were asked to fill out a questionnaire to report on all related party transactions they were aware of.
All directors filled out this questionnaire. The details following from this questionnaire were included in a report on re-
lated party transactions. The report contains, with regard to the transactions entered into by the Ariston Group, a list of
the parties involved and the details of ongoing related party transactions.
The acquisition in January 2023 of CENTROTEC Climate Systems GmbH, specifically Wolf GmbH, from CENTROTEC SE led
to a substantial number of additional related party transactions, as all the CENTROTEC SE controlled companies became
statutory related parties of the Ariston Group following the acquisition. The review of all these new related party trans-
actions required extensive work to analyse the terms and conditions of these transactions. For most of these related
party transactions, third party transaction prices are charged on to the Ariston Group and only a few of these transactions
require further analysis.
No Code Related Party Transactions (as defined in the related party transactions policy) were entered into in the relevant
period. The related party transactions report was discussed among the independent non-executive directors and ap-
proved, with no significant findings.
Board committees
The Board has four committees that discuss specific issues and prepare items on which the full Board takes decisions.
The chair of each committee reports on the main points of discussion and the resulting recommendations are discussed
at the subsequent Board meeting. The four committees are:
•
the audit committee;
•
the compensation and talent development committee which acts as both the remuneration committee and the se-
lection and appointment committee;
•
the strategic committee; and
•
the environmental, social and governance (ESG) committee.
The audit committee and the compensation and talent development committee consist of non-executive directors. The
strategic committee and the ESG committee each consist of three executive and non-executive directors and Andrea
Guerra, Chief Executive Officer of Prada S.p.A., is also a member of the strategic committee.
As a result of the appointment and resignation of non-executive directors as per 2 January 2023 following the acquisition
of CENTROTEC Climate Systems GmbH, the composition of the audit committee, compensation and talent development
committee and strategic committee changed on that date. The composition of these committees set out below is there-
fore the composition as of 2 January 2023.
In 2023, the Board updated the rules of the audit committee, compensation and talent development committee and ESG
committee to comply with the new Dutch corporate governance code, which entered into force as for the financial year
beginning on or after 1 January 2023.
Audit committee
•
Lorenzo Pozza (chair)
•
Antonia Di Bella
•
Ignazio Rocco di Torrepadula
100
The audit committee is charged in particular with: (i) the monitoring of the financial-accounting process and preparation
of proposals to safeguard the integrity of said process; (ii) the monitoring of the efficiency of the internal management
system, the internal audit system and the risk management system with respect to financial and sustainability reporting;
(iii) the monitoring of the statutory audit of the annual accounts and consolidated accounts, and in particular the process
of such audit (taking into account the review of the AFM in accordance with Section 26 of EU Regulation 537/2014); (iv)
the review and monitoring of the independence of the external auditor, with a special focus on other services provided
to the Company, in accordance with the Company's external auditor independence policy; and (v) the adoption of a pro-
cedure for the selection of the external auditor and the nomination for appointment of the external auditor with respect
to the statutory audit of the annual accounts and consolidated accounts.
As a result of the appointment and resignation of non-executive directors as per 2 January 2023 following the acquisition
of CENTROTEC Climate Systems GmbH, the composition of the audit committee changed on 2 January 2023. Since then,
the members of the audit committee are Lorenzo Pozza (chair), Antonia Di Bella (member) and Ignazio Rocco di Tor-
repadula (member). All members of the audit committee are independent withing the meaning of the Dutch Corporate
Governance Code and are all financial experts.
Unless decided otherwise by the audit committee, the chief financial officer, the head of the internal audit and the ex-
ternal auditor shall attend the audit committee meetings. The audit committee shall decide whether and, if so, when the
chief executive officer shall attend audit committee meetings. The audit committee shall meet with the independent
auditor at least once a year outside the presence of the executive directors.
In 2023, the audit committee met 12 times. At these meetings several matters were discussed. The main issues were
related to:
•
Audit committee planning, meeting memoranda and reporting to Board
•
The internal audit activities and results, as well as the process enhancement implemented, including the approval of
the updated Audit Charter
•
The compliance with the EU whistleblowing law 1937/2019 and adoption of a new whistleblowing policy, procedure
and platform
•
The ERM activities and results over 2023 risk monitoring and 2024 risk assessment approach, including the ERM pro-
cess & methodology enhancement implemented
•
The performance and independence of the external auditors through the analysis of audit approaches, plans and
results, ratio between additional services over audit fees
•
The mandate of the External Auditor for the period 2025-2027
•
The financial reporting process and periodical updates with regard to the new Finance model, the financial and eco-
nomic situation of the Group, the impairment test methodology and the results according to its application
•
The tax Strategy and the related tax control framework
•
ICT and cyber security risks in the SOD (segregation on duty) project related to SAP user profiles;
•
The BCP (business continuity plan) project
Compensation and talent development committee
•
Roberto Guidetti (chair)
•
Marinella Soldi
•
Ignazio Rocco di Torrepadula
The compensation and talent development committee is charged in particular with: (i) the preparation of the remunera-
tion policy for the Board; (ii) the preparation of proposals for the remuneration of the directors; (iii) the preparation of
the remuneration report on the execution of the remuneration policy during the respective year; (iv) the preparation of
the selection criteria and appointment procedures for directors; (v) periodically assessing the functioning of the individual
directors and reporting on this to the non-executive directors; (vi) drawing up a plan for the succession of directors; and
(vii) proposing appointments and reappointments of directors. This committee, moreover, is charged with supporting the
Board in identifying incentive mechanisms for management and making strategic decisions relating to the organisation
of the Ariston Group. The Board has combined the functions and the responsibilities of the remuneration committee and
the selection and appointment committee in the compensation and talent development committee. The Company feels
101
that there would be no benefits for the Company, given its size and its organisational structure, in splitting the compen-
sation and talent development committee as prescribed under the Dutch corporate governance code.
All members of the compensation and talent development committee are independent within the meaning of the Dutch
corporate governance code.
In 2023 the compensation and talent development committee met 4 times (of which one as an extraordinary committee).
At these meetings several matters were discussed, including:
•
planning of topics for the compensation and talent development committee;
•
training requirements for executive and non-executive directors;
•
changes to the Board composition and change to the Board committees as a result thereof;
•
succession planning and talent development;
•
organisational evolution;
•
2020 long-term incentive plan vesting ;
•
2023 long-term incentive plan;
•
short-term incentive scheme and executive directors' remuneration:
a.
MBO 2022: review of performance against targets;
b.
MBO 2023: proposal of targets and ranges;
c.
executive directors' remuneration 2023
•
HR Roadmap
•
New Performance Management and STI; and
•
Governance documents (Compensation and Talent Development rules, Remuneration Policy, Diversity and Inclusion
policy).
Strategic committee
•
Paolo Merloni (chair)
•
Guido Krass
•
Andrea Guerra (Chief Executive Officer of Prada S.p.A.)
•
Enrico Vita
Ignazio Rocco di Torrepadula on 16 December 2023 was moved by a resolution of the Board from the strategic committee
to join the audit committee and the compensation and talent development committee, effective from 2 January 2023.
On
16 December 2023, Guido Krass was appointed as a member of the strategic committee under the condition prece-
dent of the closing of the acquisition of all the share capital of CENTROTEC Climate Systems GmbH, which took place on
2 January 2023.
The strategic committee is charged in particular with supporting the Board as regards business strategic decisions (in-
cluding external growth opportunities, whether integrative or transformative).
During 2023, the strategic committee met twice. At these meetings several matters were discussed, including:
•
The evolution of the Go-to-Market in the HVAC industry, and its implications for Ariston Group especially in Europe
•
The progresses in the integration of Wolf & Brink in the Group (synergies, organisational evolution, cultural journey)
•
The analysis of the M&A strategy and potential;
•
The review of Ariston Group's mid-term strategy;
•
The assessment of a specific business development potential primarily in Europe, via a dedicated strategy partnership
ESG committee
•
Roberto Guidetti (chair)
•
Paolo Merloni
•
Marinella Soldi
The ESG committee is charged in particular with supporting the Board as regards: (i) providing guidance to steer the
strategy of the Ariston Group in terms of its ESG vision and commitments; (ii) approving the Ariston Group's materiality
matrix along with the ESG plan (targets, activities and KPIs) the Ariston Group commits to engage on to deliver against
the material topics; (iii) monitoring the ESG plan execution, target achievement and progress of actions, including areas
102
of work required by ESG rating agencies; (iv) approving the Ariston Group's ESG communication plan and reporting meth-
ods related to ESG issues, such as "Declaration on non-financial issues"; (v) promoting the dissemination of a culture of
sustainability in the Ariston Group; (vi) supervising the activities of listening, dialogue and involvement of stakeholders.
During 2023, the ESG committee met twice, together with the ESG function, to discuss several topics which included:
•
the launch of the 2030 ESG plan (“Road to 100”) in 2024;
•
priority initiatives, resourcing plan, governance and budget related to the 2030 ESG plan;
•
the evolution of the reporting commitments (GRI and EU Taxonomy);
•
the impact of new acquisitions; and
•
the growing regulatory framework.
Also, a specific focus on the decarbonisation strategy was included in the agenda. The ESG committee updated the full
Board on these matters and the Board discussed the long-term strategy, the implementation thereof and the principal
risks on several occasions. For further details on the Company's approach to sustainable long-term value creation, the
Company's ESG strategy and objectives and the principal risks related thereto, please see paragraph "5.2 Non-Financial
Disclosure".
Attendance at meetings
During 2023, there were five meetings of the Board and two written resolutions adopted without holding a meeting. On
2 January 2023, the resignation of Andrea Silvestri and Paolo Tanoni and the appointment of Guido Krass and Antonia Di
Bella as non-executive directors of the Board became effective. In addition, Laurent Jacquemin resigned as executive
director and Chief Executive Officer and was appointed as non-executive director of the Board at an extraordinary general
meeting held on 27 July 2023. Maurizio Brusadelli was appointed as executive director by the general meeting on 27 July
2023 and as Chief Executive Officer by the Board on 3 August 2023.
An overview of the attendance of the individual directors per meeting of the Board and its committees set out against
the total number of such meetings is set out below:
Name
Board
In %
Audit
commit-
tee
In %
Compensation and
talent develop-
ment committee
In %
Strategic
committee
In %
ESG
committee
In %
Paolo Merloni
5/5
100%
2/2
100%
2/2
100%
Maurizio Brusadelli
3/3
100%
Antonia Di Bella
5/5
100%
11/11
100%
Roberto Guidetti
5/5
100%
4/4
100%
2/2
100%
Laurent Jacquemin
5/5
100%
Guido Krass
5/5
100%
1/2
50%
Francesco Merloni
5/5
100%
Maria Francesca Mer-
loni
4/5
80%
Lorenzo Pozza
5/5
100%
11/11
100%
Ignazio Rocco
di Torrepadula
5/5
100%
11/11
100%
4/4
100%
Marinella Soldi
5/5
100%
4/4
100%
2/2
100%
Enrico Vita
6/6
100%
2/2
100%
Independence of the non-executive directors
Each non-executive director owes a duty to the Company to properly perform its duties and to act in the Company's
corporate interest. Under Dutch law, the Company's corporate interest extends to the interests of all its stakeholders,
including its shareholders, creditors and employees. Pursuant to best practice provisions 2.1.7 and 2.1.8 of the Dutch
corporate governance code, at most one non-executive director does not have to meet the independence criteria as set
out in the Dutch corporate governance code.
In addition, for each shareholder, or group of affiliated shareholders, who directly or indirectly holds more than 10% of
the shares in the Company, there is at most one non-executive director who may be affiliated with or representing the
shareholder. In total, the majority of the non-executive directors should be independent. The non-executive directors
have determined that six of the ten non-executive directors qualify as independent in accordance with the Dutch corpo-
rate governance code.
103
The Company deviates from best practice provision 2.1.7(i) which provides that at most one non-executive director does
not have to meet the independence criteria as set out in best practice provision 2.1.8, sections i. to v. inclusive, the Dutch
corporate governance code. In 2023, three non-executive directors were not independent in accordance with best prac-
tice provision 2.1.8, sections i. to v. inclusive: Francesco Merloni and Maria Francesca Merloni for being a relative by
blood within the second decree of the Executive Chair Paolo Merloni, and Laurent Jacquemin (since 27 July 2023) for
having been an executive director of the Company in the five years prior to his appointment as non-executive director.
Diversity policy
The Company recognises the benefits of having a diverse Board and sees diversity at Board level as an important element
in maintaining a competitive advantage.
Pursuant to the Dutch Act on gender diversity, which entered into force on 1 January 2022, the Company has to set
appropriate and ambitious gender diversity target figures for the executive directors and non-executive directors within
the Board and senior management and draw up a plan to achieve these targets. In this context, 'appropriate' means that
the targets depend on the number of executive directors and non-executive directors within the Board and management,
and on the existing ratio between men and women. The targets for the Board can differ from the targets for management.
In this context 'ambitious' means that the targets should aim to make the male-female ratio more balanced than the
existing composition. In addition, the Company has to report on this to the Dutch Social and Economic Council (
Sociaal
Economische Raad
) on an annual basis, within ten months after the end of the financial year.
Pursuant to the new Dutch corporate governance code, which entered into force as for the financial year beginning on
or after 1 January 2023, companies should also set specific, appropriate and ambitious targets for other diversity and
inclusion aspects of relevance to the company than gender.
On 7 November 2023 the Board resolved to adopt, upon proposal of the compensation and talent development commit-
tee, an updated diversity and inclusion (D&I) policy of the Board and management. This policy, starting from the analysis
of the current composition of the Board and management, defines the
guidelines
by which the Company will
maintain an
adequate level of diversity
of the Board and management (for this purpose defined as employees managing teams of
people), addresses the
concrete targets
relating to diversity within the Company and the
commitment to report annually
on the results achieved.
The Company strongly believes that a diverse company is a stronger company: this is the overarching core key message
as the Company prepares organisational engagement and enrolment based on two main streams:
•
a pathway of cultural transformation to lay down the foundations for a profound change in a multi-year perspective:
the cultural transformation pathway is designed to raise awareness and engagement of the management through a
number of specific coaching and training initiatives dedicated to management. This will be coupled with an internal
communication campaign to capture unconscious bias and enhance awareness;
•
a set of concrete action items to instil a sense of urgency in steering behaviour: concrete action items will complement
the pathway through the introduction of targets in the main HR processes: selection, performance management and
succession planning.
The targets proposed by the compensation and talent development committee and approved by the Board on 7 Novem-
ber 2023 are the following:
•
the executive directors of the Board should comprise at least 50% female directors and at least 50% male directors
by the end of 2028;
•
the non-executive directors of the Board should comprise at least 33% female directors and at least 33% male direc-
tors by the end of 2025;
•
management should consist of at least 30% female employees and at least 30% male employees by the end of 2030;
and
•
creating and fostering a working environment that respects and appreciates all ways of thinking, where everyone feels
welcomed, respected and valued, and especially striving towards having a due and fair representation of different
ages and nationalities within the non-executive directors and management, and in general within the Company.
104
The composition as at 31 December 2023 was no (0%) women and 2 (100%) men for the executive directors, three (30%)
women and seven (70%) men for the non-executive directors and 304 (22%) women and 1102 (78%) men for manage-
ment (24% women and 76% men excluding Wolf & Brink, the business acquired in 2023).
The mandate of one executive director and seven non-executive directors is scheduled to expire at the annual general
meeting to be held in 2024. The compensation and talent development committee will prepare the nomination of new
directors whilst taking into account the diversity, experience, independence, knowledge and skills to allow the Board as
a whole to be effective.
The Company recognises that differences in skills, experience, education, background, nationality, gender and other char-
acteristics of people are important and enable both the Board and the Company as a whole to look at issues and to solve
problems in different ways, to respond differently to challenges, and to take more robust decisions. Pursuant to the
diversity policy, the Board is committed to ensuring diversity in skills, experience, education, background, nationality,
gender and other characteristics of directors, when selecting new candidates for the Board. At the same time, the Board
will seek to retain the right balance of requisite expertise, experience, diversity and affinity with the nature and culture
of the business of the Company.
Diversity of the Board and its committees
The tables below show the gender and age group of the members of the Board, the non-executive directors and the
committees as at 31 December 2023.
Gender
Male
Numbers
Female
Numbers
Board
75%
9
25%
3
Executive directors
100%
2
0%
0
Non-executive directors
70%
7
30%
3
Audit committee
67%
2
33%
1
Compensation and talent development committee
67%
2
33%
1
Strategic committee
100%
3
0%
0
ESG committee
67%
2
33%
1
Age group
<30
30-50
>50
Board
0%
0%
100%
Executive directors
0%
0%
100%
Non-executive directors
0%
0%
100%
Audit committee
0%
0%
100%
Compensation and talent development committee
0%
0%
100%
Strategic committee
0%
0%
100%
ESG committee
0%
0%
100%
Share capital and general meeting
Share capital
The articles of association of the Company were amended on 19 December 2022. Since then, the authorised share capital
of the Company comprises 600,000,000 ordinary shares and 50,000,000 non-listed ordinary shares, each with a nominal
value of €0.01, and 420,000,000 multiple voting shares, each with a nominal value of €0.20. See section "Disclosures
pursuant to decree article 10 EU-Directive on takeovers" for further details on the Company's issued share capital as at
31 December 2023.
105
Meetings of shareholders
At least one annual general meeting shall be held every year within six months after the close of the financial year. Addi-
tional general meetings will be held as often as the Board considers such to be necessary and within three months after
the Board has considered it to be likely that the Company's equity has decreased to an amount equal to or lower than
one-half of its paid-up and called-up share capital, in order to discuss any requisite measures.
Shareholders representing alone or in aggregate at least 10% of the issued and outstanding share capital may request
that a general meeting be convened. If no general meeting has been held within eight weeks of the shareholders making
this request, the shareholders making the request may, upon their request, be authorised by the district court in summary
proceedings to convene a general meeting.
General meetings must be held in the Netherlands in Amsterdam, Rotterdam, The Hague, or Haarlemmermeer (including
Schiphol Airport).
All convocations of the general meetings and all announcements, notifications and communications to shareholders shall
be made available on the Company corporate website. Notice of a general meeting must be given by at least 42 days
prior to the day of the meeting. The notice convening any general meeting must include, among other items, the subjects
to be dealt with, the venue and time of the general meeting, the requirements for admittance to the general meeting,
the address of the Company's website, and such other information as may be required by Dutch law.
The agenda for the annual general meeting shall list which items are up for discussion and which items are to be voted
on. In addition, the agenda shall include such items as have been included therein by the Board or the shareholders. Some
items must be dealt with as separate agenda items, such as the adoption of the annual accounts, the discussion of any
substantial change in the corporate governance structure of the Company and the allocation of the profits, insofar as
these are at the disposal of the general meeting. If the agenda of the general meeting contains the item of granting
discharge to the directors concerning the performance of their duties in the financial year in question, the matter of the
discharge must be mentioned on the agenda as separate items for the executive directors and the non-executive directors
respectively.
Shareholders holding at least 3% of the Company's issued and outstanding share capital may request, by a motivated
request, that an item is added to the agenda. Such requests must be made in writing, must either be substantiated or
include a proposal for a resolution, and must be received by the Executive Chair at least 60 days before the day of the
general meeting. No resolutions may be adopted on items other than those that have been included in the agenda (unless
the resolution is adopted unanimously during a meeting where the entire issued capital of the Company is present or
represented).
Pursuant to the Dutch corporate governance code, if one or more shareholders intend to request that an item be put on
the agenda for a general meeting that may result in a change in the Company's strategy, for example as a result of a
proposed dismissal of one or more executive directors or non-executive directors, the Board may invoke a reasonable
response time that does not exceed 180 days from the moment the Board is informed by one or more shareholders of
their intention to put an item on the agenda to the day of the general meeting at which the item is to be dealt with. The
relevant shareholder(s) should respect the response time invoked by the Board. The Board shall use the response time
for further deliberation and constructive consultation, in any event with the relevant shareholder(s) and shall explore
alternatives. At the end of the invoked response time, the Board shall report on the outcome of such deliberation and
consultation to the general meeting. The response time may only be invoked once for any given general meeting and
shall not apply to an item in respect of which the response time has previously been invoked, or to a general meeting
where a shareholder holds at least three quarters of the issued capital as a consequence of a successful public offer.
Voting rights and adoption of resolutions
At general meetings, each ordinary share and non-listed ordinary share confers a right to cast one vote and each multiple
voting share confers the right to cast 20 votes. Pursuant to the articles of association, a shareholder casting a number of
votes exceeding twice the total number of ordinary shares and non-listed ordinary shares issued and outstanding at the
record date for the relevant general meeting (the "Voting Threshold") may never cast a number of votes on its shares
exceeding the greater of:
•
the Voting Threshold; and
106
•
nine times the total number of ordinary shares and non-listed ordinary shares issued and outstanding at the record
date for the relevant general meeting or, if multiple voting shares have been issued and are outstanding, nine times
the total number of ordinary shares and non-listed ordinary shares issued and outstanding at the record date for the
relevant general meeting multiplied by the percentage of multiple voting shares held by the relevant shareholder
compared to the total number of multiple voting shares issued and outstanding at the record date for the relevant
general meeting.
Pursuant to Dutch law, as a general rule, no votes may be cast at a general meeting in respect of shares which are held
by the Company. Resolutions of the general meeting are passed by an absolute majority of the votes cast at the general
meeting, except where Dutch law or the articles of association prescribe a greater majority. The voting rights attached to
the shares may only be amended by amendment to the articles of association. The general meeting may pass a resolution
to amend the articles of association, but only on a proposal of the Board. Furthermore, a resolution to amend a provision
relating to the multiple voting shares and/or the rights and/or obligations of the (meeting of) holders of multiple voting
shares is subject to the prior approval of the meeting of holders of multiple voting shares.
Profit rights
Each issued and outstanding share ranks equally with, and will be eligible for any dividends that may be declared on, all
other shares, and will be equally entitled to the profits and (other) reserves of the company, except for the entitlement
to the conversion reserve and the liquidation distribution. All profit distributions and repayment of capital will be made
in such a way that on each share the same amount or value is distributed.
Issuance of shares
The Board is the competent body to issue shares for a period of five years from 19 December 2022 and this authorisation
can be withdrawn by the general meeting. This competence concerns all non-issued shares of the Company's authorised
capital from time to time.
After this five-year period, resolutions to issue shares shall be adopted by the general meeting or, if the general meeting
designated the Board to do so, by the Board. A resolution of the general meeting to issue shares or to designate the Board
as the competent body to issue shares, can only take place at the proposal of the Board and can only be adopted with an
absolute majority of the votes cast. The foregoing also applies to the granting of rights to subscribe for shares, such as
options, but does not apply to the issue of shares to a person exercising a previously acquired right to subscribe for shares.
An authorisation by the general meeting to designate the Board can be made each time for a maximum of five years and
can be extended each time for a maximum period of five years. An authorisation by the general meeting to designate the
Board must specify the number of shares of each class concerned which may be issued pursuant to a resolution of a
Board (which may be expressed as a percentage of the issued capital). The general meeting is not authorised to resolve
on the issuance of shares or the granting of rights to subscribe for shares to the extent it has authorised the Board as the
competent body for this purpose. A resolution of the general meeting to designate the Board cannot be withdrawn,
unless otherwise provided in the authorisation. The Company may not subscribe for its own shares on issue.
Pre-emptive rights
Upon the issue of ordinary shares, non-listed ordinary shares and multiple voting shares or the granting of rights to sub-
scribe for ordinary shares, non-listed ordinary shares and multiple voting shares, each holder of shares shall have a pre-
emptive right in respect of the shares to be issued, in proportion to the aggregate amount of the shares held by it (relative
to the entire issued share capital) with the understanding that a holder of ordinary shares may only subscribe to acquire
ordinary shares, a holder of non-listed ordinary shares may only subscribe to acquire non-listed ordinary shares and a
holder of multiple voting shares may only subscribe to acquire multiple voting shares. No pre-emptive rights exist in
respect of shares issued to a person exercising a previously acquired right to subscribe for shares.
In respect of an issuance of only ordinary shares or the granting of rights to subscribe for ordinary shares, each holder of
shares will have a right of pre-emption proportionate to the aggregate amount of their shares (relative to the entire
issued share capital), subject to the relevant limitations prescribed by Dutch law and the other provisions pursuant to the
articles of association.
107
In respect of an issuance of only non-listed ordinary shares or the granting of rights to subscribe for ordinary shares, each
holder of non-listed ordinary shares will have a right of pre-emption proportionate to the aggregate amount of their non-
listed ordinary shares, subject to the relevant limitations prescribed by Dutch law and the other provisions pursuant to
the articles of association.
In respect of an issuance of only multiple voting shares, each holder of multiple voting shares will have a right of pre-
emption proportionate to the aggregate amount of their multiple voting shares, subject to the relevant limitations pre-
scribed by Dutch law and the other provisions pursuant to the articles of association.
Exceptions to these pre-emptive rights include: (i) the issue of shares against a contribution in kind other than in cash, (ii)
the issue of shares to employees of the Company or of a group company (
groepsmaatschappij
) pursuant to an employee
share scheme or as an employee benefit, and (iii) the issue of shares to persons exercising a previously granted right to
subscribe for shares.
The Board will be the competent body to restrict or exclude pre-emptive rights for a period of five years from 19 Decem-
ber 2022. After this five-year period, pre-emptive rights relating to shares may be restricted or excluded by the general
meeting or, if the general meeting designated the Board to do so, by the Board.
An authorisation by the general meeting to designate the Board can be made each time for a maximum of five years and
can be extended each time for a maximum period of five years. Unless otherwise provided in the authorisation, it may
not be withdrawn. A resolution of the general meeting to restrict or exclude pre-emptive rights or designate the Board
as the competent body to restrict or exclude pre-emptive rights requires a majority of not less than two-thirds of the
votes cast, if less than 50% of the issued share capital of the Company is represented at the meeting.
A resolution of the Board (or, if applicable, the general meeting) to restrict or exclude the pre-emptive rights relating to
multiple voting shares will be subject to the approval of the meeting of holders of multiple voting shares granted by
resolution adopted with more than 50% of the votes in the meeting of holders of multiple voting shares.
Major shareholders
As at 31 December 2023, the voting rights attached to the issued shares in the capital of the Company held by Merloni
Holding S.p.A. represented 73.64%, by Amaranta S.r.l. represented 18.60% and by CENTROTEC SE represented 2.61%.
The market was entitled to 5.15% of the voting rights. As at 31 December 2023, the Company held 2,237,346 shares in
its own capital. Pursuant to Dutch law, as a general rule, no votes may be cast at a general meeting in respect of shares
which are held by the Company.
As at 31 December 2023, the number of shares held by Merloni Holding S.p.A. represented 58.38%, held by CENTROTEC
SE represented 11.12%, held by Amaranta S.r.l. represented 7.96% and held by the market represented 21.95% of the
total number of issued shares.
For the foreseeable future, as a result of the multiple voting shares and the concentration of ownership, Merloni Holding
S.p.A. will continue to be able to control or substantially influence matters requiring approval by the general meeting,
including the appointment and dismissal of directors, directors' remuneration, dividend distributions, the amendment of
the articles of association, capital increases, mergers and consolidations, even where Merloni Holding S.p.A. holds less
than 50% of the ordinary shares.
Merloni Holding S.p.A. is controlled by Paolo Merloni, who is the Executive Chair of the Company, and Amaranta S.r.l. is
controlled by Maria Francesca Merloni, who is a non-executive director of the Company. Paolo Merloni and Maria Fran-
cesca Merloni are siblings. CENTROTEC SE is controlled by Guido Krass, who is a non-executive director of the Company.
As directors, Paolo Merloni, Maria Francesca Merloni and Guido Krass owe a fiduciary duty to the Company's stakeholders
and they must act in a manner that they reasonably believe to be in the best interests of the Company's stakeholders. As
shareholders, Paolo Merloni, Maria Francesca Merloni and Guido Krass are entitled to direct the vote of their shares in
their own interests, which may not always be in the interests of the Company's stakeholders generally.
The articles of association do not provide for any specific provisions beyond those required by applicable law and regula-
tion to ensure that control by the major or controlling shareholders is not abused.
108
Compliance with the Dutch corporate governance code
The Dutch corporate governance code applies to the Company as the Company has its seat in the Netherlands and its
ordinary shares are listed on Euronext Milan. The Dutch corporate governance code was amended on 20 December 2022
and entered into force as for the financial year beginning on or after 1 January 2023. The most significant amendments
to the Dutch corporate governance code relate to sustainable long-term value creation, the role of stakeholders and
diversity and inclusion.
The Dutch corporate governance code is based on a 'comply or explain' (
pas toe of leg uit
) principle. Accordingly, compa-
nies are required to disclose in their board report whether or not they are complying with the various best practice
provisions of the Dutch corporate governance code that are addressed to the directors. If a company deviates from a
best practice provision in the Dutch corporate code, the reason for such deviation must be properly explained in its
directors' report.
As per 31 December 2023, the Company complies with the principles of the Dutch corporate governance code, except
for the following principles of the Dutch corporate governance code:
•
Best practice provision 2.1.7 (independent directors): the Company deviates from best practice provision 2.1.7(i)
which provides that at most one non-executive director does not have to meet the independence criteria as set out
in the Dutch corporate governance code. In 2023, three non-executive directors were not independent: Francesco
Merloni and Maria Francesca Merloni for being a relative by blood within the second decree of the Executive Chair
Paolo Merloni, and Laurent Jacquemin (since 27 July 2023) for having been an executive director of the Company in
the five years prior to his appointment as non-executive director. It is believed, however, that the involvement of
both Francesco Merloni and Maria Francesca Merloni proves the commitment of the Merloni family to participate in
the Company with a spirit of homogeneity and compactness, in order to ensure continuity of control over the Com-
pany. It is believed that Laurent Jacquemin
's deep knowledge of the Company makes him a most valuable non-
executive director.
•
Best practice provisions 2.2.6 (evaluation by the supervisory board) and 2.2.7 (evaluation of the management board):
the Company does not comply with best practice provisions 2.2.6 and 2.2.7, which provide that the Board should
evaluate its own function, the functioning of the various committees of the Board and of the individual Board mem-
bers at least once per year. The Board holds the view that a self-assessment does not provide any significant benefits,
as it is not expected that Board members will be critical about their own functioning. The Board is also of the view
that involving a third-party adviser will not change this and this would just generate a cost for the Company.
•
Best practice provision 2.3.2 (establishment of committees): the Company does not comply with best practice provi-
sion 2.3.2, which provides that if the Board consists of more than four members, it shall appoint an audit committee,
a remuneration committee and a selection and appointment committee. The Board has combined the functions and
the responsibilities of the remuneration committee and the selection and appointment committee in one committee,
the compensation and talent development committee. The Company feels that there would be no benefits for the
Company, given its size and organisational structure, in splitting the compensation and talent development committee
as prescribed under the Dutch corporate governance code.
•
Principle 2.3.7 of the Dutch corporate governance code (vice-chairman of the Board): the Company does not comply
with best practice provision 2.3.7, which provides that the vice-chairman of the Board should deputize for the Chair
when the occasion arises. Pursuant to the articles of association, the Board may designate one or more other directors
as vice-chairman of the Board. However, so far, the Company feels that there would be no benefits for the Company,
given its size and organisational structure, in such an appointment.
•
Best practice provision 3.1.2 v. (variable remuneration): the Company does not fully comply with best practice provi-
sion 3.1.2, as the unvested phantom stock options have been converted into restricted share units to which no per-
formance metrics are applied. As the original phantom stock option plans were granted before the initial public offer-
ing of the Company, the Company elected to convert the outstanding unvested phantom stock options under the
2019 and 2020 plans into RSUs. The RSUs are intrinsically and functionally linked to the continuation of the benefi-
ciary’s relationship with the Company or its subsidiaries at vesting. The Company believes a conversion into RSUs was
more appropriate given the nature of the existing plan. The converted RSUs partially vested in 2022 and the remainder
vested in 2023 and the Company now complies with the specific best practice provision after the converted RSUs
have vested. All restricted share units granted since 2022 are linked to performance conditions.
109
•
Best practice provision 3.2.3 (severance payments): the Company does not comply with best practice provision 3.2.3,
which provides that the remuneration of executive directors in the event of dismissal should not exceed one year's
salary (the 'fixed' remuneration component). The employment agreement of the Executive Chair provides for the
standard indemnity upon termination of the relationship as set out in the applicable collective bargaining agreement,
the pay-out on which depends on the duration of the employment agreement and could be more than one year’s
salary. The management agreement of the chief executive officer provides that, upon termination by the Company
and existing certain conditions, the chief executive officer is entitled to a one-off severance equal to an amount of up
to two years of their remuneration as manager (net of any amount paid as non-compete obligation consideration).
The Company wishes to respect the terms and conditions of the aforementioned agreements, since these agreements
were entered into by the Company before the initial public offering of the Company.
Disclosures pursuant to decree article 10 EU-Directive on takeovers
In accordance with the Dutch Takeover Directive (Article 10) Decree (
Besluit artikel overnamerichtlijn
, the "Decree"), the
Company makes the following disclosures:
a)
At 31 December 2023, the issued share capital of the Company consisted of 125,505,005 ordinary shares and
22,095,194 non-listed ordinary shares with a nominal value of € 0.01 each, jointly representing 3.18% of the aggregate
issued share capital, and 225,000,000 multiple voting shares with a nominal value of € 0.20 each, representing 96.82%
of the aggregate issued share capital.
For information on the rights attached to ordinary shares, non-listed ordinary shares and multiple voting shares, ref-
erence is made to the articles of association which can be found on the Company's website. To summarise, the rights
attaching to ordinary shares, non-listed ordinary shares and multiple voting shares comprise pre-emptive rights upon
the issue of shares, the right to attend the general meetings of the Company and to speak and vote at such meetings
and to resolve on and the entitlement to the distribution of such amount of the Company's profit as remains after
allocation to the reserves. Ordinary shares, non-listed ordinary shares and multiple voting shares rank
pari passu
and
will have equal rights and obligations with respect to all matters, including profit distributions, with the exceptions as
set out in the articles of association, including the entitlement to voting rights as set out in article 26.1 of the articles
of association, the conversion reserve and the liquidation distribution referred to in article 36.3 of the articles of
association.
b)
The Company has imposed no limitations on the transfer of ordinary shares and non-listed ordinary shares. Article 16
of the articles of association provides for transfer restrictions for multiple voting shares (right of first refusal). If a
holder of multiple voting shares intends to transfer to any third party (be it a shareholder or not) one or more multiple
voting shares, the other holders of multiple voting shares shall have the right, in accordance with the procedure out-
lined in article 16 of the articles of association, to exercise a right of first refusal.
c)
For information on participations in the capital of the Company for which a disclosure obligation exists under Sections
5:34, 5:35 and 5:43 of the Dutch Financial Supervision Act (
Wet op het financieel toezicht
), please see "Major share-
holders" in this Corporate Governance report. There you will find a list of shareholders who are known to the Company
to have holdings of 3% or more at the stated date.
d)
No special control rights or other rights accrue to shares in the capital of the Company other than that a multiple
voting share confers the right to cast 20 votes, subject to a voting threshold, all in accordance with the terms and
conditions as set out in article 26.1 of the articles of association. Reference is made to "Share capital and general
meeting", subparagraph "Voting rights and adoption of resolutions" in this Corporate Governance report.
e)
A mechanism for verifying compliance with a scheme allowing employees to subscribe for or to acquire shares in the
capital of the Company or a subsidiary if the employees do not arrange for such verification directly is not applicable
to the Company.
f)
No restrictions apply to voting rights attached to the shares in the capital of the Company, nor are there any deadlines
for exercising voting rights other than the restriction of the number of votes that may be cast on multiple voting
shares as set out in article 26.1 of the articles of association describing the voting threshold and further explained in
"Share capital and general meeting", subparagraph "Voting rights and adoption of resolutions" in this Corporate Gov-
ernance report. Except by virtue of the different voting rights attached to the ordinary shares and non-listed ordinary
110
shares (one vote per share) and the multiple voting shares (20 votes per share, subject to
the application of a voting
threshold), none of the shareholders will have any voting rights different from any other shareholders.
g)
The Company is not aware of the existence of any agreements with shareholders of the Company which may result
in restrictions on the transfer of shares or limitation or voting rights, other than (a) a shareholders' agreement be-
tween Merloni Holding S.p.A. and Amaranta S.r.l entered into on 26 October 2021 and (b) lock-up provisions included
in the agreement for the sale and purchase of CENTROTEC Climate Systems GmbH entered into between CENTROTEC
SE and Ariston Holding N.V. on 15 September 2022.
The shareholders agreement provides as follows:
(i)
Merloni Holding S.p.A. shall procure that one person indicated by Amaranta S.r.l. is appointed as director
so long as Amaranta S.r.l. holds at least 7% of issued share capital of the Company;
(ii)
should Merloni Holding S.p.A.:
a.
decide to sell a number of multiple voting shares so that it loses control over the Company, then Ama-
ranta S.r.l. will be entitled to tag its multiple voting shares to the sale of multiple voting shares held by
Merloni Holding S.p.A.;
b.
receive an offer for the entirety of the outstanding multiple voting shares, then Merloni Holding S.p.A.
will be entitled to drag along the multiple voting shares held by Amaranta S.r.l.;
(iii)
Merloni Holding S.p.A. shall be entitled to acquire from Amaranta S.r.l. 6,000,000 multiple voting shares in
exchange for the same amount of ordinary shares by virtue of a call option; and
(iv)
each of Merloni Holding S.p.A. and Amaranta S.r.l. shall inform the other party in case it wishes to convert
its multiple voting shares into ordinary shares.
Pursuant to the lock-up provisions included in the sale and purchase agreement, CENTROTEC SE may not transfer the
41,416,667 ordinary shares (of which 22,095,194 non-listed ordinary shares) it holds in the capital of the Company
following the sale of CENTROTEC Climate Systems GmbH until 2 January 2023 and may not transfer more than
20,708,332 ordinary shares until 2 January 2025.
h)
The rules governing the appointment and dismissal of directors are stated in the articles of association. All directors
are appointed by the general meeting. The Board nominates a candidate for each vacant seat. A nomination by the
Board will be binding as described above under "Board" in this Corporate Governance report. Directors are appointed
for a period of time to be determined by the general meeting, ending not sooner than immediately after the general
meeting held in the first year after the year of their appointment and not later than immediately after the general
meeting held in the fourth year after the year of their appointment.
i)
The articles of association allow the Company to cooperate in the issuance of registered depositary receipts for
shares, but only pursuant to a resolution to that effect by the Board. No depositary receipts have been issued for
shares in its capital with the cooperation of the Company.
The general meeting may at any time dismiss or suspend any director. If the Board proposes the dismissal of a director
to the general meeting, the general meeting can resolve upon such dismissal by a resolution adopted by an absolute
majority of the votes cast.
If the Board has not made a proposal for the dismissal of a director, the general meeting can only resolve upon the
dismissal of the director by a resolution adopted by an absolute majority of the votes cast, representing more than
half of the issued capital of the Company. Executive directors may at all times also be suspended by the Board. A
resolution of the Board to suspend the Executive Chair must be adopted with a majority of two thirds of the votes
cast in a meeting where all directors, other than the Executive Chair, are present or represented. If either the Board
or the general meeting has resolved upon a suspension of a director, the general meeting shall within three months
after the suspension has taken effect, resolve either to dismiss the director with due observance of the provisions in
the articles of association, or to terminate or continue the suspension, failing which the suspension shall lapse. A
resolution to continue the suspension may be adopted only once and in such an event the suspension may be contin-
ued for a maximum period of three months commencing on the day that the general meeting adopted the resolution
to continue the suspension. If the general meeting has not decided to terminate or to continue the suspension within
the required period, the suspension shall lapse.
111
The rules governing an amendment of the articles of association are included in article 35 of the articles of association
and require a resolution of the general meeting, but only on a proposal by the Board. The prior approval of the meet-
ing of holders of multiple voting shares is required for an amendment of a provision relation to the multiple voting
shares and/or the rights and/or the obligations of the (meeting of) holders of multiple voting shares.
j)
The general powers of the Board are stated in article 18 of the articles of association. Pursuant to article 21.1 of the
articles of association, the general authority to represent the Company is vested in the Board and the Executive Chair.
The Board has granted specific representation powers to Maurizio Brusadelli, in his capacity as Chief Executive Officer
of the Company.
According to article 7.1 of the articles of association, the Board will be the competent corporate body to issue the
shares for a period of five years with effect from 19 December 2022. The Board is also authorised to limit or exclude
pre-emptive rights of shareholders on any issue of shares or granting rights to subscribe for shares, for the same term.
After the five-year term, shares may be issued pursuant to a resolution of the general meeting unless the Board is
designated to do so by the general meeting. Such designation can be made each time for a maximum period of five
years and can be extended each time for a maximum period of five years. A designation must determine the number
of shares of each class concerned which may be issued pursuant to a resolution of the Board. The resolution of the
general meeting to designate the Board as the body authorised to issue shares cannot be withdrawn by the general
meeting, unless otherwise provided in the authorisation. The body resolving to issue shares must determine the issue
price and the other conditions of issuance in the resolution to issue. After the five-year term, pre-emptive rights may
be restricted or excluded by a resolution of the general meeting. The general meeting may designate this competence
to the Board for a period not exceeding five years, provided that the general meeting has also authorised the Board
to issue shares. Unless otherwise stipulated at its grant, this authorisation cannot be withdrawn.
The Company is entitled to acquire fully paid-up shares in its capital. The terms and conditions for the acquisition of
shares by the Company in its capital are set out in article 10 of the articles of association.
k)
The Company is not a party to any significant agreements which will take effect, will be altered or will be terminated
upon a change of control of the Company as a result of a public offer within the meaning of section 5:70 of the Dutch
Financial Supervision Act (
Wet op het financieel toezicht
), unless certain of the loan agreements entered into by the
Company contain clauses that, as is customary for financing agreements of similar type, may require early repayment
or termination in the event of a change of control of the Company.
The Company did not enter into any agreement with a director or employee of the Company providing for a payment
upon the termination of employment as a result of a public offer within the meaning of section 5:70 of the Dutch
Financial Supervision Act (
Wet op het financieel toezicht)
.
Statements by the Board
Ariston's consolidated and company financial statements for 2023 have been prepared in accordance with the IFRS as
adopted by the EU and with Part 9, Book 2 of the Dutch Civil Code.
In accordance with best practice 1.4.3 of the Dutch corporate governance code and based on the assessment performed,
the Board believes that, as at 31 December 2023, the Group’s and the Company’s internal control over financial reporting
is considered effective and that:
a) the Board report provides sufficient insights into any material weaknesses in the effectiveness of the internal risk
management and control systems (reference is made to section 5.1 “Risk management”);
b) the internal risk management and control systems are designed to provide reasonable assurance that the financial
reporting does not contain any material inaccuracies (reference is made to section 5.1 “Risk management”);
c)
based on the current state of affairs, it is justified that the financial statements are prepared on a going concern basis
(reference is made to paragraph 3.i. of the “Notes to the consolidated financial statements"); and
d)
the Board report states those material risks and uncertainties that are relevant to the expectation of the Company’s
continuity for the period of twelve months after the preparation of this annual report (section 5.1.3 “Main risks and
uncertainties to which the Group is exposed").
112
As required by section 5:25c paragraph 2(c) of the Dutch Financial Supervision Act, the Board declares that, to the best
of its knowledge:
a.
the financial statements provide a true and fair view of the assets, liabilities, financial positions and profit or loss for
the year of the Company and its subsidiaries;
b.
the Board report provides a fair view of the position at the balance sheet date and developments during the year
under review of the Company and its subsidiaries, together with a description of the principal risks and uncertainties
that the Company and the Group face.
Paolo Merloni
Executive Chair
Maurizio Brusadelli
Chief Executive Officer
Antonia Di Bella
Non-executive director
Roberto Guidetti
Non-executive director
Laurent Jacquemin
Non-executive director
Guido Krass
Non-executive director
Francesco Merloni
Non-executive director
Maria Francesca Merloni
Non-executive director
Lorenzo Pozza
Non-executive director
Ignazio Rocco di Torrepadula
Non-executive director
Marinella Soldi
Lead non-executive director
Enrico Vita
Non-executive director
5.4
Remuneration report
Introduction
This remuneration report summarises the guidelines and the principles followed by the Company in order to define and
implement the remuneration policy. In addition, this remuneration report provides the remuneration paid to executive
directors and non-executive directors for the year ended 31 December 2023.
The remuneration of the executive directors comprises base remuneration (fixed remuneration and fees, benefits and
perquisites) and variable incentives (short-term and long-term) and the remuneration of non-executive directors com-
prises an annual fixed fee.
The remuneration policy for the directors was adopted by the general meeting on 4 May 2023. The remuneration policy
aims to contribute to the Group's business strategy and is expected to enable the Company to achieve its business objec-
tives. The non-executive directors are responsible for the implementation and monitoring of the remuneration policy.
In accordance with Dutch law, the remuneration policy will be submitted to the general meeting at least every four years,
as well as each time in case of amendments to the remuneration policy. Pursuant to the Company's articles of association,
the resolution of the general meeting to adopt and amend the remuneration policy requires an absolute majority of the
votes cast.
The remuneration report for 2022 was submitted to the annual general meeting held in May 2023. 97.43% of the votes
were cast for the remuneration report and 2.57% against.
Feedback received from investors on the previous version of the remuneration policy and the remuneration report for
2022 identified as an area of concern the lack of an explicit quantitative indication of thresholds and targets, on which
the variable compensation was calculated. The Board, after careful consideration, determined that the competitive risks
associated with exposing the Company’s expectations – which in time would result in offering an insight on how the
Company’s budgets are prepared – would outweigh the advantages of transparency towards shareholders, and ultimately
hurt their economic interest.
Remuneration of the executive directors
The objective of the remuneration policy for the executive directors is to attract, reward and retain the necessary lead-
ership talent, in order to support the execution of the Group's strategic objectives, whilst for the non-executive directors
the remuneration policy aims at rewarding them appropriately for their work based on market-competitive fee levels.
The authority to establish the remuneration of the executive directors is vested with the non-executive directors, with
due observance of the remuneration policy and applicable provisions of law. Even though the Company is not in principle
in favour of making exceptions to the principles underlying the remuneration policy, the non-executives directors shall
be allowed to temporarily derogate from the remuneration policy in exceptional circumstances as defined by the Dutch
Civil Code, such as, for example, the need to attract and/or retain highly qualified key managerial competences and retain
market share in a highly competitive market, serving the long-term interest and sustainability of the Company and ensur-
ing its viability.
Remuneration principles
The remuneration policy is built on the following six principles:
•
Align short and long-term strategy:
through the variable incentives for executive directors, the Company aims to
align the short-term yearly objectives with the long-term goals of the Group. This is reflected in the grant of long-
term variable incentives, taking into account a three-year vesting period and lock-up obligations.
Such alignment is
consistent with long-term sustainability objectives.
114
•
Pay for performance:
the remuneration must reinforce the performance driven culture by rewarding top perform-
ers. It must also ensure, through the variable incentives, the alignment between executive directors’ remuneration
on the one hand and the annual business plan and sustainable value creation for the Company’s shareholders on
the other.
•
Differentiating by experience and responsibility
: the remuneration is defined in coherence with the responsibilities,
experience and competence required by the position and periodically reviewed in accordance with the performance
of the directors. In addition, in determining the remuneration policy the employment conditions of the Group are
taken into account.
•
Simple and transparent
: this principle is reflected through the remuneration policy being based on simple and cus-
tomary mechanisms. The Company is transparent in relation to the remuneration that is awarded to directors. Fur-
thermore, the achievement of the targets can be verified in publicly disclosed and easily accessible performance
results.
•
Risk prudence
: the remuneration structure aims to avoid incentives that encourage unnecessary or excessive risks
that could threaten the Group's value.
•
Compliance
: the remuneration policy complies with applicable laws and regulations. The Group adopts the highest
standards of corporate governance.
The remuneration philosophy of the Group is therefore to pay for performance, to be market driven, and to be fair and
objective.
Market perspective
Although the Group pursues its remuneration policies independently and such policies are not benchmarked against a
group of peers, market perspective is one of the factors that the non-executive directors take into account when deter-
mining adequate remuneration levels to attract and retain skilled leaders. The Company believes that the periodical re-
view of the remuneration policies adopted by companies of comparable size and economic performance may be a useful
tool to understand its competitive positioning on the labour market and attractiveness for high-quality human capital,
which the Company deems a key driver for growth, innovation and development. Such monitoring of market practices is
performed with the support of a subject-matter expert and international advisory firms that periodically provide salary
references and market trends on remuneration practices. In 2023 the Company was supported by Mercer.
The Remuneration Policy, even if defined based on the Company’s specific strategies and long-term objectives, is none-
theless in line with companies of comparable size and economic performance. In this regard, on a regular basis the Com-
pany performs an analysis of the market competitiveness of executive directors’ fixed and variable remuneration through
the support of international and subject-matter expert advisory firms.
Remuneration components of the executive directors
The remuneration policy relating to executive directors constitutes the key strategic component to attract and retain
human capital in today's tight market.
In line with the fundamental objective of achieving the most effective reconciliation of 'profitability' and 'sustainability' in
the long term, the executive director’s remuneration is aimed at supporting a managerial growth strategy oriented to-
wards the long term: long term is key in the Group’s reference market (i.e. sustainable comfort solutions for the hot water
and space heating market) where R&D projects requiring significant investment in terms of time and cost, are to be
pursued with continuity and in the long run to be successful. The remuneration policy aims, therefore, not only at the
adequate remuneration of the executive directors, but also at their adequate retention, as it is considered, in principle,
an important element, consistent with the fundamental objective of maximum sustainable profitability in the long term.
The remuneration policy for executive directors consists of:
115
(i)
base remuneration
-
fees and remuneration
-
benefits and perquisites
(ii)
variable incentives
-
short-term incentive ("STI")
-
long-term incentive ("LTI")
Component
Purpose
Terms and conditions
Executive directors’
fee and remunera-
tion
Compensate for the individual’s experi-
ence, skills, duties, responsibilities and the
contribution of the individual within the
Company.
Fixed remuneration is:
1.
internally consistent
2.
externally competitive
3.
reviewed periodically
Benefits and
Perquisites
Provide value to the professional working
life in relation to status, role complexity
and grading.
Benefits include health insurance, disability and life
insurance, a directors' and officers' liability insurance
(D&O), mobility allowance or travel expenses when
appropriate, and employee benefits plans as offered
at any given point.
STI
Ensure executive directors’ alignment with
focus on the annual business plan as set by
the Board.
The short-term incentive is conditional upon the
achievement of the following performance targets:
1.
Adjusted EBIT (60%)
2.
Turnover* (20%)
3.
Group Quality Index (20%)
LTI
Achieve growth results in medium and long
term and align executive directors’ inter-
ests with the pursuit of the priority objec-
tive of sustainable creation of value for
shareholders.
The long-term incentive is conditional on the
achievement of the following performance targets:
1.
Adjusted EBIT/Net Sales* matrix (70%)
2.
Relative TSR (15%)
3.
ESG objective (15%)
* The terms Turnover and Net Sales are to be considered equivalent.
Simulated scenarios of the possible outcomes of the variable incentive components and their effect on the remunera-
tion of the executive directors are conducted in accordance with the Dutch corporate governance code.
Base remuneration
The purpose of the fixed remuneration is to compensate the executive directors for their individual experience, skills,
duties, responsibilities and their contribution to the Company. Such compensation of each executive director is a fixed
cash compensation paid on a monthly basis, which includes holiday allowances and other local statutory requirements
per country.
The Company ensures that the fixed remuneration is: (i) internally consistent (i.e. in line with the role), (ii) externally
competitive and (iii) reviewed periodically.
Each year the compensation and talent development committee reviews the fixed remuneration and decides whether
circumstances justify adjustments.
All executive directors are beneficiaries of a directors and officers’ liability insurance policy ("D&O") at market conditions
for this type of coverage. The insurance policy covers losses resulting from claims made against the executive directors
for wrongful acts committed in their respective functions and for which they have been recognised accountable. Execu-
tive directors are also entitled to other benefits such as health insurance, disability and life insurance, mobility allowance
or travel expenses, representation costs and to participate in whatever all-employee benefits plans may be offered at any
given point.
Additional benefits and perquisites may be offered to the executive directors in case of a relocation or an international
assignment, such as relocation support, storage costs, expatriation allowance, housing support, reimbursement of flight
116
costs, reimbursement of costs of temporary living arrangements and other benefits which reflect local market practice,
all in accordance with the applicable mobility policy.
Neither the Company nor any of its subsidiaries shall grant personal loans, guarantees or the like to executive directors
except within the framework of its usual business operations, on conditions which apply to all employees and with the
prior approval of the Board. No remission of loans to the executive directors shall be granted.
Various factors may be considered when determining any annual base remuneration changes, including, but not limited
to, business performance, personal performance, the scope and nature of the role, salary increases of the Group's global
workforce, relevant market benchmark data and local economic indicators, such as inflation and cost-of-living changes,
to ensure that the remuneration is fair, sensible and market competitive. The actual annual base remuneration and any
annual increases will be disclosed in the annual report.
Short-term incentive
The short-term incentive ("STI") aims to ensure that the executive directors, and other selected eligible employees, are
well incentivised to achieve the Group’s quantitative performance targets in the short-term. The purpose of the STI is to
ensure executive alignment with and focus on the annual business plan as set by the Board. At the beginning of each
year, the compensation and talent development committee proposes to the Board (i) the base amount of the bonus for
each executive director and (ii) target ranges, based on the Group business plan, whereby the pay-out is equal to 100%
of the target amount if the targets as per the business plan are met, while the pay-out will range from 50% to 150% of
the target amount depending on whether the actual performance is below the target but within a selected gate(thresh-
old) or above the target.
At the beginning of the following year, the compensation and talent development committee reviews the performances
against the targets, based on the financial records of the Group as audited by the external auditor.
There are three performance indicators as follows:
(i)
Target A identifies the Group EBIT adjusted (60% of the global performance target);
(ii)
Target B identifies the Group turnover (20% of the global performance target); and
(iii)
Target C identifies the Group Quality Index (20% of the global performance target).
Target C is designed to push the quality of the product, as sustainable quality contributes to the Group performance in
the long run and is calculated as a weighted combination of a set of single KPIs measuring the quality of the product along
its lifecycle: from manufacturing to parts supply, product development and after sales (warranty spending). Accordingly,
a portion of the short-term incentive contributes to the Group's strategy, the long-term interests of the Group and its
sustainability.
The short-term incentive of the executive directors is based on financial and economic performance measures and, there-
fore, without directly taking into account specific qualitative performance objectives that are non-financial and/or related
to corporate social responsibility. This choice is based on the consideration that socially responsible behaviour, which the
Group is inspired by with the utmost commitment and rigour, should in any case be reflected, in the long term, in the
financial results of the Company and the Group. If the short-term incentive targets are met, the short-term incentive is
paid the year following the relevant performance period once the predetermined performance objectives are verified.
The STI pay-out will be nil if: (i) none of the performance gates (threshold) are reached; or (ii) net profit of the year as
reported in the consolidated financial statements will be equal to zero, or a net loss for the period will be reported
.
Long-term incentive
LTI Plan
Executive directors are eligible for grants under the Company’s long-term incentive plan ("LTIP"), as amended from time
to time, and as approved by the general meeting. LTIP aims at providing incentives for the executive directors – and other
selected eligible Group employees identified according to the banding model adopted by the Company – to achieve
117
growth results in the medium and long term and at ensuring executive alignment with the pursuit of the key objective of
sustainable creation of value for shareholders.
The long-term incentive awards under the LTIP are made available annually (rolling grants) in the form of performance
share units (PSU).
Usually at the beginning of each year, the compensation and talent development committee proposes to the Board: (i)
the size of the grant for each executive director, with a maximum value at target not exceeding 150% of the base remu-
neration; and (ii) the target pay-out opportunity, for each executive director set at 50% for the threshold achievement,
at 100% for target achievement and at 150% in case of over-performance.
The number of PSUs to be granted to the executive directors is determined by dividing the individual grant by the average
closing price of the Company’s shares on the 30 days before the grant.
The PSUs are conditional on: (i) a three-year vesting period, (ii) continuous engagement and (iii) performance testing. The
number of performance share units that vest after three years is dependent on the achievement of selected targets.
There are three performance targets as follows:
(i)
Adjusted EBIT/net sales matrix (70% of the global performance target);
(ii)
relative total shareholders return ("TSR"), measuring the performance of the ordinary shares of the Company
vis-à-vis the shares of selected competitors (15% of the global performance target);
(iii)
an environmental social governance ("ESG") objective, measuring the Scope 4 CO2 emissions avoided by 2025,
from a 2020 baseline, thanks to the renewable and high-efficiency products the Company sells with respect to
the efficiency of the installed park in the regions where the Company operates
(15% of the global performance
target).
Considering the sensitivity of the three-year plan on Adjusted EBIT and net sales, the specific targets will not be disclosed
to avoid providing information that could offer an advantage to competitors.
The relative TSR is measured against a peer group of 10 companies selected based on sector proximity, group size and
listing on the relevant stock market. For LTI 2021 the peer group is composed by Lennox, Trane, Prysmian, Carrier, Carel
Industries, A.O.Smith Corporation, Daikin, Interpump, Johnson Controls and Nibe. As regards the measurement of the
TSR for the Company and the companies of the Peer Group, it is calculated in the three-month period preceding the
beginning and the end of the performance period to sterilise any possible volatility on the market.
The time frame for assessing performance foresees a three-year vesting period with annual grants and a lock-up provision
of two years on an amount equal to 30% of the ordinary shares (net of sell to cover) accrued for the executive directors.
As a result, the LTI plan is clearly linked to the long-term interests of the Company, in line with best market practices.
Phantom stock option plan
Until Admission, the long-term incentive plan provided for the assignment of phantom stock options to executive direc-
tors. This benefit plan gave the executive directors a deferred cash bonus measured on the basis of the value of the
Company. The phantom stock options had a vesting period of three years with a subsequent exercise period of four years.
The pay-out was calculated on the increase in the Company’s equity over time.
Upon Admission this plan was terminated and the outstanding phantom stock options were converted (a) at the option
of the beneficiaries, into ordinary shares at the offer price of the Company's initial public offering or into cash (in relation
to vested phantom stock options) and (b) into restricted share units (in relation to unvested phantom stock options), with
a vesting period of three years from the date of the original grant (phantom stock options granted in 2019 vest in 2022,
phantom stock options granted in 2020 vest in 2023). The Company believes a conversion into RSUs was more appropri-
ate given the nature of the existing plan, while a new long-term incentive plan has been approved by the general meeting
providing for awards in the form of performance share units for the 2021 LTI and following years.
The executive directors chose to convert the vested phantom stock options entirely into ordinary shares.
118
Scenario analysis
When formulating the remuneration policy and before determining the individual remuneration of the executive direc-
tors, the non-executive directors conduct analyses of the possible results of the variable remuneration components and
the way in which this affects the remuneration of the executive directors.
The non-executive directors believe the remuneration policy is effective in terms of establishing a correlation between
the Company's strategic goals and the chosen performance criteria, as the main key performance criteria of the LTIP (i.e.
Adjusted EBIT/net sales matrix, TSR and an ESG objective), which represent a significant part of the executive directors'
remuneration package, support both the Company's strategy and value creation for the shareholders.
While the three performance indicators act as independent indicators, in the event that all three long-term threshold
performance targets are not achieved, there will be no variable pay vesting or pay-out for executive directors for the
relevant period.
Severance
The management agreement of the former Chief Executive Officer, Laurent Jacquemin, was entered into on 4 May 2017,
several years before the Admission. The management agreement provides that, upon termination by the Company and
subject to conditions, the chief executive officer is entitled to a one-off severance equal to an amount of up to two years
of their remuneration as manager (net of any amount paid as non-compete obligation consideration). The remuneration
used for calculating the severance includes the base salary and the short-term incentive. Following Admission, the Com-
pany elected to respect and maintain the agreement signed in 2017. In light of Laurent Jacquemin’s voluntary step down
as CEO effective 27 July 2023 no severance was paid by the Company.
The management agreement of the Chief Executive Officer, Mr. Maurizio Brusadelli, provides for, upon termination by
the Company and certain conditions being met, the payment of a one-off severance equal to an amount of up to two
years of his (i) fixed remuneration and fees, and (ii) the STI target amount.
The employment agreement of the executive chair provides for the standard indemnity upon termination of the relation-
ship as set out in the applicable collective bargaining agreement.
Right to reclaim variable remuneration
In accordance with Dutch law and in line with best market practices, the non-executive directors may adjust the outcome
of the variable compensation of the executive directors if the pay-out would, in their view, be unacceptable based on
criteria of reasonableness and fairness (a 'malus'). The Company can also claim back variable payments (in whole or in
part) if the pay-out was based on incorrect information about the achievement of the targets ('claw back').
119
2023 remuneration of the executive directors
The remuneration of the executive directors is in accordance with the remuneration policy. There are no loans, advances
or guarantees provided by the Company or any undertaking belonging to the same group of the Company to or on behalf
of an executive director.
The following table summarises the remuneration received by the executive directors for the years ended 31 December
2023 and 2022:
Director, Position, Year
Base remuneration
Variable incentive
Extraordinary
items
Pension
expense
Total
remuneration
Proportion of
fixed and
variable
remuneration
Fixed Remu-
neration
Fees
Benefits and
perquisites
Short
-
term
incentive
Long
-
term in-
centive*
Paolo Merloni
Executive
Chair
2023
1,100
80
61
541
981
(1)
-
50
2,813
46% fixed
54% variable
2022
1,000
80
38
666
1,696
(2)
-
43
3,523
33% fixed
67% variable
Maurizio Bru-
sadelli
Chief Executive
Officer
(3)
2023
913
(4)
21
41
406
0
-
19
1,399
not applicable
Laurent
Jacquemin
Chief Executive
Officer
(5)
2023
583
50
37
0
981
(1)
1,000
(6)
-
2,652
not applicable
2022
900
50
79
555
1,017
(7)
-
-
2,601
40% fixed
60% variable
Notes
:
■
Fixed remuneration represents for the executive chair the base salary and the executive director fee. On 20 February 2023, the compensation and
talent development committee unanimously resolved to increase the fixed remuneration to further align on the median and LTI. Therefore, the
following proposal for the executive directors’ compensation for 2023 was presented to the Board: executive chair base salary at € 1.1 million
with a short-term incentive target of € 600,000 and LTI of € 1.1 million (award counter value) and former CEO fixed remuneration at € 1 million
and LTI of € 1 million (award counter value). The Board unanimously approved the proposal on 2 March 2023.
■
Fees represent the Board fee and the committee membership fees.
■
The short-term incentive represents the incentive to be paid for performance in 2023.
■
The long-term incentive value is calculated as follows: (i) for 2023, the LTI is valued referring to the share price on 29 December 2023 at close of
trade (€ 6.26) (and it refers to the vesting of the 2020 converted LTI phantom stock option plan) and (ii) for 2022, the LTI is valued referring to the
share price on 30 December 2022 at close of trade (€ 9.62) (and it refers to the vesting of the 2019 converted LTI phantom stock option plan).
(1)
LTI accrued value based on IFRS2 expenses is € 1,607 thousand.
(2)
LTI accrued value based on IFRS2 expenses is € 1,807 thousand.
(3)
Since 3 August 2023.
(4)
Maurizio Brusadelli’s fixed remuneration consists of (i) € 400,000 per annum for his position as general manager, (ii) € 800,000 per annum for his
position as executive director, and (iii) € 700,000 per annum for his non-compete consideration.
(5)
As until 27 July 2023.
(6)
On 3 May 2023 the Board, at the proposal of the compensation & talent development committee, approved a retention package to incentivise
Laurent Jacquemin to stay as non-executive director in case of his early resignation as Chief Executive Officer, considering his 30+ years in the
Company, his profound knowledge of the business and his vision for the long-term plans for the Group. This retention package includes the pay-
ment of a € 1 million lump sum, the continuation of his rights under the 2021 LTIP and maintenance of benefits for a value of € 35,000.
(7)
LTI accrued value based on IFRS2 expenses is € 1,084 thousand.
Short-term incentive
To determine the executive directors’ short-term remuneration, the compensation and talent development committee
selected and proposed to the Board the following metrics as performed by the executive directors in 2023:
Bandwidth pay-out level
KPI 2023
Weight
Minimum
On-target
Maximum
Group EBIT adjusted
(€ million)
60%
Group turnover
(€ million)
20%
Group Quality Index
20%
120
The pay-out level of the 2023 short-term incentive reflects the Company performance results approved by the Board of
2 March 2023.
Long-term incentive
Until Admission, the executive directors participated in the long-term incentive plan providing for phantom stock. Upon
Admission this plan was terminated and the outstanding phantom stock options were converted (a) at the option of the
beneficiaries, into ordinary shares at the offer price of the Company's initial public offering or into cash (in relation to
vested phantom stock options) and (b) into restricted share units (in relation to unvested phantom stock options), with a
vesting period of three years from the date of the original grant (phantom stock options granted in 2019 vest in 2022,
phantom stock options granted in 2020 vest in 2023). In addition, a new long-term incentive plan was approved by the
general meeting providing for awards in the form of performance share units as from 2021.
The executive directors chose to convert the vested phantom stock options entirely into ordinary shares.
The table below provides an overview of ordinary shares held by executive directors as of 31 December 2023.
Executive director
Number of ordinary shares
Paolo Merloni
442,558
Laurent Jacquemin
415,235
Maurizio Brusadelli
50,000
The table below provides an overview of the conversion result for the phantom stock options awarded in 2020 that were
unvested at Admission and converted into restricted share units at the offer price of the Company's initial public offering
and the LTIP 2021, 2022 and 2023 award of performance share units.
Director,
position
Main conditions of performance share plans
Information regarding 2023
Opening
balance
During the year
Closing balance
Plan
Performance
period
Vesting start
date
Vesting end
date
Perfor-
mance
shares on
1 January
2023
(1)
Perfor-
mance
shares
awarded
Perfor-
mance
shares
vested
Shares
vested
Share
awarded
and un-
vested
Unexer-
cised
shares
Paolo Merloni
Executive Chair
2020
2020-2022
31.03.2020
31.03.2023
156,737
0
156,737
156,737
0
156,737
2021
2021-2023
31.03.2021
31.03.2024
112,000
0
0
0
112,000
0
2022
2022-2024
28.04.2022
31.03.2025
104,948
0
0
0
104,948
0
2023
2023-2025
04.05.2023
30.03.2026
0
110,741
(2)
0
0
110,741
0
Maurizio Brusadelli
Chief Executive Of-
ficer
(3)
2023
2023-2025
03.08.2023
30.03.2026
0
208,776
(4)
0
0
208,776
(
0
Laurent Jacquemin
Chief Executive Of-
ficer
(5)
2020
2020-2022
31.03.2020
31.03.2023
156,737
0
156,737
156,737
0
156,737
2021
2021-2023
31.03.2021
31.03.2024
112,000
0
0
0
112,000
0
2022
2022-2024
28.04.2022
31.03.2025
94,453
0
0
0
94,453
0
2023
2023-2025
04.05.2023
30.03.2026
0
0
(6)
0
0
0
0
(1)
Unvested share units.
(2)
The number of PSUs to be granted to the executive chair, as resolved by the Board on 2 March 2023 on the proposal of the compensation
and talent development committee, is determined by dividing the individual award by the average closing price of the Company’s shares on
the 30 trading days before the award. Specifically, for 2023 the average closing price on the 30 trading days before the award was € 9.9331.
(3)
Since 3 August 2023.
(4)
The number of PSUs to be granted to the Chief Executive Officer, as resolved by the Board on 3 August 2023 on the proposal of the compen-
sation and talent development committee, is determined by dividing the individual award by the average closing price of the Company’s
shares on the 30 trading days before the grant. Specifically, the average closing price on the 30 trading days before the award was € 9.1007.
(5)
As until 27 July 2023.
(6)
Following the communication by the former Chief Executive Officer to the Board of 3 May 2023 about his decision to step down and resign
as CEO and executive director of the Company, no LTIP 2023 has been awarded.
121
Change of remuneration of executive directors and Company performance
The requirement in the Dutch Civil Code is to disclose this information over five financial years. However, as the Company
was incorporated in its current structure in November 2021, meaningful total remuneration information is only available
and relevant from 2021 onwards.
The following table shows a comparison of the fixed remuneration of the executive directors over the last five years who
served as executive directors in 2023.
Annual change
2019
2020
2021
2022
2023
Executive directors' fixed remuneration
(in € thousand)
Paolo Merloni
Executive Chair
1,005
995
1,003
1,118
1,241
Maurizio Brusadelli
Chief Executive Officer
(1)
N.A.
N.A.
N.A.
N.A.
974
Laurent Jacquemin
Chief Executive Officer
(2)
718
782
880
1,029
670
Executive directors' total remuneration
(in € million)
Paolo Merloni
Executive Chair
N.A.
N.A.
2,879
3,523
2,813
Maurizio Brusadelli
Chief Executive Officer
(1)
N.A.
N.A.
N.A.
N.A.
1,399
Laurent Jacquemin
Chief Executive Officer
(2)
N.A.
N.A.
2,128
2,601
2,652
Company performance
(in € million)
EBIT
134
149
171
194
285
EBITDA
209
227
247
283
417
EBIT Adjusted
149
164
203
223
314
EBITDA Adjusted
223
239
277
305
422
Average remuneration on a full-time equivalent basis of employees
(3)
Employees of the Group
N.A
N.A
54
59
65
Internal pay ratio Chief Executive Officer
(3)
Chief Executive Officer vs em-
ployees of the Group
N.A.
(4)
N.A.
(4)
40
44
N.A.
(5)
(1)
Since 3 August 2023
(2)
As until 27 July 2023
(3)
The population composition changes across the years in terms of FTE, mix and countries
(4)
Not available as the Company was not listed in 2019 and 2020
(5)
In 2023 there is no relevant full year data for the CEO remuneration to be used in the calculation of the “formal” pay ratio, as the new CEO
has been appointed on August 2023
Internal pay ratio chief executive officer based on fixed remuneration
In accordance with Dutch law and the Dutch corporate governance code, the internal pay ratio is an important factor in
determining the remuneration policy. The Dutch corporate governance code was amended on 20 December 2022 and
entered into force as for the financial year beginning on or after 1 January 2023. Pursuant to the new version of the Dutch
corporate governance code 'pay ratios' is understood to mean the ratio between (a) the total annual remuneration of
the chief executive officer and (b) the average annual remuneration of the employees of the company and the group
companies whose financial data the company consolidates, where: (i) the total annual remuneration of the chief execu-
tive officer includes all remuneration components (such as fixed remuneration, variable remuneration in cash (bonus),
the share-based part of the remuneration, social security contributions, pension, expense allowance, etc.), as included in
the (consolidated) financial statements; (ii) the average annual remuneration of the employees is determined by dividing
122
the total wage costs in the financial year (as included in the (consolidated) financial statements) by the average number
of FTEs during the financial year; and (iii) the value of the share-based remuneration is determined at the time of assign-
ment, in line with the applicable rules under the applied reporting requirements. The Company has elected to follow this
methodology from 2022. In 2023, given the change of chief executive officer, it is not possible to determine the annual
remuneration of the chief executive officer. The pay ratio based on the annualised total remuneration (fixed remunera-
tion and variable incentive) of the new chief executive officer is equal to 75. The difference between the pay ratio of the
former and the new chief executive officer is linked to the higher overall remuneration package of the latter.
Compliance with the remuneration policy and application of performance criteria
For the Board’s 2023 remuneration, all the criteria, rules and procedures defined in the remuneration policy have been
implemented with no deviations or derogations.
Director,
position
Description of the performance
criteria and type of applicable remuneration
Relative weighting
of the performance
criteria
Actual award outcome
Paolo Merloni
Executive Chair
Short-term incentive:
Group EBIT Adjusted (
EUR million
)
60%
Short-term incentive:
Group Net Revenue (
EUR million
)
20%
Short-term incentive:
Group Quality Index
20%
Long-term incentive:
EBIT Adjusted Objective and Net revenue objec-
tive
70%
(a) [●] available in 2026
(b) [●] available in 2026
Long-term incentive:
TSR objective
15%
(a) [●] available in 2026
(b) [●] available in 2026
Long-term incentive:
Sustainability objective
15%
(a) [●] available in 2026
(b) [●] available in 2026
Maurizio Brusadelli
Chief Executive Of-
ficer
(1)
Short-term incentive:
Group EBIT Adjusted (
EUR million
)
60%
Short-term incentive:
Group Net Revenue (
EUR million
)
20%
Short-term incentive:
Group Quality Index
20%
Long-term incentive:
EBIT Adjusted objective and Net Revenue objec-
tive
70%
(a) [●] available in 2026
(b) [●] available in 2026
Long-term incentive:
TSR objective
15%
(a) [●] available in 2026
(b) [●] available in 2026
Long-term incentive:
Sustainability objective
15%
(a) [●] available in 2026
(b) [●] available in 2026
(1) Since 3 August 2023.
For the former Chief Executive Officer, as result of his early stepping down as CEO and executive director, both the STI
and LTIP 2023 will not result in any payout.
Remuneration of non-executive directors
The remuneration of non-executive directors aims to reward the non-executive directors for utilising their skills and com-
petences to the maximum extent possible to execute the tasks delegated to them. The general meeting determines the
remuneration upon proposals of the Board, which periodically sends these proposals to the general meeting.
123
Remuneration components for non-executive directors
The remuneration of the non-executive directors reflects the size of the Group, as well as the responsibilities of the role
and the time spent. Since the nature of the responsibilities of the non-executive directors is to act as independent bodies,
the remuneration is not tied to the performance of the group. Therefore, the remuneration of non-executive directors
includes fixed compensation only. The annual fixed fee for non-executive directors is € 50,000. The chair and the mem-
bers of the Board's committees are provided with a supplementary committee fee for these additional responsibilities as
set out in the table below.
Committee
Chair
Member
Compensation and talent development committee
€ 20,000
€ 10,000
Audit committee
€ 20,000
€ 10,000
Strategic committee
€ 20,000
€ 10,000
ESG committee
€ 20,000
€ 10,000
The non-executive directors (i) shall not be eligible to participate in any benefits programs offered by the Company, (ii)
will not be entitled to any severance pay, and (iii) are not eligible to participate in a pension scheme or other pension
related benefits. The non-executive directors will, however, be reimbursed for all reasonable business expenses incurred
in the course of performing their duties. Furthermore, the non-executive directors are beneficiaries of the D&O insurance
policy of the executive directors.
2023 remuneration of the non-executive directors
The remuneration of the non-executive directors is in accordance with the remuneration policy. There are no loans, ad-
vances or guarantees provided by the Company or any undertaking belonging to the same group of the Company to the
non-executive directors.
The following table summarises the remuneration received by the non-executive directors for the years ended 31 De-
cember 2023 and 2022.
Non-executive director
(in € thousand)
Fee
2023
Supplementary committee
Fee 2023
Remuneration
2023
Remuneration
2022
Laurent Jacquemin
(1)
50
0
50
50
Francesco Merloni
50
0
50
50
Marinella Soldi
50
20
70
70
Antonia Di Bella
50
10
60
0
Guido Krass
50
10
60
0
Roberto Guidetti
50
40
90
90
Maria Francesca Merloni
50
0
50
50
Lorenzo Pozza
50
20
70
70
Ignazio Rocco di
Torrepadula
50
20
70
60
Enrico Vita
50
10
60
60
(1) Since 27 July 2023.
The following table shows a comparison of the fixed remuneration of non-executive directors over the last five years who
served as non-executive directors in 2022:
124
Non-executive director
(in € thousand)
2019
2020
2021
2022
2023
Laurent Jacquemin
(1)
50
(2)
50
(2)
48
(2)
50
(2)
50
Francesco Merloni
50
50
48
50
50
Marinella Soldi
74
74
67
70
70
Antonia Di Bella
0
0
0
0
60
Guido Krass
0
0
0
0
60
Roberto Guidetti
59
59
71
90
90
Maria Francesca Merloni
50
50
48
50
50
Lorenzo Pozza
0
0
38
(3)
70
70
Ignazio Rocco di Torrepadula
0
0
38
(3)
60
70
Enrico Vita
56
53
52
60
50
(1) Since 27 July 2023.
(2) Fees received during his period as CEO.
(3) Since 15 June 2021.
6.
Ariston Holding N.V. Consolidated Report Financial Statements at 31 December
2023
INDEX – Consolidated Financial Statements
Ariston Holding N.V. – Consolidated Financial Statements at 31 December 2023
Consolidated primary statements
Consolidated income statement
Consolidated statement of other comprehensive income
Consolidated statement of financial position
Consolidated statement of cash flows
Consolidated statement of changes in shareholders’ equity
Notes to the consolidated financial statements
1.
Corporate information
2.
Significant events of the year
3.
Basis of accounting preparation
4.
Significant accounting policies
5.
Changes in accounting standards
6.
Disclosure to the Financial Statements
6.1
Income statement
6.2
Statement of Financial Position – Assets
6.3
Statement of Financial Position – Liabilities and Equity
6.4
Other Information
126
6.
Ariston Holding N.V. Consolidated Report Financial Statements at 31 December
2023
Consolidated income statement as at 31 December 2023
(in
€
million)
notes
2023
2022
REVENUE AND INCOME
Net revenue
1.1
100.0%
100.0%
Other revenue and income
1.1
1.9%
1.8%
Revenue and Income
1.1
101.9%
101.8%
OPERATING EXPENSES
Change in inventories
1.2
-36.0
-1.2%
-93.7
-3.9%
Raw materials, consumables and goods for resale
1.2
47.7%
52.3%
Services
1.3
16.7%
19.5%
Personnel
1.4
21.8%
19.3%
Depreciation and amortisation
2.1/2.2
4.3%
3.8%
Additions and release of provisions
1.5
2.2%
1.3%
Write-downs
0.0%
0.2%
Other operating expenses
1.6
1.1%
1.3%
Operating expenses
92.6%
93.7%
OPERATING PROFIT (EBIT)
1.7
9.2%
8.1%
FINANCIAL INCOME AND EXPENSE
Financial income
1.8
0.4%
0.3%
Financial expense
1.9
-44.0
-1.4%
-15.7
-0.7%
Exchange rate gains/losses
1.10
0.0%
-8.9
-0.4%
Financial Income and Expense
-30.8
-1.0%
-18.6
-0.8%
PROFIT (LOSS) ON INVESTMENTS
Profit (loss) on investments
1.11
-1.3
0.0%
0.2%
PROFIT BEFORE TAX
8.2%
7.6%
TAXES
1.12
2.0%
1.7%
24.6%
22.0%
PROFIT (LOSS) FROM CONTINUING OPERATIONS
6.2%
5.9%
NET PROFIT
6.2%
5.9%
Net profit attributable to non-controlling Interests
0.0%
0.0%
Net profit attributable to the Group
6.2%
5.9%
Basic earnings per share (€)
1.13
Diluted earnings per share (€)
1.13
127
Consolidated statement of other comprehensive income as at 31 December 2023
notes
2023
2022
(in
€
million)
NET PROFIT
3.1
Items that will not be reclassified to the income statement
Actuarial gains (losses) (*)
3.1
-5.2
Sub-total of items that will not be reclassified to the income statement
-5.2
Items that may be reclassified to the income statement
Gains (losses) from the translation of financial statements
3.1
-8.5
Net gains (losses) under cash flow hedge reserve (*)
3.1
-24.4
Sub-total of Items that may be reclassified to the income statement
-32.9
Total other gains (losses) net of taxes
-38.1
TOTAL COMPREHENSIVE INCOME
Attributable to:
- Group
- Non-controlling Interests
(*)
Tax effect included
128
Consolidated statement of financial position as at 31 December 2023
(in
€
million)
notes
2023
2022
ASSETS
NON-CURRENT ASSETS
Intangible assets
Goodwill
2.1
Other intangible assets
2.1
Total intangible assets
2.1
Property, plant and equipment
Land and buildings excluding ROU
Land and buildings ROU
Land and buildings
2.2
Plant and machinery excluding ROU
Plant and machinery ROU
Plant and machinery
2.2
Other property, plant and equipment excluding ROU
Other property, plant and equipment ROU
Other property, plant and equipment
2.2
Total property, plant and equipment
2.2
Investments in associates & Joint ventures
2.3
Deferred tax assets
2.4
Financial assets
2.5
Other non-current assets
2.6
Non-current tax receivables
2.7
Total non-current assets
CURRENT ASSETS
Inventories
2.8
Trade receivables
2.9
Tax receivables
2.10
Current financial assets
2.11
Other current assets
2.12
Cash and cash equivalents
2.13
Total current assets
ASSETS HELD FOR SALE
2.14
TOTAL ASSETS
129
Consolidated statement of financial position as at 31 December 2023
(in
€
million)
notes
2023
2022
LIABILITIES AND EQUITY
NET EQUITY
Share capital
3.1
Share premium reserve
3.1
Retained earnings and other reserves
3.1
Net profit attributable to the Group
3.1
Net equity attributable to the Group
3.1
Non-controlling interests and reserves
-0.1
Net profit attributable to non-controlling interests
Net equity attributable to non-controlling interests
-0.1
Net equity
3.1
NON-CURRENT LIABILITIES
Deferred tax liabilities
3.2
Non-current provisions
3.3
Post employment benefits
3.4
Non-current financing
3.5
Other non-current liabilities
3.6
Non-current tax liabilities
3.7
Total non-current liabilities
CURRENT LIABILITIES
Trade payables
3.8
Tax payables
3.9
Current provisions
3.10
Current financial liabilities
3.11
Current loans
3.12
Other current liabilities
3.13
Total current liabilities
LIABILITIES DIRECTLY ASSOCIATED WITH THE ASSETS HELD FOR SALE
3.14
TOTAL LIABILITIES AND NET EQUITY
130
Consolidated statement of cash flows
(in
€
million)
notes
2023
2022
CASH FLOW FROM OPERATING ACTIVITIES
1
NET PROFIT
3.1
2
- Taxes
1.12
3
- Income and expense from financing and investment activities
From 1.8 to 1.11
4
- Depreciation and amortisation excluding ROU
2.1/2.2
5
- Depreciation ROU
2.2
6
- Provisions
1.5
7
- Other adjustments
8
=
GROSS OPERATING CASH FLOW
(+1+2+3+4+5+6+7)
9
- Change in trade receivables
2.9
-5.3
-21.2
10
- Change in inventories
2.8
-32.3
-67.6
11
- Change in trade payables
3.9
-26.2
-27.0
12
- Change in other short-term assets/liabilities
-0.4
-3.4
13
- Change in provisions
-44.3
-15.6
14
- Tax paid
-74.0
-35.4
15
=
NET OPERATING CASH FLOW
(+8+9+10+11+12+13+14)
CASH FLOW FROM INVESTMENT ACTIVITIES
16
- Investments in intangible assets
2.1
-30.2
-21.0
17
- Investments in property, plant and equipment (PPE)
2.2
-128.4
-57.6
18
- Business combinations
2.1.1
-547.0
-23.9
19
- Investments in financial assets
-4.9
-30.3
20
- Change in the scope of consolidation
-1.9
21
- Proceeds from sale of intangible assets and PPE
2.1/2.2
22
=
CASH FLOW FROM INVESTMENT ACTIVITIES
(
+16+17+18+19+20+21)
-709.9
-133.8
CASH FLOW FROM FINANCING ACTIVITIES
23
-
Financial expense paid
-30.3
-7.4
24
-
Financial income collected
25
-
Financial expense pursuant to IFRS16
-2.9
-1.9
26
-
Other inflows
(outflows) of cash classified as financing
activities
1.10
-0.5
-8.9
27
-
Increase/decrease in short-term financial payables
3.5
28
-
New loans
3.5
29
-
Loans repayment
3.5
-444.7
-62.8
30
-
Dividends
3.1
-48.3
-46.4
31
-
Capital and reserves increase/distribution
32
-
Proceeds from issue of ordinary shares
33
-
Buyback/sale of treasury shares
3.1
-8.7
-12.5
34
=
CASH FLOW FROM FINANCING ACTIVITIES
(23+ / +33)
-123.4
35
=
CASH FLOW FROM CONTINUING OPERATIONS
(15+22+34)
-529.7
36
=
CASH FLOW FROM DISCONTINUED OPERATIONS
37
=
TOTAL CASH FLOW
(35+36)
-529.7
38
Effect of changes in exchange rates
-7.8
39
= TOTAL MOVEMENT IN CASH AND CASH EQUIVALENTS
(+37+38)
-537.5
40
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
PERIOD
41
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
(+39+40)
131
Consolidated statement of changes in shareholders’ equity as at 31 December 2023
CHANGES IN NET
EQUITY
(in € million)
Notes
Share
capital
Treasury
shares
Share
premium
reserve
Legal
reserve
Stock-
based
incentive
plans
reserve
Reserve
for
gains/losses
in equity
Actuarial
gains
(losses)
Retained
earnings
(losses)
and
other
reserves
Net
profit
Net equity
attributable
to the
Group
Net equity
attributable
to non-
controlling
interest
Net
Equity
Balances as at 31
December 2022
3.1
-12.5
-18.7
Changes in
ownership interests
-2.3
Business
combinations
2.1.1
Consolidated profit
allocation
-140.3
Payment of
dividends
3.1
-48.3
-48.3
-48.3
Share-based
payments
3.1
-2.4
Acquisition of
treasury shares
3.1
-8.7
-8.7
-8.7
Other changes
3.1
-0.2
-12.1
-9.8
-0.1
-9.9
Comprehensive
income (loss)
-24.4
-5.2
-8.5
-38.1
-38.1
Net profit
Balances as at 31
December 2023
3.1
-14.8
-1.6
-23.9
-0.1
CHANGES IN NET
EQUITY
(in € million)
Notes
Share
capital
Treasury
shares
Share
premium
reserve
Legal
reserve
Stock-
based
incentive
plans
reserve
Reserve
for
gains/losses
in equity
Actuarial
gains
(losses)
Retained
earnings
(losses)
and
other
reserves
Net
profit
Net equity
attributable
to the
Group
Net equity
attributable
to non
controlling
interest
Net
Equity
Balances as at 31
December 2021
3.1
-0.9
-26.6
-0.2
Changes in
ownership interests
Consolidated profit
allocation
-136.5
Payment of
dividends
3.1
-46.4
-46.4
-46.4
Acquisition of
treasury shares
-12.5
-12.5
-12.5
Other changes
-13.0
-0.1
Comprehensive
income (loss)
Net profit
Balances as at 31
December 2022
3.1
-12.5
-18.7
tory seat in The Netherlands Amsterdam (CCI no. 83078738, RSIN
no. 862717589, Establishment no. 000049275437, VAT Code: 01527100422, Fiscal Code 00760810572), with a secondary
office in Via Broletto 44, Milano I-20121.
The major business operations of the Group and of the Ariston Holding N.V. are in Italy and for that reason the Company
has established a secondary seat with a permanent representative office, within the meaning of article 2508 of the Italian
Civil Code.
The Parent Company’s primary purpose is to be a holding company and, with it, the management and coordination of a
series of business processes for all the subsidiaries of the Group (hereinafter the “subsidiaries”). The Group, with its
subsidiaries, is active in the business of the production and distribution of hot water and space heating and service solu-
tions with cutting-edge technology serving markets all around the world.
At 31 December 2023, voting rights are as follows (not including 0.60% of treasury shares): Merloni Holding S.p.A. 73.64%
and Amaranta S.r.l. 18.60% (equating to 66.34% of the share capital) while the market is entitled for 7.76%.
The issued share capital of the Company is held by Merloni Holding S.p.A. for 58.38%, Amaranta S.r.l. for 7.96%, the
market for 21.95%, Centrotec SE for 11.12% and for 0.60% Ariston Holding (treasury shares).
The consolidated financial statements of the Ariston Group for the year ending 31 December 2023 were approved on 5
March 2024 by the Board of the Parent Company and recognised for issue.
The consolidated financial statements comprise the following: income statement, statement of other comprehensive
income, statement of financial position, statement of cash flows, statement of changes equity (in millions of Euro) and
these notes to the financial statements.
The statement of cash flows has been prepared using the “indirect method” and shows the changes that occurred, during
the period, in the “short-term financial position” which measures the cash and cash equivalents (short-term and high
liquidity financial investments promptly convertible and not subject to the risk of a change in value), classifying the finan-
cial flows according to their origins, from operating activities, investments or financing.
These financial statements have been prepared in euro, the currency used in most of the Group’s transactions. Transac-
tions with foreign companies are included in the consolidated financial statements in compliance with the standards
described hereafter.
6.2
Significant events of the year
Significant events during the year relating to corporate actions, acquisition agreements and other significant events im-
pacting the results are reported in a dedicated section in the Directors’ report of this annual report. We summarise here
below the main events of the year:
•
On 2 January 2023, the Ariston Group completed the acquisition of 100% of the share capital of CENTROTEC Climate
Systems (now called Wolf-Brink) for € 625.8 million in cash, plus 41,416,667 Ariston Holding N.V. shares. The trans-
action, announced in September 2022, was the largest deal in the Group’s history and contributed to the increase in
the Ariston Group’s ESG focus, also reinforcing its portfolio of brands and its mid-to high-end offer of climate solu-
tions. Moreover, it further consolidated its positioning in Europe, with Germany becoming the first market;
•
On 26 April 2023, the Chinese subsidiary named ‘Atmor (Dongguan) Electronic Technology Co’ was put into liquida-
tion. As at 31 December 2023 the liquidation process is still ongoing. The contribution of the Chinese entity to the
Net Revenue and Total Assets of the Group is not material;
•
2023 will once again be marked by the evolution of events connected with the military conflict between Russia and
Ukraine, with direct impacts on geopolitical and social stability on a global scale. The world context is involved in and
impacted by the evolution of the military conflict, which is still causing serious social and economic consequences
for the countries directly or indirectly involved. Tensions between countries have increased over the last few months,
exacerbated by the fact that there is no obvious end in sight for the Russia-Ukraine conflict and the emergence of
strains in Asia and other parts of the world.
Despite the ongoing conflict, Ariston’s operations in Russia and Ukraine
are not experiencing significant impacts on their business and no going concern issue nor impairment indicators have
been identified;
•
The effects of the ‘Swords of Iron’ war can be summarised as follows. In October 2023, the ‘Swords of Iron’ war broke
out in Israel ("the war"). The ongoing war has led to a slowdown in business activity throughout the Israeli economy,
as a result, among others, of the shutdown of enterprises in the south and north of Israel, the damage to local infra-
structure, the nationwide military reserve draft for an indefinite period and the disruption of economic activity in the
entire country. The prolongation of the war is likely to have extensive nationwide effects on numerous business and
geographic segments. The potential fluctuations in commodity prices, foreign currency exchange rates, availability
of materials and manpower, local services and access to local resources are all liable to affect entities whose main
operations are conducted in or with Israel. Nevertheless and despite the above, an assessment of the principal effects
of the war on the Israel subsidiary Chromagen Ltd has been carried out with immaterial impact on net revenue, EBIT
and Operative Cash Flows.
6.3
Basis of accounting preparation
The consolidated financial statements have been prepared in compliance with the International Financial Reporting
Standards (“IFRS” as adopted by the EU), which include all International Accounting Standards in force as well as all inter-
pretations provided by the IFRS Interpretations Committee previously known as International Financial Reporting Inter-
pretations Committee (“IFRIC”) and in accordance with Part 9 Book 2 of the Dutch Civil Code.
The Parent Company prepares separate financial statements in compliance with the “accounting standards” under Sec-
tion 2:362 (8) of the Dutch Civil Code, pursuant to Part 9 of Book 2. These accounting policies are applied in the consoli-
dated IFRS financial statements and in the separate financial statements.
The financial statements were prepared based on the going concern principle, on the cost basis and taking any value
adjustments into account where appropriate, this is with the exception of the statement of financial position items, such
as financial instruments, which, under the IFRS, must be recognised at fair value and except in cases in which the IFRS
allow a different valuation criterion to be used. The carrying amount of assets and liabilities subject to fair value hedging
transactions, which would otherwise be recorded at cost, has been adjusted to take account of the changes in fair value
attributable to the risk being hedged.
The recognised financial statements provide comparative information in respect of the previous period.
i.
Going concern
The Directors consider that there are no material uncertainties that may cast significant doubt over this assumption.
They have formed a judgment that there is a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future, and not less than 12 months from the date of signing
the Company’s consolidated financial statements.
In compliance with IAS 38 and IAS 36, on a yearly basis, the Group verifies the recoverable value of intangible assets
with an indefinite life, the values were tested at aggregate level based on the values allocated to the three cash-
generating units (CGUs), identified as the lowest level at which the goodwill is monitored by the Group and is con-
sidered appropriate, given the synergies and efficiencies obtained.
The Group continues to be very sound, in all the economic and financial ratios, protecting its operations, revamping
the investment plans and not exposed to any going concern issues.
ii.
Segment reporting
For management purposes, the Group is organised into 3 business divisions (representing the three CGUs Thermal
Comfort, Burners and Components), however from a segment reporting perspective, the Group discloses a unique
reportable segment, in accordance with IFRS 8 – Operating Segments.
In assessing performance, management reviews financial information on an integrated basis for the Group as a
whole, substantially in the form of, and on the same basis as, the Group’s IFRS Financial Statements.
The information required as per IFRS 8.31-34 has been disclosed in the Section ‘6. Disclosure to the Financial State-
ments’.
iii.
Principles and basis of consolidation
The consolidated financial statements include the financial statements of the Parent Company and of the Italian and
foreign subsidiaries.
For the purposes of preparing the IFRS-compliant consolidated financial statements, all consolidated companies
have prepared a specific reporting package, at the same reference date, based on the IFRS standards that the Group
has adopted and which are described below, entailing the reclassification and/or rectification of their accounting
data prepared for disclosure purposes on a local level.
The consolidated financial statements reflect the financial position and economic result of the Parent Company and
of its subsidiaries, both directly and indirectly controlled. In particular, the consolidated entities are those under the
control of Ariston Holding N.V. either through a direct or indirect equity ownership, with the majority of voting rights
at the general meeting, or through the exercise of a dominant influence over the financial and operating policies of
the companies/entities, thus obtaining the related benefits, even without regard to equity ownership.
135
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee. Specifically, the Group
controls an investee if, and only if, the Group has:
•
Power over the investee (i.e. existing rights that give it the current ability to direct the significant activities of the
investee);
•
Exposure, or rights, to variable returns from its involvement with the investee;
•
The ability to use its power over the investee to affect its returns. Generally, there is a presumption that a ma-
jority of voting rights results in control. To support this presumption and when the Group has less than a majority
of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing
whether it has power over an investee, including: the contractual arrangement(s) with the other vote holders of the
investee; rights arising from other contractual arrangements and the Group’s voting rights and potential voting
rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated finan-
cial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
All subsidiaries are consolidated from the date when the Group acquired their control. The entities are excluded
from the consolidation area from the date when the Group ceases or loses control of them.
The Income statement and each component of the OCI are attributed to the equity holders of the parent of the
Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit bal-
ance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies
in line with the Group’s accounting policies.
All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between mem-
bers of the Group are eliminated in full on consolidation.
Compared to 31 December 2022, the scope of consolidation changed due to the following transactions:
•
On 2 January, the Ariston Group completed the acquisition of Wolf-Brink (previously announced as “CEN-
TROTEC Climate Systems”). Refer to ‘Note 2.1.1 – Business combinations’ for further details. Wolf-Brink is
included in the Ariston Group’s perimeter starting from the acquisition date.
•
In January 2023, the Spanish subsidiary ‘Chromagen Espana S.L.’ merged by incorporation into ‘Ariston
Iberica SL’ with retroactive accounting effects as from 1 January 2023.
•
In January 2023, the Dutch subsidiary ‘ATAG Verwarming Nederland B.V.’ merged by incorporation into
‘ATAG Heating B.V.’ with retroactive accounting effects as from 1 January 2023.
•
In January 2023, the Group acquired the remaining 51% of the subsidiary ‘Ariston Gulf Water Heating LLC’;
•
In April 2023, a French entity, named ‘Instachauf Société Par Actions Simplifiée’, was established. The 100%
shares are owned by Ariston Holding N.V.
•
In April 2023, a Greek entity, named ‘Ariston Group Greece P.C.’, was established. The 100% shares are
owned by the Dutch subsidiary ATAG Heating B.V.
•
In May 2023, the Swiss subsidiary ‘Ariston Thermo Parts & Service SA’ merged by incorporation into ‘El-
cotherm AG’ with retroactive accounting effects as from 1 January 2023.
•
On 31 May, the Ariston Group signed a Put and Call option agreement for the acquisition of 49% of ‘Chro-
magen Australia Pty LTD’. The Ariston Group already owned 51% of the shares of Chromagen Australia,
acquired in 2022.
136
•
On 14 June, the Ariston Group acquired 100% of the shares of the Greek entity ‘MTG Service Single Mem-
ber’. The acquisition was performed by the Greek entity ‘Ariston Group Greece P.C.’. The acquisition agree-
ment sets forth a mechanism for a subsequent adjustment of the purchase price (earn-out) based on the
results for 2022. Refer to ‘Note 2.1.1 – Business combinations’ for further details. ‘MTG Service Single
Member’ is included in the Ariston Group’s perimeter starting from the acquisition date.
•
In June 2023, a Serbian entity, named ‘Ariston Climate Solutions d.o.o.’, was established. 100% of the
shares are owned by the Dutch subsidiary ATAG Heating B.V.
•
In June 2023, the Bahrain entity ‘Ariston Thermo MEA SPC’ was liquidated and ceased to exist. The entity
was put in liquidation on 14 June 2022. Financial consequences are not material.
For further details on transactions that occurred in the year, reference should be made to the following section
“Principles and basis of consolidation”.
The list of the companies included in the basis of consolidation at 31 December 2023 is presented in the “List of
companies at 31 December 2023”.
A subsidiary is a company where the financial and operating policies are determined by the Parent Company which aims
to benefit from their activities.
The economic result of the subsidiaries, whether acquired or transferred during the period, are included in the consoli-
dated income statement from the actual acquisition date to the actual transfer date.
The share of non-controlling interests in the net assets of the consolidated subsidiaries is identified separately from the
equity attributable to owners of the Parent. This share is determined based on their percentage of interest held:
a.
in the fair values of the assets and liabilities recognised at the date of the business combination. As regards the sym-
metric put and call contracts connected to the new acquisitions, they have been represented by recognising under
financial liabilities in the statement of financial position the fair value of the payable arising from the purchase and
sale options signed at the moment of the acquisition on all the shares held by the minority shareholders, and without
the recognition of the residual equity attributable to non-controlling interests (see the subsequent section: “Business
combinations”);
b.
in the changes in equity after that date. Subsequently, the losses attributable to non-controlling interests exceeding
the equity attributable to them, are recognised under non-controlling interests.
Associates and joint ventures
The consolidated financial statements include the portion of associates’ economic results attributable to the Group. As-
sociates are companies over which the Group has a significant influence, in terms of financial and operating policies,
although not holding control or joint control. The portion of these companies’ economic results attributable to the Group
is recognised according to the equity method, from the date when the significant influence starts until it ceases to exist.
If the portion of losses of an associate attributable to the Group exceeds the carrying value of the investment recognised
in the financial statements, the amount of this investment is waived and the portion of exceeding losses is not recognised,
except and to the extent of the obligations assumed by the Group.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights
to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
The considerations made in determining significant influence or joint control are similar to those necessary to determine
control over subsidiaries. The Group’s investment in its associates and joint ventures are accounted for using the equity
method. Under the equity method, the investment in an associate or a joint venture is initially recognised at cost.
The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the associate
or joint venture since the acquisition date.
137
The income statement reflects the Group’s share of the results of operations of the associate or joint venture. Any change
in the OCI of those investees is presented as part of the Group’s OCI. In addition, when there has been a change recog-
nised directly in the equity of the associate or joint venture, the Group recognises its share of any changes, when appli-
cable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group
and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture.
The aggregate of the Group’s share of the income statement of an associate and a joint venture is shown on the face of
the income statement outside operating profit and represents profit or loss after tax and non-controlling interests in the
subsidiaries of the associate or joint venture.
The financial statements of the associate or joint venture are prepared for the same reporting period as the Group. When
necessary, adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on
its investment in its associate or joint venture. At each reporting date, the Group determines whether there is objective
evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group calculates
the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its
carrying value, and then recognises the loss in ‘Share of profit of an associate and a joint venture’ in the income statement.
Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and
recognises any retained investment at its fair value. Any difference between the carrying amount of the associate or joint
venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from
disposal is recognised in the income statement.
Transactions excluded from the consolidation process
All significant intra-group balances and transactions arising from intra-group transactions are eliminated in preparing the
Consolidated Financial Statements.
Consolidation of foreign companies
All assets and liabilities of foreign companies in a functional currency other than the euro, falling within the consolidation
area, are converted using the exchange rates in effect at the reference date of the financial statements (current exchange
rate method). Income and expenses are converted at the average exchange rate for the period. Should it be possible to
identify the specific exchange rate for individual transactions, these items are converted at the related spot rate.
The differences in the exchange rates on assets and liabilities of foreign companies in currencies other than the euro
arising from application of this method are recognised in the OCI and under equity until the shareholding is transferred.
Goodwill and adjustments to the fair values generated by the acquisition of a foreign company, are recognised in their
currency and converted using the exchange rate at the end of the reporting period.
The following table contains the exchange rates against the euro applied in the translation of financial statements ex-
pressed in another currency: (exchange rate = euro/currency).
138
2023
2022
Average
exch. Rate
Exch. Rate
at 31.12
Average
exch. Rate
Exch. Rate
at 31.12
Currency
Emirati Dirham
AED
3.9895
4.0581
3.8903
3.9171
Argentine Peso
ARS
892.9239
892.9239
188.5033
188.5033
Canadian Dollar
CAD
1.4611
1.4642
1.3674
1.4440
Swiss Franc
CHF
0.9715
0.9260
1.0034
0.9847
Chinese Renminbi
CNY
7.6669
7.8509
7.0931
7.3582
Czech Koruna
CZK
23.8223
24.7240
24.5718
24.1160
Danish Crown
DKK
7.4527
7.4529
7.4394
7.4365
Egyptian Pound
EGP
33.5101
34.1589
20.0382
26.3990
English Sterling
GBP
0.8695
0.8691
0.8526
0.8869
Croatian Kuna
HRK
7.5345
7.5345
7.5357
7.5365
Hungarian Forint
HUF
381.9359
382.8000
392.4311
400.8700
Indonesian Rupiah
IDR
16,457.0319
17,079.7100
15,608.3120
16,519.8200
Indian Rupiah
INR
89.4022
91.9045
82.4618
88.1710
Kazakhstani Tenge
KZT
494.2175
502.4800
481.4668
492.9000
Morocco Dirham
MAD
10.9737
10.9280
10.6757
11.1580
Mexican Peso
MXN
19.1258
18.7231
20.9434
20.8560
Nigerian Naira
NGN
986.1960
1,180.7533
596.1000
653.8300
Polish Zloty
PLN
4.5511
4.3395
4.6931
4.6808
Romanian New Leu
RON
4.9509
4.9756
4.9299
4.9495
Singapore Dollar
SGD
1.4533
1.4591
1.4534
1.4300
Tunisian Dinar
TND
3.3560
3.3936
3.2514
3.3221
Ukrainian Hryvnia
UAH
39.7440
41.9960
34.5027
39.0370
US Dollar
USD
1.0805
1.1050
1.0536
1.0666
Vietnam Dong
VND
25,922.9780
26,808.0000
24,497.4172
25,183.0000
Israeli New Shekel
ILS
3.9995
3.9993
3.5400
3.7554
Serbian Dinar
RSD
117.2537
116.9841
117.4202
117.3246
Australian Dollar
AUD
1.6340
1.6263
1.5156
1.5693
South African Rand
ZAR
19.9940
20.3477
17.1696
18.0986
The exchange rate used for the translation of the Nigerian naira into the presentation currency is that at which future
cash flows would be realised, in accordance with IAS 21.
Hyperinflation
If a subsidiary operates in a hyperinflationary economy, the related economic and financial results are adjusted in accord-
ance with the method established by the IFRS, before being translated into the functional currency of the Group. The
economic and financial data are restated in local currency, taking into account the current purchasing power of the cur-
rency on the financial statement date.
Argentina and Turkey fulfilled the conditions which determine the presence of hyperinflation in accordance with the IFRS
(International Financial Reporting Standards). Consequently, as of 1 July 2018, all the companies operating in Argentina
and as of 30 June 2022 all companies operating in Turkey have been required to apply IAS 29
Financial Reporting in
Hyperinflationary Economies
in preparing the financial reports.
With reference to the Group, the consolidated financial results at 31 December 2023 include the effects from the appli-
cation of the aforementioned accounting standard as in the prior year.
In accordance with the provisions of IAS 29, the remeasurement of the values in the financial statements overall requires
the application of specific procedures and a measurement process which the Group had already started in 2018 for Ar-
gentina and of 2022 for Turkey. In particular:
•
in relation to the income statement, costs and revenue were restated applying the change in the general consumer
price index, in order to reflect the fall in purchasing power experienced by the local currency at 31 December 2023.
For the purposes of the translation into euro of the income statement thus restated, the spot exchange rate at 31
December 2023 was consistently applied rather than the average exchange rate for the period. With reference to
consolidated net revenue in the period, the effect from the application of the standard entailed a negative change of
139
Argentine peso 489.0 million equal to € 0.5 million in 2023. The effect of the hyperinflation for the Turkish entity has
not been considered in the income statement given that the impact is not material and the entity has been in liquida-
tion since July 2022;
•
as regards the statement of financial position, the monetary elements were not restated, since they are already ex-
pressed in the current unit of measurement at the end date of the period; the non-monetary assets and liabilities
were instead restated to reflect the fall in purchasing power of the local currency that occurred from the date on
which the assets and liabilities were initially recorded, at the end of the period.
The Argentinian entity is now dormant. Financial consequences are not material.
The liquidation process of the Turkish entity is still ongoing. The process started in July 2022. Financial consequences are
not material.
Business combinations are accounted for using the acquisition method.
The Group verifies that a business combination falls within the definition of the IFRS guidance hence only if it is an inte-
grated set of activities and assets that, with the input and process, contribute to the output creation.
The cost of acquisition is calculated as the sum of payments transferred as part of a business combination, measured at
fair value, on the acquisition date and at the value of the portion of the shareholders’ equity relating to non-controlling
interests, measured at fair value of the net interest recognised for the acquired entity.
Ancillary costs related to the transactions are recorded in the income statement at the time they are incurred. The Group
determines that it has acquired a business when the acquired set of activities and assets include an input and a substan-
tive process that together significantly contribute to the ability to create outputs.
The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs
acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or
it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be
replaced without significant cost, effort, or delay in the ability to continue producing outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the
acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
Should the business combination be done in instalments, the interest previously held by the Group in the acquired busi-
ness is revealed at fair value on the date control is acquired, and any resulting gains or losses are recognised in the income
statement.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity. Contingent consideration, classified as an asset or liability that is a financial instrument and within the scope of
IFRS 9
Financial Instruments
, is measured at fair value with the changes in fair value recognised in the income statement
value at each reporting date with changes in fair value recognised in the income statement.
Any changes in the fair value of the net assets acquired, occurring once further information is available during the meas-
urement period – 12 months from the acquisition date – are included retrospectively in goodwill.
Goodwill acquired in business combinations is initially measured at cost, as the excess of the sum of payments transferred,
the value of the portion of shareholders’ equity relating to non-controlling interests and the fair value of any interest
previously held in the acquired business over the Group’s portion of the net fair value of the identifiable assets, liabilities
and contingent liabilities of the acquired company. If the value of the net assets acquired and liabilities assumed on the
acquisition date exceeds the sum of the transferred payments, the value of the non-controlling interests’ portion of
shareholders’ equity and the fair value of any interest previously held in the acquired business, this excess value is ac-
counted for in profit and loss as income from the transaction.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impair-
ment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s
cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities
of the acquiree are assigned to those units.
140
Recognition of non-controlling interests
Non-controlling interests relate to the portion of a subsidiary’s shareholders’ equity that is not directly or indirectly at-
tributable to the Group.
Should cross-mechanisms, which give the Group the right to acquire the non-controlling interests (call option agree-
ments) or rights to sell the same to the Group (put option agreements) or a combination of both (put and call option
agreements) be in place, an analysis is made as to whether the risks and benefits connected with the share of legal
ownership of the business to which the non-controlling interests pertain are broadly attributable to the latter or to the
Group. These rights to purchase or sell the non-controlling interests may be set at a fixed price, a variable price or a fair
value, and may be exercisable on a fixed date or at any time in the future. Each of these variables is examined to determine
the effects on the presentation of the accounts.
If the non-controlling interests have an effective involvement in the conduct of the business, those interest must continue
to be represented in addition to the Group’s shareholders’ equity and, at the same time, the financial liability relating to
the put and/or call option agreements must be recorded.
On 10 June 2021, 24.5% of the shares of the Dutch company Haas Heating B.V. were acquired by the Group through ATAG
Heating B.V.
The acquisition agreement sets forth a mechanism for a subsequent adjustment of the purchase price (earn-out) based
on a sales scheme at specific dates falling under IAS 28
Investment in Associates and Joint Ventures
.
Therefore, a liability equal to the current value of the estimated obligation as at the date of its eventual future exercise,
was recognised in the financial statements against the equity participation value.
A Share Purchase Agreement defined the purchase price at € 0.8 million and a liability for € 1.4 million is related to the
earn-out program.
For the remaining shares the agreement foresees a series of call options divided in three tranches expiring in 2024, 2025
and 2026 that are not reflected in the Financial Statements and are not material in terms of the amount.
The company is treated as a joint venture due to the fact that the shareholder has a right of veto on important business
decisions, thus valuing the participation with the equity method with the existence of a financial liability to be paid for
acquiring the entity.
Accounting treatment of the Chromagen Group Reps & Warranties
On 5 January 2022, the Ariston Group acquired 100% of the shares and voting rights of the Chromagen Group that oper-
ates in Israel, Australia and Spain.
The agreement set forth a series of representation and warranty clauses to cover the Ariston Group against previous
undisclosed liabilities not known at the date of the agreement. The Ariston Group withheld from the Purchase Price an
amount to cover those risks which will be paid to the seller as per the agreement.
The present value of this amount is equal to € 2.4 million and it is classified under current liabilities given that at the date
of the approval of these Consolidated financial statements it has been paid, precisely in January 2024.
Accounting treatment of the Put and Call Agreement for the non-controlling interest in Chromagen Australia
On 31 May 2023, the Group entered into an agreement with the Minority for the acquisition of the remaining shares. The
agreement establishes both a call option, granting the Group the right to purchase the shares, and a put option, affording
the Minority the right to sell the shares. The present value of this amount is equal to € 6.7 million. The exercise date is
set within 2 months following the approval of the Financial Statement for the FY 2025.
Accounting treatment of the MTG Service Single Member reps & warranties
On 14 June 2023, the Ariston Group acquired 100% of the shares and voting rights of MTG Service Single Member that
operates in Greece.
141
The agreement set forth representation and warranty clauses to cover the Ariston Group against previous undisclosed
liabilities not known at the date of the agreement. Ariston Group withheld from the Purchase Price an amount to cover
those risks which will be paid to the seller as per the agreement.
The present value of this amount is equal to € 0.2 million and it is classified under non-current liabilities given that the
expiry date is in 2026.
Accounting treatment of the Stenkilde VVS earn-out
During the year, the Group signed an Asset Purchase Agreement about a customer list with Stenkilde which foresees a
future payment based on the performance of the assets acquired.
The payment is scheduled annually for the five next years.
The following table summarises the fair value of the financial liabilities described above:
|
Company
|
Type
|
% Owner-
ship
|
Execution
Date
|
Local
Currency
|
€
|
|
Chromagen Group
|
Reps and Warranties
|
n.a.
|
2024
|
7.5 ILS
|
2.4
|
|
Chromagen Australia
|
Put and Call
|
49%
|
2026
|
10.9 AUD
|
6.7
|
|
MTG Service Single Member
|
Reps and Warranties
|
n.a.
|
2026
|
0.2 EUR
|
0.2
|
|
Financial liabilities related to Invest-
ments in Subsidiaries
|
9.3
|
||||
|
Haas Heating BV
|
Earn-out
|
n.a.
|
2024
|
1.4 EUR
|
1.4
|
|
Financial liabilities related to Invest-
ments in Joint ventures
|
1.4
|
||||
|
Stenkilde VVS
|
Earn-out
|
n.a.
|
From 2024
to
2028
|
1.9 DKK
|
0.3
|
|
Financial liabilities to third parties
|
0.3
|
6.4
Material accounting policies
i.
Current versus non-current classification
The Group presents assets and liabilities in the statement of financial position based on a current/non-current classifica-
tion. An asset is current when it is:
•
Expected to be realised or intended to be sold or consumed in the normal operating cycle
•
Held primarily for the purpose of trading
•
Expected to be realised within twelve months after the reporting period
Or
•
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting period.
All other assets are classified as non-current.
A liability is current when:
•
It is expected to be settled in the normal operating cycle
•
It is held primarily for the purpose of trading
•
It is due to be settled within twelve months after the reporting period
Or
•
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period
The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
ii.
Fair value measurement
The Group measures financial instruments such as derivatives, and non-financial assets at fair value at each balance sheet
date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the trans-
action to sell the asset or transfer the liability takes place either:
•
In the principal market for the asset or liability
Or
•
In the absence of a principal market, in the most advantageous market for the asset or liability, the principal or the
most advantageous market accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its best use or by selling it to another market participant that would use the asset in its best
use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within
the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measure-
ment as a whole:
•
Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
•
Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
•
Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
143
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group de-
termines whether transfers have occurred between levels in the hierarchy by re-assessing their categorisation (based on
the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
iii.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in
a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles,
excluding capitalised development costs, are not capitalised and the related expenditure is reflected in the income state-
ment in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amor-
tised over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset
may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are
reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of
consumption of future
economic benefits embodied in the asset are considered to modify the amortisation period or
method, as
appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible
assets with finite lives is recognised in the income statement in the expense category that is
consistent with the function
of the intangible assets.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually
or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the
indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective
basis.
An intangible asset is derecognised upon disposal (i.e. at the date the recipient obtains control) or when no future eco-
nomic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated
as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income
statement.
Goodwill
Goodwill arising from the acquisition of a subsidiary reflects the excess of the acquisition cost over the percentage at-
tributable to the Group, of the fair value of the subsidiary’s identifiable assets, liabilities and potential liabilities at the
acquisition date (IAS
36). Goodwill is recognised as an asset and undergoes an impairment test on an annual basis, or
more frequently if there are events or changes in the circumstances that may result in impairment losses.
For this purpose, the goodwill, if any, resulting at the acquisition date is allocated to each of the cash generating units
(CGU), which are expected to benefit from the synergy effects deriving from the acquisition. Any loss in value is identified
through valuations that are based on the capacity of each unit to produce financial flows capable of recovering the part
of goodwill allocated to it, according to the methods described hereinafter, in the section “Impairment of assets”. If the
value recoverable by the cash generating unit is below the attributed carrying value, the related impairment loss is rec-
ognised. This impairment loss is not restored if the reasons that have generated it cease to exist.
If control is lost in a subsidiary, the portion of goodwill attributable to it at the date of the sale is included in the calculation
of the gain or loss on disposal.
Internally generated intangible assets – Research and development costs
Research costs are recognised in the income statement for the period in which they are incurred.
Internally generated intangible assets deriving from the development of the Group’s products are recognised under as-
sets, only if all of the following conditions are met:
•
The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
•
Its intention to complete and its ability and intention to use or sell the asset
•
How the asset will generate future economic benefits
•
The availability of resources to complete the asset
•
The ability to reliably measure the expenditure during development
144
The capitalised development costs include only the expense incurred which may be attributed directly to the develop-
ment process.
These intangible assets with definite useful life are amortised on a straight-line basis over the respective useful life of the
product, which is normally 5 years. Any impairment losses, and any restatement, are based on the same methods de-
scribed in the section “Impairment of assets”.
If the internally generated assets cannot be recognised in the financial statements, the development costs are recognised
in the income statement for the period in which they are incurred.
Other intangible assets
Other intangible assets, whether purchased or internally produced, are recognised under assets in compliance with IAS
38
Intangible Assets
, if it is likely that the use of the assets will generate future economic benefits and when the cost of
the asset can be accurately measured.
These assets (such as concessions, licences, trademarks and software) with a definite useful life are recognised at pur-
chase or production cost and amortised on a straight-line basis over their estimated useful life. Any impairment losses,
and any restatement, are based on the same methods described in the section “Impairment of assets”.
Intangible assets with an indefinite useful life are not amortised but are subject to evaluation in order to identify any
impairment loss, yearly or more frequently, at any time there is an indication that the asset may have been impaired.
The other intangible assets recognised following the acquisition of a company are recognised separately from the good-
will, if their current value can be accurately measured.
Here below are the principles applied by the Group for intangible assets (IAS 38.118) (a) (b):
Licences
Trademarks
Development costs
Software
Useful life
Definite (5 years)
Indefinite
Definite (5 years)
Definite (4 years)
Amortisation
method used
Amortised on a straight-
line basis over the period
of the licence itself
No amortisation
Amortised on a straight-
line basis over the pe-
riod of expected future
sales resulting from the
related project
Amortised on a
straight-line basis
over the period of
the usage of the soft-
ware itself
Internally generated
or purchased
Purchased
Purchased
Internally generated
Purchased
The residual other intangible assets mainly included the purchased customer list with an average useful life of 20 years,
amortised on a straight-line basis over the period of the expected future sales from the customer relationship.
iv.
Property, plant and equipment
Property, plant and equipment are recognized at cost, net of accumulated depreciation and impairment losses, if any.
The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the
respective asset if the recognition criteria for a provision are met.
Assets with components of a significant value and with a different useful life are recognised separately when depreciated.
Under IAS 16 Property, Plant and Equipment an entity has a policy choice for the measurement of property, plant and
equipment after initial recognition. An entity may choose either the cost model or the revaluation model for entire classes
of property, plant and equipment. The Group has elected to use the cost model for all class of assets.
The depreciation is calculated on a straight-line basis, according to the cost of the asset net of all residual values, on its
estimated useful economic-technical life through the use of depreciation rates that accurately represent it. If significant
parts of these tangible assets have a different useful life, they will be stated separately. The depreciation will be based
on the following percentage rates:
145
Buildings and light constructions
from 1.8 to 3.0
Plant and machinery
from 6.0 to 15.5
Industrial and commercial equipment
from 10.0 to 25.0
Cars and internal transport vehicles
from 20.0 to 25.0
Furniture, office equipment, data processing systems
from 12.0 to 20.0
The Group reviews the estimated residual values and expected useful lives of assets at least annually.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate.
Land with no construction or annexed to residential and industrial buildings, is not depreciated since it has an unlimited
useful life.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal (i.e.
at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal.
Gains and losses arising from the sale or disposal of assets are calculated as the difference between revenue from sales
and the net carrying value of the asset, and are recognised in the income statement for the year.
v.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for consideration.
The rights of use relating to leases are recognised in a single accounting model to recognise the lease. In accordance with
this model, the entity recognizes: (1) assets and liabilities for all leases with a duration of over twelve months; (2) sepa-
rately in the income statement, the amortisation/depreciation of the recognised asset and the interest on the financial
payable recorded.
More specifically, in order to determine the value of the assets with “right of use”, the value of the related discounted
liabilities, any payments made to the lessor before signing the contract, net of the incentives received, the initial direct
costs incurred by the lessee as well as the provisions for removal and dismantling, if any, were taken into account.
Lease agreements in place within the Group include offices, warehouses, plants, machinery and vehicles and low value
assets belonging to third parties.
Lease terms generally range from 1-10 years but may contains options to extend them. Lease terms may also contain a
wide range of different conditions.
Falling under the IFRS 16 guidelines, the rights of use are valued at cost, net of accumulated amortisation and impairment
losses and are adjusted after any remeasurement of the lease liabilities. The value assigned to the rights of use corre-
sponds to the amount of the lease liabilities recognised, plus initial direct costs incurred, lease payments settled on the
start date of the agreement or previously, and restoration costs, net of any lease incentives received.
The value of the liability, discounted to its present value, as determined above, increases the right of use of the underlying
asset, and a dedicated liability is created as a contra-entry. The rights of use are amortised on a straight-line basis over
its estimated useful life or the term of the agreement, whichever is the shorter. The financial liability for leases is recog-
nised on the start date of the agreement at a total value equal to the present value of the lease payments to be made
during the term of the agreement, discounted to present value using incremental borrowing rates (IBR) when the implicit
interest rate in the lease agreement cannot easily be determined. Variable lease payments which are not linked to an
index or rate continue to be charged to the income statement as costs for the period.
After the start date, the amount recorded for the liabilities relating to lease contracts increases to reflect the accrual of
interest and reduces to reflect the payments made. Each lease payment is divided into a repayment of the capital portion
of the liability and a financial cost. The financial cost is charged to the income statement over the term of the agreement
to reflect a constant interest rate on the remaining debt portion of the liability for each period.
The term of the lease is calculated taking into account the non-cancellable period of the lease together with the periods
covered by an option to extend the agreement if it is reasonably certain that it will be exercised, or any period covered
by an option to terminate the lease contract, if it is reasonably certain it will not be exercised. The Group assesses whether
it is reasonably certain that it will exercise the options to extend or will terminate the agreements, taking into account all
the relevant factors that create a financial incentive for such decisions.
146
On the basis of practical expedients, recognition of exemptions for low-value and short-term leases, equal to € 30.2 mil-
lion for 2023 (€ 14.6 million for 2022), was not considered and € 5.5 million for 2023 (€ 5.2 million for 2022) out of scope
IFRS 16 which comprise mainly tolls and rent contracts for IT equipment.
The agreements are either included or excluded from the application of the standard based on detailed analysis carried
out for each agreement and in line with the rules laid down by IFRS standards.
Financial liabilities relating to IFRS 16 leases are initially measured at the present value of the lease payments still to be
paid.
With respect to some of its leases, the Group has the option to extend or terminate them. The Group applies judgement
when assessing whether it is reasonably certain to exercise renewal options. That said, the Group considers all relevant
factors that may create an economic incentive to exercise the options to renew or terminate the lease. After the com-
mencement date, the Group reassesses the lease term upon the occurrence of a significant event or a significant change
in circumstances which are within its control and affect whether it can exercise (or not exercise) an option to renew or
terminate the lease (e.g. investments in leasehold improvements or specific material changes to the leased asset). In
addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a
change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to de-
termine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
The exercise price for the underlying asset, in the presence of purchase options, and/or the contractual value of the
penalties, in the case of early termination of the lease, are included in the value of the financial liability only if their
exercise is reasonably certain.
Following initial recognition, financial liabilities relating to IFRS 16 leases are valued using the amortised cost method.
The discount rate at which the lease payments that are still to be paid are discounted is called the lessee’s incremental
borrowing rate and is equal to the interest rate the lessee would have paid if they had borrowed money to the value of
the right of use, with payment terms similar to the contractual duration of the lease in a similar economic environment.
Management estimated the discount rate by individual country, on the basis of the contractual duration and the total
amount of the current “lease portfolios with similar characteristics”.
vi.
Impairment of assets
At each reporting date, the Group reviews the carrying value of its tangible and intangible assets to verify whether there
is any indication that they were subject to an impairment loss. If there are indications of impairment, the Group estimates
the recoverable amount of the assets to calculate the related impairment loss. If it is not possible to estimate individually
the recoverable amount of an asset, the Group estimates the recoverable value of the cash generating unit to which the
asset belongs.
Intangible assets with an indefinite useful life, including goodwill, are assessed on an annual basis or more frequently if
there is an indication of possible impairment losses.
The recoverable amount is the higher of fair value less costs of disposal and value in use. In calculating the value in use,
the estimated future cash flows are discounted to their current value using a discount rate that reflects the current mar-
ket values relating to money and the risks associated with the asset.
If the recoverable amount of an asset (or of the CGU) is estimated to be lower than its carrying value, it is reduced to the
lower recoverable amount. Impairment losses are immediately recognised in the income statement.
If an impairment no longer has a reason to exist, the carrying value of the asset (or of the CGU), excluding the goodwill,
is increased to the new amount resulting from the estimate of its recoverable value, but not above the net carrying value
that the asset would have had if the impairment loss had not occurred. The difference is recognised in the income state-
ment.
vii.
Non-current assets held for sale and discontinued operations
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying
value and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an
asset (disposal group), excluding finance costs and income tax expense.
Non-current assets (and disposal groups) are classified as held for sale when the Group expects that their carrying value
will be recovered through sale rather than used in its operating activities. This condition is met only when the sale is highly
147
probable, the asset (or group of assets) is held for immediate sale in its current condition, and Management has commit-
ted to the sale, which should occur within 12 months from the date of classification of this item.
Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial
position.
Financial activities related to ceased or discontinued operations, net of tax effects, are recognised under one single item
in the consolidated income statement, including the comparative data of the relevant period.
viii.
Investments in associates
Investments in associates are recognised according to the equity method, starting from the date of the significant influ-
ence by the Group up to the time when this influence ceases to exist, as described in the previous paragraph “Principles
and basis of consolidation”.
ix.
Financial instruments - initial recognition and subsequent measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other
comprehensive income (OCI), and fair value through profit or loss.
In line with IFRS 9, financial assets, which are represented by debt instruments (trade receivables, financial receivables,
etc.), are classified on the basis of the business model (the way the Group manages financial assets in order to generate
cash flows) and the contractual characteristics of the cash flows (the so-called SPPI test, “solely payment of principal and
interest”), in one of the following categories:
•
amortised cost, for the financial assets held with the aim of receiving the contractual cash flows which pass the SPPI
test, since the cash flows represent solely payment of principal and interest; this category includes trade receivables,
other operational receivables included in other current and non-current assets, and financial receivables included in
other current and non-current financial assets;
•
fair value through shareholders’ equity (FVOCI), for financial assets held with the aim of collecting cash flows, both
contractual, which represent solely payments of principal and interest, and from sales. The changes in fair value sub-
sequent to initial recognition are offset under OCI and are recycled to the income statement upon derecognition;
•
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with
net changes in fair value recognised in the Income statement. This category mainly includes derivative instruments.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow charac-
teristics and the Group’s business model for managing them.
With the exception of trade receivables that do not contain a significant financing component or for which the Group has
applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing
component or for which the Group has applied the practical expedient are measured at the transaction price as disclosed
in section (e) Revenue from contracts with customers.
The Group envisages, as per the provisions of the new IFRS 9, the treatment of non-strategic investments and investment
funds shares at FVTPL; while other investments, which are considered strategic, are treated individually and, at the mo-
ment, are all valued at FVTOCI.
Contingent consideration classified as an asset (or liability) that is a financial instrument and within the scope of IFRS 9
Financial Instruments
, is measured at fair value with the changes in fair value recognised in the income statement in
accordance with IFRS 9. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair value at
each reporting date with changes in fair value recognised in the income statement.
148
For purposes of subsequent measurement, financial assets are classified in four categories:
•
Financial assets at amortised cost (debt instruments)
•
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
•
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecog-
nition (equity instruments)
•
Financial assets at fair value through profit or loss
-
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are
subject to impairment. Gains and losses are recognised in the income statement when the asset is derecognised,
modified or impaired. The Group’s financial assets at amortised cost include trade receivables, a loan to an associate
and a loan to a director included under other non-current financial assets. Trade receivables originate in the ordinary
course of business and are held within a business model with the objective to hold the receivables in order to collect
contractual cash flows that meet the ‘solely payments of principal and interest’ criterion under IFRS 9, therefore they
are measured at amortised cost using the effective interest rate method. The Group applies the amortised cost only
for trade receivables with maturities greater than one year and are discounted to present value.
-
Financial assets at fair value through OCI (debt instruments)
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses
or reversals are recognised in the income statement and computed in the same manner as for financial assets meas-
ured at amortised cost. The remaining fair value changes are recognised in OCI. Upon derecognition, the cumulative
fair value change recognised in OCI is recycled to the income statement. The Group’s debt instruments at fair value
through OCI include investments in quoted debt instruments included under other non-current financial assets.
-
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to irrevocably classify its equity investments as equity instruments des-
ignated at fair value through OCI when they meet the definition of equity under IAS 32 Financial Instruments: Presen-
tation and are not held for trading. The classification is determined on an instrument-by-instrument basis. Gains and
losses on these financial assets are never recycled to the income statement. Dividends are recognised as other income
in the income statement when the right of payment has been established, except when the Group benefits from such
proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity
instruments designated at fair value through OCI are not subject to impairment assessment. The Group elected to
irrevocably classify its non-listed equity investments under this category.
-
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with
net changes in fair value recognised in the income statement.
This category includes derivative instruments and listed
equity investments which the Group had not irrevocably elected to classify at fair value through OCI. Dividends on
listed equity investments are recognised as other income in the income statement when the right of payment has
been established.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised (i.e. removed from the Group’s consolidated statement of financial position) when:
•
The rights to receive cash flows from the asset have expired
Or
•
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a)
the Group has substantially transferred all the risks and rewards of the asset, or (b) the Group has neither transferred
nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
149
Further disclosures relating to impairment of financial assets are also provided in the following notes:
•
Disclosures for significant assumptions – refer to sub-paragraph ‘xxi. - Significant accounting judgements, estimates
and assumptions’
•
Trade receivables, including contract assets as described below
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract
and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest
rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that
are integral to the contractual terms. ECLs are recognised in two stages. For credit exposures for which there has not
been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default
events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has
been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the
Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each re-
porting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted
for forward-looking factors specific to the debtors and the economic environment.
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All fi-
nancial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly
attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings,
including bank overdrafts and derivative financial instruments.
For purposes of subsequent measurement, financial liabilities are classified in two categories:
•
Financial liabilities at fair value through profit or loss
•
Financial liabilities at amortised cost (loans and borrowings)
-
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recognition as
at fair value through profit or loss. Financial liabilities as at fair value through profit or loss also include derivative
financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships
as defined by IFRS 9. Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated at the initial date of recognition and only if the criteria in IFRS 9 are satisfied.
-
Financial liabilities at amortised cost (loans and borrowings)
This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are
subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the income state-
ment when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calcu-
lated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the
EIR. The EIR amortisation is included as finance costs in the income statement. This category generally applies to
interest-bearing loans and borrowings.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
150
existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the in-
come statement.
The Group uses financial derivative instruments mainly to hedge its exposure to exchange rate risk, interest rate risk and
commodity price fluctuation risk.
With reference to the classification of hedging transactions, the provisions of IFRS 9 require that:
•
there is an economic relationship between the hedged item and the hedging instrument, such as to offset the related
changes in value;
•
this ability to offset is not undermined by the counterparty’s credit risk level;
•
a ratio between the hedged object and the hedging instrument (the so-called hedge ratio) is defined, in line with the
derivatives risk management objectives, as part of the established derivatives risk management strategy, rebalancing
where necessary.
Changes in the derivatives risk management objectives, the termination of the above conditions to classify hedging trans-
actions or rebalancing lead to the future, total or partial, discontinuation of the hedge.
Financial instruments are recognized according to hedge accounting rules when:
•
at the beginning of the hedging, the formal designation and documentation of the hedging exist;
•
the hedging is assumed to be effective;
•
the effectiveness can be accurately measured and the hedging itself is highly effective during the relevant periods.
The Group applies the cash flow hedge (IFRS 9), if the hedging relationship of changes in the cash flows originating from
an asset or liability or a future transaction (hedged underlying element), which is deemed as likely to occur and could
have an impact on other comprehensive income and equity (cash flow hedge reserve), is formally documented.
Changes in the value of the derivatives designated as fair value hedges and that are qualified as such, are recognised in
the income statement, consistent with the changes in the fair value of the hedged assets and liabilities. If the derivative,
even if created with non-speculative intent, does not meet all the formal requirements necessary to be designated in
hedge accounting, the changes in fair value are recognised in the income statement, under the same line of the changes
in the hedged item.
x.
Inventories
Inventories are recognised at the lesser value between purchase and production cost, according to the weighted average
cost method and their net realisable value.
Cost includes direct materials and direct labour general production costs and other costs incurred to bring inventories to
their current location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion
and the estimated costs necessary to make the sale.
Lastly, some obsolete stock provisions are calculated for materials, finished goods and spare parts that are considered
obsolete or slow moving, keeping into account their expected future use and realisable value.
xi.
Cash and cash equivalents
Cash and cash equivalents are recognised at their nominal value and include numeric values, i.e. those values that meet
the requirement of on demand or very short-term availability, positive outcome and no costs of disposal with a maturity
of three months or less, that are readily convertible to a known amount of cash and subject to an insignificant risk of
changes in value. This item also includes the collection and payment instruments that have been subject to an account
recording at the servicing financial institution as at the closing date of the period notwithstanding any subsequent differ-
ent accounting records.
151
xii.
Treasury shares
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain
or loss is recognised in the Income statement on the purchase, sale, issue or cancellation of the Group’s own equity
instruments. Any gain or loss resulting from subsequent sales is recognised in equity.
xiii.
Provisions for risks and charges
General
The Group recognises provisions for risks and charges when it has a present obligation, either legal or constructive, to-
ward third parties arising from a past event, and it is likely that it will be necessary to use the resources of the Group to
meet the obligation, and when it is possible to make an accurate estimate of the amount of the obligation itself.
When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the
reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense
relating to a provision is presented in the income statement net of any reimbursement. If the effect of the time value of
money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific
to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a
finance cost.
Changes in estimates are reflected in the income statement of the period when the change has occurred.
Disclosures about provisions follow IAS 37 (paragraph 92) which regulates and limits these indications when they might
prejudice the company’s position in any disputes.
IFRIC23 ‘Uncertainty over Income Tax Treatments’ to clarify the accounting for uncertainties in income tax is applied.
The interpretation is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused
tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12.
In the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, an entity
has to consider whether it is probable that the relevant authority will accept each tax treatment, or group of tax treat-
ments, that it has used or plans to use in its income tax filling.
If the entity concludes that it is probable that a particular tax treatment is accepted, the entity has to determine taxable
profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates consistently with the tax treatment included
in its income tax filings.
If the entity concludes that it is not probable that a particular tax treatment is accepted, the entity has to use the most
likely amount or the expected value of the tax treatment when determining taxable profit (tax loss), tax bases, unused
tax losses, unused tax credits and tax rates. The decision should be based on which method provides better predictions
of the resolution of the uncertainty.
In case facts and circumstances changes, the entity shall reassess its judgements and estimates.
Warranty provisions
The Group provides warranties for general repairs of defects that existed at the time of sale, as required by law. Provisions
related to these assurance-type warranties are recognised when the product is sold, or the service is provided to the
customer. Initial recognition is based on historical experience. The estimate of warranty-related costs is revised annually.
Restructuring provisions
Restructuring provisions are recognised only when the Group has a constructive obligation, which is when: (i) there is a
detailed formal plan that identifies the business or part of the business concerned, the location and number of employees
affected, the detailed estimate of the associated costs, and the timeline; and (ii) the employees affected have been noti-
fied of the plan’s main features.
152
xiv.
Employment benefits
Group companies provide post-employment benefits to staff, both directly and by contributing to external funds.
The procedures for providing these benefits vary depending on the legal, fiscal and economic conditions in each country
in which the Group operates.
Employee benefits are accounted under IAS 19 and IFRS 2.
Group companies provide post-employment benefits through defined contribution and/or defined benefit plans.
The Group’s obligations and the annual cost reported in the income statement are determined by independent actuaries
using the projected unit credit method.
The net cumulative value of actuarial gains and losses is recorded directly in the statement of other comprehensive in-
come and is not subsequently recognised in the income statement. The costs associated with an increase in the present
value of the obligation, as the time for payment of the benefits draws nearer, are included under financial expenses.
Service costs are posted to the income statement.
The liability recognised represents the present value of the defined benefit obligation, less the present value of plan
assets. If an amendment to the plan changes the benefits accruing from past service, the costs arising from past service
are recognised in the income statement at the time the change to the plan is made. The same treatment is applied if
there is a change to the plan that reduces the number of employees or that amends the terms and conditions of the plan
(the treatment is the same, regardless of whether the final result is a profit or a loss).
For defined benefit plans, remeasurements, comprising actuarial gains and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined benefit/contribution liability and the return on plan assets (excluding
amounts included in net interest on the net defined benefit/contribution liability), are recognised immediately in the
statement of financial position with a corresponding debit or credit to retained earnings through OCI in the period in
which they occur. Remeasurements are not reclassified to the income statement in subsequent periods.
Past service costs are recognised in the income statement on the earlier of:
•
The date of the plan amendment or curtailment, and
•
The date that the Group recognises related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit/contribution liability or asset. The Group
recognises the following changes in the net defined benefit/contribution obligation under ‘cost of sales’, ‘administration
expenses’ and ‘selling and distribution expenses’ in the consolidated income statement (by nature):
•
Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine
settlements
•
Net interest expense or income
Since the Group fulfils its obligations by paying contributions to a separate entity (a fund), with no further obligations,
the company records its contributions to the fund in respect of employees’ service, without making any actuarial calcu-
lation.
Where these contributions have already been paid at the reporting date, no liabilities are recorded in the financial state-
ments.
Employees (including senior executives) of the Group receive remuneration in the form of share-based payments,
whereby employees render services as consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an ap-
propriate valuation model.
153
That cost is recognised in employee benefits expense, together with a corresponding increase in equity (other capital
reserves), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting
period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instru-
ments that will ultimately vest. The expense or credit in the income statement for a period represents the movement in
cumulative expense recognised at the beginning and end of that period. Service and non-market performance conditions
are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions
being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest.
Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award,
but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are
reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service
and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service condi-
tions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested
irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or ser-
vice conditions are satisfied. When the terms of an equity-settled award are modified, the minimum expense recognised
is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An addi-
tional expense, measured as at the date of modification, is recognised for any modification that increases the total fair
value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled
by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately
through profit or loss. The dilutive effect of outstanding options is reflected as additional share dilution in the computa-
tion of diluted earnings per share.
xv.
Grants
Government grants, obtained against investments, are recognised in the income statement when the conditions for
recognition are met (i.e. when there is reasonable certainty of recognition) as deferred income, over the period required
to relate them to their respective costs.
When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related
asset.
When the Group receives grants of non-monetary assets, the asset and the grant are recorded at nominal amounts and
released to the income statement over the expected useful life of the asset, based on the pattern of consumption of the
benefits of the underlying asset by equal annual instalments.
xvi.
Revenue and income
Revenue is recognised when control of the goods and services has been transferred and the Group’s performance obli-
gations to its customers have been satisfied. Revenue is measured as the amount of consideration the Group expects to
receive in exchange for transferring goods or providing services. The timing of when the Group transfers the goods or
services to the customer may differ from the timing of the customer’s payment. Revenues are stated net of discounts,
allowances, settlement discounts and rebates.
The Ariston Group typically provides warranties for general repairs of defects that existed at the time of sale, as required
by law. Contractual warranties required by law do not represent a separate performance obligation and the cost of such
warranties is recognised at the time of the transfer of control of the related good.
The Group also provides extended warranty. These service-type warranties are sold either separately or bundled together
with the sale of products and represent a separate performance obligation, in accordance with accounting principle IFRS
15. The revenue from extended warranties is generally recognised over the time, on the basis of the period in which the
service is provided.
Ariston Group revenue streams are described in the following table.
154
Revenue stream
Revenue stream description
% Revenues
2023
% Revenues
2022
Professional
Customers are mainly installers, medium-large distribu-
tors and professionals in the field of Thermal Comfort.
Standard T&Cs apply and the main performance obliga-
tion is characterised by the sale of finished products in-
cluding variable considerations too.
The Group acts as principal.
79%
73%
DIY (Do it yourself)
Customers are large retailers. The main performance obli-
gation is characterised by the sale of finished products
and the variable considerations are significant.
T&Cs are decided by the customer by means
of annual framework agreements.
The Group acts as principal.
5%
7%
Business-to-business
(B2B)
The main performance obligation is characterised by the
sale of components, burners and heating only for specific
projects: e.g., for institutions (schools, hospitals, etc.).
The Group acts as principal.
6%
8%
Service
Indirect service
: maintenance and repair services offered
through Technical Support to the end customer.
Direct service
: maintenance and repair services offered di-
rectly to the end customer.
Spare Parts
: Related to Service activities (in PL reported as
Net Revenue from Sales).
The Group acts as principal.
10%
12%
Total
100%
100%
Assets and liabilities arising from rights of return
Right of return assets
A right-of-return asset is recognised for the right to recover the goods expected to be returned by customers. The asset
is measured at the former carrying amount of the inventory, less any expected costs to recover the goods and any po-
tential decreases in value. The Group updates the measurement of the asset for any revisions to the expected level of
returns and any additional decreases in the value of the returned products.
Refund liabilities
A refund liability is recognised for the obligation to refund some or all of the consideration received (or receivable) from
a customer. The Group’s refund liabilities arise from customers’ right of return. The liability is measured at the amount
the Group ultimately expects it will have to return to the customer. The Group updates its estimates of refund liabilities
(and the corresponding change in the transaction price) at the end of each reporting period.
Regarding the use of significant assumptions refer to sub-paragraph ‘
Revenue recognition’
included in the paragraph
‘
Significant assumptions’.
xvii.
Taxes
Current income tax
Current taxes are based on the taxable income for the year. The taxable income is different from the profit/loss recog-
nised in the income statement since it excludes positive and negative items which are taxable or deductible in other years
and it also excludes items that will never be taxable or deductible.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxa-
tion authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted at the reporting date in the countries where the Group operates and generates taxable income.
155
Current income tax relating to items recognised directly in equity is recognised in equity and not in the income statement.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
Deferred taxes are those that the Group expects to settle or recover based on the temporary differences between the
carrying value of assets and liabilities and their corresponding tax values used for calculating taxable income. They are
recognised using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable tem-
porary differences, whereas deferred tax assets are recognised only if it is probable that there will be future taxable
income against which deductible temporary differences can be used. Deferred tax liabilities are recognised for all taxable
temporary differences, except:
•
if the temporary differences derive from goodwill or the initial recognition (not in business combinations) of
other assets or liabilities in transactions that do not affect the profit (loss) for the year or the taxable income;
•
in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests
in joint arrangements, when the timing of the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable future.
The carrying value of deferred tax assets is reviewed at each reporting date and impaired, if it is no longer probable that
sufficient taxable income exists that can enable recovery of all or part of the assets.
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in
joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary differ-
ences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences
can be utilised.
Deferred taxes are calculated at the tax rate that is expected to be applied when the asset is realised or the liability
extinguished. Deferred taxes are recognised directly in the income statement, except for those related to items recog-
nised directly under equity, in which case the deferred taxes are also recognised under equity.
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off
current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either
to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in
each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recov-
ered.
xviii.
Earnings per share
The basic earnings per share are calculated by dividing the portion of profit/loss attributable to the Group by the weighted
average of the outstanding shares of the year.
The diluted earnings per share are calculated by taking into account, both as regards the portion of profit/loss attributable
to the Group and the above-mentioned weighted average, the impact deriving from the total subscription/conversion of
all potential shares that may be issued through the exercise of outstanding options.
xix.
Dividends
Dividends are recognised as changes in equity in the year when the Group’s unconditional right to receive payment arises,
that is when the general meeting approves the distribution of dividends.
xx.
Transactions in a foreign currency
Should a company in the Group have a monetary item to be received or to be paid in regard to another foreign subsidiary,
for which settlement is not planned nor is it likely that it may occur in the foreseeable future and is substantially part of
the entity’s net investment in this foreign operation, it is recognised in accordance with the provisions of IAS 21 (para-
graphs 32 and 33). This envisages the treatment of the related differences in exchange rates be recognised under the
items of the statement of comprehensive income in the consolidated financial statements which include this foreign
operation.
156
xxi.
Significant accounting judgements, estimates and assumptions
The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjust-
ment to the carrying amount of assets or liabilities affected in future periods.
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised. The Group has several lease contracts that include extension and
termination options. The Group applies judgement in evaluating whether it is reasonably certain whether or not to exer-
cise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive
for it to exercise either the renewal or termination. After the commencement date, the Group reassesses the lease term
if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not
to exercise the option to renew or to terminate. The Group included the renewal period as part of the lease term for
leases of plant and machinery with a shorter non-cancellable period. Furthermore, the periods covered by termination
options are included as part of the lease term only when they are reasonably certain not to be exercised.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, which
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are described below. The Group based its assumptions and estimates on parameters available when the
consolidated financial statements were prepared. Existing circumstances and assumptions about future developments,
however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such
changes are reflected in the assumptions when they occur.
When the carrying amount of property, plant and equipment, intangible assets, right-of-use assets, goodwill and invest-
ments in associates/joint ventures exceeds its recoverable amount, which is the higher of the fair value less costs of
disposal and the value in use, the assets are impaired. Such impairments are carried out in accordance with the provisions
of IAS 36, as described in greater detail in note 2.1. In order to determine the recoverable amount, the Group generally
adopts the value in use criterion. Value in use is based on the estimated future cash flows generated by the asset, dis-
counted to their present value using a pre-tax discount rate that reflects the current market assessment of the time value
of money and of the specific risks of the asset. Future cash flows used to determine value in use are based on the most
recent business plan, approved by the management, containing forecasts for volumes, revenue, operating costs.
Regarding climate-related matters, the expected future cash flows incorporated certain climate-related risks to pursue
the Group’s global sustainability strategy. For further details about climate change, please refer to the following note
‘Climate Change’. These projections cover the next three years. For subsequent years, the assumption is perpetual in-
come. Nevertheless, possible changes in the underlying assumptions on which the calculation of such amounts is based
could generate different recoverable amounts. The analysis of each group of non-financial assets is unique and requires
management to use estimates and assumptions considered prudent and reasonable in the specific circumstances.
The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are
based on days past due for groupings of various customer segments that have similar loss patterns (i.e. by geography,
and coverage by letters of credit and other forms of credit insurance). The provision matrix is initially based on the Group’s
historical observed default rates. The Group will calibrate the matrix to adjust the historical credit loss experience with
forward-looking information. For instance, if forecast economic conditions are expected to deteriorate over the next year
which can lead to an increased number of defaults in the manufacturing sector, the historical default rates are adjusted.
157
The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a
significant estimate. The amount of ECLs is sensitive to changes in circumstances and in forecast economic conditions.
The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of a
customer’s actual default in the future. The information about the ECLs on the Group’s trade receivables and contract
assets is disclosed in ‘Credit Risk’ included in section ‘6.4 -
Other information’.
Income taxes include all taxes based upon the taxable profits of the Group. Taxes on income are recognised in the income
statement except to the extent they relate to items recognized directly in equity or in other comprehensive income, in
which case the related tax effects are recognised directly in equity or in other comprehensive income. Deferred taxes are
calculated on temporary differences between the tax base of an asset or liability and the carrying amounts in the Consol-
idated Financial Statements, Deferred tax assets relating to the carry-forward of unused tax losses are recognised to the
extent it is probable future profits will be available against which they can be utilised. Current and deferred income tax
assets and liabilities are offset when the income taxes are levied by the same taxation authority and where there is a
legally enforceable right of offset. Deferred tax assets and liabilities are measured at the enacted or substantively enacted
tax rates of the relevant tax jurisdictions that are expected to apply to taxable income during the period or periods in
which the temporary differences reverse. Other taxes not based on taxable profits, such as property taxes and taxes on
assets and liabilities’.
The cost of the defined benefit pension plan and other post-employment medical benefits and the present value of the
pension obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions
that may differ from actual developments in the future. These include the determination of the discount rate, future
salary increases, mortality rates and future pension increases. Due to the complexities involved in the valuation and its
long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are
reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appro-
priate discount rate, management considers the interest rates of corporate bonds in currencies consistent with the cur-
rencies of the post-employment benefit obligation with at least an ‘AA’ rating or above, as set by an internationally
acknowledged rating agency, and extrapolated as needed along the yield curve to correspond with the expected term of
the defined benefit obligation. The underlying bonds are further reviewed for quality. Those with excessive credit spreads
are excluded from the analysis of bonds on which the discount rate is based, on the basis that they do not represent high
quality corporate bonds. The mortality rate is based on publicly available mortality tables for the specific countries. Those
mortality tables tend to change only at intervals in response to demographic changes. Future salary increases and pension
increases are based on expected future inflation rates for the respective countries. Further disclosure is in ‘Note 3.4 –
Post-employment benefits’.
When the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be
measured based on listed prices in active markets, their fair value is measured using valuation techniques including the
discounted cash flow (DCF) model. The inputs to these models are taken from observable markets where possible, but
where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations
of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the
reported fair value of financial instruments. Contingent consideration, resulting from business combinations, is valued at
fair value at the acquisition date as part of the business combination. When the contingent consideration meets the
definition of a financial liability, it is subsequently remeasured to fair value at each reporting date. The determination of
the fair value is based on discounted cash flows. The key assumptions take into consideration the probability of meeting
each performance target and the discount factor. Further disclosure is in ‘Financial Instruments’ included in section ‘6.4
-
Other information’.
158
The Group capitalises costs for product development projects. Initial capitalisation of costs is based on management’s
judgement that technological and economic feasibility is confirmed, usually when a product development project has
reached a defined milestone according to an established project management model. In determining the amounts to be
capitalised, management makes assumptions regarding the expected future cash generation of the project, discount
rates to be applied and the expected period of benefits. Further disclosure is in ‘Note 2.1 – Intangible assets’.
The Group estimates variable considerations to be included in the transaction price for the sale of goods with rights of
return and volume rebates.
The Group has developed a statistical model for forecasting sales returns. The model uses the historical return data of
each product to come up with expected return percentages. These percentages are applied to determine the expected
value of the variable consideration. Any significant changes in experience as compared to the historical return pattern
will impact the expected return percentages estimated by the Group.
The Group’s expected volume rebates are analysed on a per customer basis for contracts that are subject to a single
volume threshold. Determining whether a customer will be likely entitled to a rebate will depend on the customer’s
historical rebates entitlement and accumulated purchases to date.
The Group applied the statistical model for estimating expected volume rebates for contracts. The model uses the his-
torical purchasing patterns and rebates entitlement of customers to determine the expected rebate percentages and the
expected value of the variable consideration. Any significant changes in experience as compared to historical purchasing
patterns and rebate entitlements of customers will impact the expected rebate percentages estimated by the Group.
Further disclosure is in ‘Note 3.13 – Other current liabilities’.
The Incremental Borrowing Rate (IBR) is defined as the interest rate the lessee would incur to borrow under a secured
loan with terms similar to those of the lease, with a similar security and in a similar economic environment. This interest
rate is identified through the Bloomberg database by applying the following relevant criteria to enhance the comparabil-
ity:
•
The credit rating;
•
The term of the loan;
•
The currency of denomination;
•
The geographies (depending on the cases, countries or regions);
•
The industry of the borrowing entity.
In order to obtain statistically significant samples of comparable transactions, a flexibility in the above criteria shall be
preserved and specific adjustments can be made to account for particular comparability factors. When the base rate is
negative, a zero floor to the base rate is applied.
For more information on leases, please see note 2.2 and 3.5.
The Group triggers provisions once pending or threatened disputes or legal proceedings are considered as a probable
event, for which there could be an outflow of funds with the amount reasonably estimated. If an outflow of funds be-
comes possible but the amount cannot be estimated, the matter is disclosed in the notes to the Consolidated Financial
Statements. The Group could be subject of legal and tax proceedings from various jurisdictions and for complex issues
therefore eventually monitoring the status of pending legal proceedings consulting with experts on a regular basis. Due
to the uncertainty inherent in such matters, it is difficult to predict the outflow of funds that could result from such
disputes with any certainty.
159
Global climate change is resulting, and is expected to continue to result, in natural disasters and extreme weather, such
as drought, wildfires, storms, sea-level rise, flooding, heat waves and cold waves, occurring more frequently or with
greater intensity. Such extreme events are driving changes in market dynamics, stakeholder expectations, local, national
and international climate change policies and regulations.
In the climate change context, the Ariston Group is moving towards anticipating structural changes driven by regulations
and the market. Our goal is to continue designing and offering highly energy efficient solutions, which increasingly rely
on renewable sources of energy, while improving the efficiency of the installed park. The Group can act as a principal in
the context of decarbonisation as an enabler of climate change mitigation.
To achieve this across all our product lines, we are channelling investments in R&D, production capacity and the necessary
skills and resources needed to contribute to the transition, which will lead to a significant avoidance of CO2 emissions.
The Group effort in boosting highly efficient products and solutions that rely on renewable technology will also contribute
to the reduction of Scope 3 emissions, whose greatest impact is generated by the use of sold products.
In applying the Accounting Standards, the Group summarised the impacts arising from climate change topic by topic,
providing the approach used by the Group.
Account
Approach
Estimates and judgments
concerning cli-
mate change
•
The Management adopted a critical approach in using the estimates
and judgments with regard to climate change
•
The Management adopted a critical approach in using the estimates
and judgments based on the multi-peril preliminary analysis of nat-
ural hazards and exposures performed by insurance companies
•
The Management focused on estimating expected cash flows from
specific assets/CGUs
Sustainable investment
Ariston Group is directing significant investments towards heat
pumps, working hard to open new markets and supporting their mass
roll-out, also considering the higher purchase price with respect to
other solutions and the different features in existing buildings. With
regards to electric heat pumps, which rely on an electrically-driven va-
pour compression cycle, transporting heat through refrigerant gases
from the source to the sink, the Group is looking to replace currently
used refrigerant gases with natural ones that have a much lower
Global Warming Potential (GWP). These include propane, a group of
liquefied petroleum gases, the suitability of which is still being re-
searched with products likely being released in upcoming years.
Further, the Wolf-Brink business combination contributed to the in-
crease of Ariston Group’s ESG focus, reinforcing its portfolio of brands
and its mid- to high-end offer of climate solutions.
6.5
Changes in accounting standards
The accounting policies adopted in the preparation of the Consolidated Financial Statements as of 31 December 2023 are
consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year
ended 31 December 2022, except for the adoption of new standards effective as of 1 January 2023. The Group has not
early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
Several amendments apply for the first time in 2023, but do not have an impact on the Consolidated Financial Statements
of the Group.
i.
Summary of the new accounting standards adopted by the Group from 1 January 2023
As from 1 January 2023 the following amendments of accounting standards have become applicable to the Group:
•
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
The IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as
current or non-current by clarifying:
-
What is meant by a right to defer settlement
-
That a right to defer must exist at the end of the reporting period
-
That classification is unaffected by the likelihood that an entity will exercise its deferral right
-
That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a
liability not impact its classification.
These amendments were applied for the first time in 2023 with the disclosures of these consolidated financial state-
ments, which were adapted accordingly.
•
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
In February 2021 the IASB issued amendments to IAS 1
Presentation of Financial Statements
and IFRS
Practice State-
ment 2: Disclosure of Accounting policies
which require companies to disclose their material accounting policy infor-
mation rather than their material accounting policies and provide guidance on how to apply the concept of materiality
to accounting policy disclosures.
Ariston has updated the Consolidated Financial Statements in compliance with these amendments.
•
Definition of Accounting Estimates - Amendments to IAS 8
In February 2021 the IASB issued amendments to IAS 8
Accounting Policies, Changes in Accounting Estimates and
Errors: Definition of Accounting Estimates
which clarify how companies should distinguish changes in accounting pol-
icies from changes in accounting estimates.
These amendments had no impact on the Consolidated Financial Statements of the Group because there were no
changes in accounting policies and accounting estimates.
•
IFRS 17 - Insurance Contracts
In May 2017 the IASB issued IFRS 17
Insurance Contracts
, which establishes principles for the recognition, measure-
ment, presentation and disclosure of insurance contracts issued as well as guidance relating to reinsurance contracts
held and investment contracts with discretionary participation features issued. In June 2020 the IASB issued amend-
ments to IFRS 17 aimed at helping companies implement IFRS 17 and make it easier for companies to explain their
financial performance.
The new standard and amendments had no impact on the Consolidated Financial Statements of the Group given that
Ariston did not issue any insurance contracts.
•
Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12
In May 2021, the Board issued amendments to IAS 12, which narrow the scope of the initial recognition exception
under IAS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary
differences.
The amendments should be applied to transactions that occur on or after the beginning of the earliest comparative
period presented. In addition, at the beginning of the earliest comparative period presented, a deferred tax asset
161
(provided that sufficient taxable profit is available) and a deferred tax liability should also be recognised for all deduct-
ible and taxable temporary differences associated with leases and decommissioning obligations.
These amendments had no impact on the Consolidated Financial Statements of the Group because the accounting in
place was already in line with amendments required.
•
International Tax Reform - Pillar two model rules - Amendments to IAS 12
On 23 May 2023 the IASB issued the International Tax Reform—Pillar Two Model Rules – Amendments to IAS 12 to
provide relief to entities impacted by the Base Erosion and Profit Sharing (“BEPS”) Pillar Two model rules. The amend-
ments aim to avoid inconsistent interpretations of IAS 12 Income Taxes and to improve the information provided to
users of financial statements before and after Pillar Two legislation comes into effect. The amendments introduce a
mandatory temporary exception to the accounting for deferred taxes arising from the jurisdictional implementation
of the Pillar Two model rules. The amendments also include disclosure requirements to help users of the financial
statements to better understand an entity’s exposure to Pillar Two income taxes arising from that legislation, partic-
ularly before its effective date. The mandatory temporary exception was effective immediately upon issuance of the
amendment, while the disclosure requirements apply for annual reporting periods beginning on or after 1 January
2023, but not for any interim periods ending on or before 31 December
2023. On 8 November
2023, the EU Regula-
tions 2023/2468 has adopted the IAS 12 Pillar Two changes.
For further information please refer to ‘Note 1.12 – Taxes’.
ii.
Accounting standards, amendments and interpretations issued but not yet effective
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of
the Group’s Consolidated Financial Statements are disclosed below. The Group intends to adopt these new and amended
standards and interpretations, if applicable, when they become effective.
•
Lease Liability in a Sale and Leaseback – Amendments to IFRS 16
In September 2022, the International Accounting Standards Board (IASB)
issued 'Lease Liability in a Sale and Lease-
back (Amendments to IFRS 16)' with amendments that clarify how a seller-lessee subsequently measures sale and
leaseback transactions that satisfy the requirements in IFRS 15 to be accounted for as a sale.
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) requires a seller-lessee to subsequently measure
lease liabilities arising from a leaseback in a way that does not recognise any amount of the gain or loss that relates
to the right of use it retains. The new requirements do not prevent a seller-lessee from recognising in the income
statement any gain or loss relating to the partial or full termination of a lease.
The new amendments are effective on or after 1 January 2024. The amendments are not expected to have a material
impact on the Group.
•
Classification of debt with covenants – Amendments to IAS 1
In October 2022, the International Accounting Standards Board (IASB) issued amendments to ‘IAS 1 — Presentation
of Financial Statements: Non-current Liabilities with Covenants’, that clarify how conditions which an entity must
comply with within twelve months after the reporting period affect the classification of a liability.
The new amendments are effective on or after 1 January 2024. The amendments are not expected to have a material
impact on the Group.
•
Supplier finance arrangements – Amendments to IAS 7 and IFRS 7
On 25 May 2023, the IASB issued Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) to add disclosure
requirements, and ‘signposts’ within existing disclosure requirements, that ask entities to provide qualitative and
quantitative information about supplier finance arrangements. The amendments are intended to enable users of fi-
nancial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the
entity’s exposure to liquidity risk.
The amendments require an entity to disclose the following for its supplier finance arrangements:
-
the terms and conditions of the arrangements
162
-
the carrying amounts and associated line items of financial liabilities in the statement of financial position that
are part of a supplier finance arrangement, with a breakdown of the amounts for which the suppliers have already
received payment from the finance providers
-
ranges of payment due dates; and
-
liquidity risk information.
The Group is evaluating the potential impact from the adoption of these amendments.
•
Lack of Exchangeability – Amendments to IAS 21
On 15 August 2023, the IASB issued Lack of Exchangeability (Amendments to IAS 21). The amendments clarify how an
entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when
there is no exchangeability, as well as require the disclosure of information that enables users of financial statements
to understand the impact of a currency not being exchangeable.
The new amendments are effective on 1 January 2025. The Group is evaluating the potential impact from the adoption
of these amendments.
6.6
Disclosure to the Financial Statements
This section details the results and performance for the period ended 31 December 2023.
During the year ending 31 December 2023 certain reclassifications on the consolidated accounts were recorded for a
better representation of the business transactions within the nature accounts lines and therefore the comparative Finan-
cial
Statements. These reclassifications impacted the “Services” and “Provisions” accounts.
6.6.1
Income statement
During 2023, the Group recorded revenue of € 3,091.8 million, compared to € 2,378.8 million in the previous year, with
an increase of € 713.0 million (+30.0%).
The increase arises from the organic growth of the Group and from a perimeter variation related to the business combi-
nation with Wolf-Brink concluded in January 2023. The Revenue item can be broken down as follows:
Revenue and Income
31.12.2023
31.12.2022
(in € million)
Revenue from sales
2,903.2
2,223.7
Revenue from services
174.2
140.5
Other revenue
14.4
14.6
Net revenue
3,091.8
2,378.8
Other revenue and income
58.3
42.7
Total
3,150.1
2,421.5
“Other revenue and income” totalled € 58.3 million at 31 December 2023 and € 42.7 million at 31 December 2022.
“Other revenue and income” is represented by items that do not directly refer to the production activities of the Group
but are all the same connected to the core business.
They included income related to no longer due payables, the gains on the disposal of fixed assets, and other income.
At 31 December 2023, they totalled € 58.3 million, an increase of € 15.6 million compared to the same period of the
previous year, mainly due to an insurance reimbursement linked to the extraordinary flash floods which occurred on 15
September 2022 in Marche region in Italy and to a perimeter variation.
Revenue by business line
Thermal Comfort
. Serves the Group's three main business categories, Hot Water, Heating and Air Treatment, and repre-
sents the Group's largest division, recording revenue for 2023 of € 2,910.5 million, or 94.1% of total revenue, compared
to € 2,187.4 million in 2022, or 92.0%, up € 723.1 million or 33.1% (of which -2.0%
organic and foreign exchange impact).
On 2 January, the Ariston Group completed the acquisition of Wolf-Brink (previously called “CENTROTEC Climate Sys-
tems”) which is included in the Ariston Group’s perimeter starting from January 2023. The revenue increase related to
the perimeter variation as at 31 December 2023 is equal to € 808.2 million, entirely included in the Thermal Comfort
perimeter. Wolf-Brink is active mainly in Germany and the Netherlands with the Wolf, Brink and Nedair brands in the
heating, air handling and ventilation industries.
Components
. Recorded net revenue of € 88.4 million for 2023, or 2.9% of total net revenue, compared to € 95.5 million
in 2022, or 4.0%, down € 7.1 million or 7.4% (of which -6.6% organic and foreign exchange impact). The decrease in
revenue was driven by a slowdown both in the Professional business due to a general crisis on the Ho.Re.Ca market and
in Domestic business due to customers’ high stock levels.
164
Burners
. Recorded net revenue of € 92.9 million for 2023, or 3.0% of total net revenue, compared to € 95.9 million in
2022, or 4.0% of total revenue, with a € 3.0 million or 3.1% decrease (of which -3.0% organic and foreign exchange im-
pact). The lower turnover is essentially due to a strong market slowdown in France and China that leads to a decrease in
volumes partially offset by price increases and a more favourable mix.
At 31 December 2023 the net revenue by main country is detailed below:
Country
2023
2022
Netherlands (country of domicile)
132.5
56.6
Germany
811.7
110.2
Italy
310.6
374.6
France
230.0
219.9
Other countries
1,607.0
1,617.5
Total
3,091.8
2,378.8
Europe
. Represents the Group's largest market, recording net revenue of € 2,281.4 million for 2023, or 73.8% of total
revenue, compared to € 1,536.7 million, or 64.6%, in 2022, up € 744.7 million or 48.5% (of which -2.8% organic and
foreign exchange impact). The decrease was entirely driven by the strong heating market slowdown in Italy due to the
end of a government incentive scheme on renewable and high efficiency products. The growth on some important mar-
kets – such as Germany, Switzerland, and France – was not able to compensate the strong heating market slowdown in
Italy. On the water heating side with general stability in terms of volumes, the performance was driven by pricing that
offset an unfavourable mix effect.
Asia, Pacific & MEA
. Represents the second largest market for the Group, recording net revenue of € 535.9 million for
2023, or 17.3% of total revenue, compared to € 541.8 million, or 22.8%, in 2022, down € 5.9 million or -1.1% (of which
4.2% organic and foreign exchange impact). The decrease was driven by the negative effect of the local currencies (mainly
Chinese Renminbi, Australian Dollar, Israeli Shekel and South African Rand). The organic growth was driven by a booming
water heating renewable market in Australia fuelled by a government incentive scheme and an overall positive effect on
prices, partially offset by lower volumes essentially due to the decision to exit the Chinese domestic water heating market
starting from Q2 2023.
Americas
. Represents the Group's third largest market and reported revenue of € 274.5 million for 2023, or 8.9% of total
net revenue, compared to € 300.3 million, or 12.6%, in 2022, with a decrease of € 25.8 million, or -8.6% (of which -10.3%
organic and foreign exchange impact). The decrease was due to a strong reduction on the US and Canadian heating
market.
On the water heating business the high level of customers’ stock led to substantially stable volumes with a positive effect
from prices associated with an unfavourable mix.
Furthermore, the Group decided to stop its activities on the Argentinian market.
Note 1.2 – Raw materials, consumables and goods for resale
At 31 December 2023, the purchase cost of “Raw materials, consumables and goods for resale” amounted to € 1,475.8
million, up by € 232.5 million compared with the same period of the previous year.
As a percentage of net sales, the trend in purchases and the change in inventories shows a decrease from 48.4% in 2022,
to 46.5% in 2023, mainly driven by better raw material cost absorption and the Wolf-Brink business contribution.
165
Note 1.3 – Services
“Services” amounted to € 517.3 million versus € 464.0 million at December 2022, up by € 53.3 million, and can be detailed
as follows:
Services
31.12.2023
31.12.2022
(in € million)
Logistics and transport
149.7
158.1
Sub-contracted work and maintenance
103.0
77.3
Advertising and promotion
47.6
41.2
Consulting services
37.9
28.6
Utilities
36.6
29.6
Rental and lease expenses
35.7
19.8
Travel expenses
29.0
14.8
Bonuses and commissions
27.8
31.7
Insurance
13.7
10.0
Facilities management services
10.8
12.5
Directors and Statutory Auditors' Fees
7.7
7.6
Technical support
4.4
16.9
Other services
13.4
16.0
Total
517.3
464.0
The service fee increased in absolute terms due to the perimeter variation since the acquired Wolf-Brink added service
costs for € 80.8 million. In an organic view, the service fees decreased by € 27.6 million.
As a percentage of net sales, they stood at 16.7%, lower than the 19.5% recorded in 2022. The Group's continued expan-
sion in the various Climate Solutions sectors had an impact on the variable costs related to sales and production during
2023. The increases were primarily seen in "Subcontracted work and maintenance" (an increase of € 25.7 million), "Ad-
vertising and promotion" (an increase of € 6.4 million), and "Consulting services" (an increase of € 9.3 million) but offset
by a decrease in "Logistic and transport" for € 8.4 million.
A breakdown of personnel costs by nature is shown in the table below:
Personnel
31.12.2023
31.12.2022
(in € million)
Wages and salaries
535.3
362.5
Social security costs
116.3
77.2
Provision for Employees severance indemnity
9.1
7.2
Provision for retirement benefits and other funds
-0.9
-1.0
Other personnel costs
14.8
13.2
Total
674.6
459.0
In December 2023, costs related to “Personnel” amounted to € 674.6 million, up by € 215.6 million compared with the
same period of the previous year, due to the regular trend in salary inflation (fixed and variable components) in the
various countries where the Group operates, as well as the organisational changes and the acquisition of Wolf-Brink in
January 2023.
“Wages and salaries” totalled € 535.3 million at 31 December 2023 and € 362.5 million at 31 December 2022.
“Provision for Employees severance indemnity” and “Provision for retirement benefits and other funds” include the net
impact of accruals and releases for the period.
166
At 31 December 2023, the Group’s workforce increased from 7,975 at 31 December 2022 to 10,769.
The headcount by category of employee as follow:
Headcount
31.12.2023
31.12.2022
Average
Delta
(number of people)
Managers and white collars
5,837
4,059
4,948
1,778
Blue collars
4,932
3,916
4,424
1,016
Total
10,769
7,975
9,372
2,794
The Wolf-Brink acquisition added 2,792 employees to Ariston Group’s headcount.
At 31 December 2023, the number of employees was 10,769 (7,975 at 31 December 2022) of whom 1,976 (1,847 at 31
December 2022) were based in Italy, 8,159 (5,834 at 31 December 2022) were based all around the world and 634 (294
at 31 December 2022) were based in the Netherlands.
Note 1.5 – Additions and release of provisions
During 2023, “Additions and release of provisions” were recognised for € 67.8 million versus € 31.2 million in the same
period of 2022. In detail:
Additions and release of provisions
31.12.2023
31.12.2022
(in € millions)
Product warranty
50.3
28.3
Bad debt
3.7
-0.6
Installation
2.1
3.4
Legal disputes
2.1
-0.4
Restructuring
-1.6
0.6
Other
11.3
-0.1
Total
67.8
31.2
The increase is mainly due to the warranty provision, legal and other provisions while the other items are basically in line
with the same period of the previous year.
The increases are mainly related to the perimeter variation following the Wolf-Brink acquisition. The perimeter variation
led to higher provisions for warranties (€ 18.9 million), legal disputes (€ 1.9 million) and other risks (€ 7.5 million).
For further details about movements in the period, refer to ‘Note 2.9 – Trade Receivables’ for ‘Bad Debt provision’ and
‘Note 3.3 - Non-Current Provisions’.
“Other operating expenses” amounted to € 32.5 million, versus € 30.4 million of the same period in the previous year,
and can be detailed as follows:
Other operating expenses
31.12.2023
31.12.2022
(in € million)
Non-income tax and other levies
11.5
10.8
Concession rights and other
4.1
2.6
Losses on receivables
0.9
0.9
Losses on assets
0.3
0.9
Other operating expenses
15.7
15.2
Total
32.5
30.4
This item includes all ordinary operating expenses that cannot be recognised under other items.
167
Note 1.7 – Operating profit
In December 2023 “Operating profit”, amounted to € 285.7 million compared to € 193.7 million as of December 2022.
The significant increase is explained by the above detailed variances.
During 2023 Operating profit (EBIT) confirmed the favourable trend of the previous year, more specifically in the rising
mix and price effect. In addition, the contribution of Wolf-Brink and a better absorption of raw material and logistic costs,
led to an increase in the percentage of EBIT to net revenue of +1.1pts compared to 2022.
In 2023, “Financial income” amounted to € 11.6 million, a better result than the previous year when the same item
amounted to € 6.0 million. The item is as follows:
Financial income
31.12.2023
31.12.2022
(in € million)
Interest Income from bank
6.2
2.9
Employee benefits
3.7
0.6
State Green Programmes
1.1
2.2
Other financial income
0.6
0.3
Total
11.6
6.0
The year-on-year change was largely attributable to the item “Interest income from bank”, resulting from an increase in
interest rate conditions remunerating our liquidity. The other items making up the total were largely unchanged.
“Financial Expense” amounted to € 44.0 million at the end December 2023 versus € 15.7 million realised in 2022. This
line item can be detailed as follows:
Financial expense
31.12.2023
31.12.2022
(in € million)
Interest and other expenses due to bank
32.9
10.3
Employee benefits
7.0
1.4
Leases
2.9
1.9
Business Combinations
1.0
1.4
Other financial expense
0.3
0.7
Total
44.0
15.7
Compared to the previous year, “Financial Expense” increased by € 28.3 million, mainly due to “Interest and other ex-
penses due to bank” reflecting the impact of the debt raised to fund the Wolf-Brink acquisition along with the interest
rate hikes in 2023.
168
Note 1.10 – Exchange rate gains/losses
“Exchange rate gains/losses” showed a positive result of € 1.5 million, which can be broken down as follows:
Exchange rate gains/losses
31.12.2023
31.12.2022
(in € million)
Exchange rate gains
16.1
43.2
Exchange rate losses
-16.6
-52.1
Unrealised exchange rate gains
3.0
7.5
Unrealised exchange rate losses
-1.0
-7.5
Total
1.5
-8.9
“Exchange rate gains/losses” include the monetary changes on the accounting entries that were realised at the end of
the reporting period; “Unrealised exchange rate gains” and “Unrealised exchange rate losses” include the monetary
changes that are not yet realised because they refer to financial transactions that were not closed at the end of the
reporting period.
The result for the period relating to realised and unrealised exchange differences on financial transactions was mostly
positive due to the revaluations of the Swiss Franc against the Euro.
The item “Profit (loss) on investments” was negative for € 1.3 million, down by € 6.0 million compared with the previous
year, mainly due to the remeasuring of the value in an “Investment company in risk capital (SICAR) provision”, with the
recognition in the income statement of any valuation differences.
As at December 2022 the Put and Call option of HTP Comfort Solutions LLC was equal to € 4.9 million and was executed
in May 2022.
Tax expense (income) and the related profit before tax for the years ended as at 31 December 2023 and 2022 consisted
of the following:
Taxes
2023
2022
Delta
(in € million)
Profit before taxes
253.6
179.8
73.8
Current taxes
72.3
41.3
31.0
Deferred taxes
-9.9
-1.7
-8.2
Total taxes
62.4
39.5
22.9
In 2023 total taxes of € 62.4 million show a significant increase in comparison to the 2022 taxes of € 39.5 million, equal
to € 22.9 million, mainly deriving from the increase in the profit before taxes of €73.7 million. The reason for the profit
increase lies in the ACS acquisition that significantly contributed to Group profitability in 2023, leading to a corresponding
increase in taxes.
For the same reason, the 2023 current taxes show an increase of € 31.0 million compared to current taxes in 2022, partly
offset by an increase in deferred taxes for € 8.1 million.
Ariston Holding N.V. is incorporated in the Netherlands but is a tax resident of Italy. The reconciliation of the differences
between the theoretical income taxes at the parent local rate and total income taxes is presented based on the Italian
local corporation income tax rate in force in 2023 of 24%. A reconciliation of Ariston’s income tax expense for the year
ended as at 31 December 2023 is as follows:
169
Effective tax rate reconciliation
2023
%
(in € million)
Taxes at nominal Tax Rate
60.9
24.0%
Foreign income at different tax rate
0.7
0.3%
Deferred taxes not recognised and write-down
7.9
3.3%
Italian IRAP
5.9
2.3%
Recognition or use of previously unrecognised DTA
-5.9
-2.3%
Permanent differences
-1.3
-0.5%
Italian revaluation
-4.7
-1.8%
Prior year taxes
-1.2
-0.5%
Other
0.0
-0.2%
Effective Tax Charge
62.4
24.6%
For comparative purposes, here below is a reconciliation of Ariston’s income tax expense for the year ended as at 31
December 2022:
Effective tax rate reconciliation
2022
%
(in € million)
Taxes at nominal Tax Rate
43.2
24.0%
Foreign income taxed at different rates
-3.5
-1.9%
Deferred taxes not recognised and write-down
2.1
1.2%
Italian IRAP
5.5
3.1%
Recognition or use of previously unrecognised DTA
-1.6
-0.9%
Permanent differences
-1.7
-1.0%
Italian revaluation
-7.2
-4.0%
Prior year taxes
2.3
1.3%
Other
0.5
0.3%
Effective Tax Charge
39.5
22.0%
The 2.6% increase in the 2023 tax rate of 24.6% compared to the 2022 tax rate of 22.0% is mainly a structural increase
deriving from the different country mix in which the Group operates after the Wolf-Brink business acquisition. The Wolf-
Brink group is highly focussed on Germany, even if it has operations in other EU and non-EU countries and Germany has
a level of corporate income tax higher than the average Ariston tax rate. In the tax rate reconciliation, this is reflected in
the 2.2% worsening of Foreign income taxed at different rates line which shows the difference between the Italian nom-
inal tax rate (24%) and the foreign entities’ nominal tax rate.
The deferred taxes not recognised and write-down derive from the realisation of losses in countries where a deferred tax
asset has not been recognised and it includes the write-down of deferred taxes accrued in previous years mainly in the
United States. The negative impact has been partially offset by the recognition of previously unrecognised deferred taxes
on losses carried forward mainly in Germany.
The 2023 effective tax rate is positively impacted by the on-going net benefit connected to the revaluation of tangible
and intangible assets carried out for both Local GAAP and tax purposes in Italy in 2021. In addition to the initial positive
impact of the revaluation accrued in the 2021 financial statements and equal to the expected tax benefit for the first five-
year business plan, in the 2023 financial statement the expected benefit for the additional year of the new five-year
business plan period has been recognised positively thus impacting the tax rate.
Pillar two
The OECD Pillar Two initiative aims to ensure that multinational corporations pay a minimum effective tax rate of 15
percent on a jurisdictional basis. The implementation of the Global Minimum Tax, provided for in Directive No. 2022/2523
of 15 December 2022 (implementing the OECD/G20 Pillar II proposal), is effective in Italy as from 1 January 2024 and it
was implemented with Legislative Decree No. 209 of 27 December 2023. The Italian legislation related to Pillar Two will
apply to Ariston Holding NV being a Duch company which is fiscally resident in Italy. Many other countries have initiated
domestic legislative procedures to enact the related tax legislation as well.
Since the Pillar II regulation is not effective at the 31 December 2023 closing, no current taxes arising from its application
have been accounted for in these financial statements. Moreover, the Group has also applied the temporary exception,
170
introduced in May 2023, regarding the accounting requirements for deferred taxes under IAS 12; therefore, no infor-
mation on deferred tax assets and liabilities resulting from the application of Pillar II is herein provided.
Given the complexity of the rules outlined in the above legislation, for the first three tax periods (for the Ariston Group -
financial years 2024 to 2026) the possibility of applying a simplified regime has been provided for (so-called “transitional
safe harbours”). This simplified regime is primarily based on the application of three tests (De Minimis test, Simplified
Effective Tax Rate test and Routine Profits test) for each jurisdiction. Passing at least one of these tests allows the non-
application of Pillar Two’s more detailed rules and the reduction in compliance burdens.
Based on the analysis performed in relation to the 2022 safe harbour tests, the Ariston Group's exposure arising from the
application of Pillar Two is evaluated as not material. However, the Ariston Group’s assessment is in progress in relation
to 2023 and it includes the analysis of the application of the transitional safe harbours in the jurisdictions in which the
Group operates and the presence of a Pillar Two effective tax rate below 15 percent. The Company expects to complete
the assessment in the first half of 2024.
Note 1.13 – Basic and diluted earnings per share
Basic earnings per share are determined as the ratio of the Group’s portion of net profits for the year to the weighted
average number of ordinary shares outstanding during the year. The Group’s treasury shares are included in this calcula-
tion for 2023. Diluted earnings per share are determined taking the potential effect resulting from options allocated to
beneficiaries of dilutive stock option plans into account in the calculation of the number of outstanding shares.
Basic earnings per share at 31 December 2023 amounted to € 0.52 and are calculated by dividing the net profit for the
year attributable to the ordinary shareholders of the Parent Company, of € 191.2 million, by the number of total shares
– ordinary and multiple voting – outstanding during the period, that is
371,032,052.
Diluted earnings per share amounted to € 0.51 and are calculated by dividing the net profit for the year attributable to
the ordinary shareholders of the Parent Company, of € 191.2 million, by the number of total shares and potential shares
to be issued for the LTI plan which totalled 371,886,058.
Basic and diluted earnings per share are calculated as shown in the table below.
2023
2022
Net profit attributable to ordinary shareholders
€ million
191.2
140.3
Weighted average of ordinary and multiple voting shares outstanding
number
371,032,052
329,827,838
Basic earnings per share
€
0.52
0.43
Net profit attributable to ordinary shares outstanding net of dilution
€ million
191.2
140.3
Weighted average of ordinary and multiple voting shares outstanding
number
371,032,052
329,827,838
Potential shares to be issued for LTI plan
number
854,006
1,131,189
Weighted average of ordinary and multiple voting shares outstanding net of dilution
number
371,886,058
330,959,027
Diluted earnings per share
€
0.51
0.42
Atypical or unusual transactions
During the year 2023, Ariston Group did not undertake any atypical or unusual transactions.
6.6.2
Statement of financial position - Assets
At 31 December 2023, “Intangible assets” amounted to € 1,512.4 million, up by a net € 1,069.8 million compared to 31
December 2022, net of the amortisation expense for the period of € 45.0 million, in addition to other changes.
The amortisation expense for the period is recognised under the appropriate item in the income statement.
Changes during the period are shown in the table below:
|
Intangible assets
(in € million)
|
Goodwill
|
Other intangible
assets
|
Total
|
|
Cost net of accumulated impairment losses
|
312.7
|
254.0
|
566.7
|
|
Accumulated amortization
|
-124.0
|
-124.0
|
|
|
As at 31.12.2022
|
312.7
|
130.0
|
442.7
|
|
Perimeter variation
|
588.9
|
491.1
|
1,080.1
|
|
Increases
|
0.0
|
30.2
|
30.2
|
|
Decreases
|
0.0
|
-0.1
|
-0.1
|
|
Remeasurements and Impairment
|
0.0
|
-1.1
|
-1.1
|
|
Amortisation
|
0.0
|
-45.0
|
-45.0
|
|
Exchange rate effect
|
2.8
|
2.2
|
5.0
|
|
Other
|
-10.4
|
11.1
|
0.8
|
|
Total changes
|
581.4
|
488.4
|
1,069.8
|
|
Cost net of accumulated impairment losses
|
894.1
|
780.2
|
1,674.3
|
|
Accumulated amortization
|
-161.8
|
-161.8
|
|
|
As at 31.12.2023
|
894.1
|
618.3
|
1,512.4
|
The net total amount of goodwill was € 894.1 million, compared to € 312.7 million at 2022 year-end, and shows a change
largely due to:
-
Goodwill arising from the business combination with Wolf-Brink, amounting to € 587.6 million. Refer to ‘Note
2.1.1 – Business combinations’ for further details.
-
Goodwill arising from the business combination with MTG Service Single Member, amounting to € 1.3 million.
Refer to ‘Note 2.1.1 – Business combinations’ for further details.
-
The changes in exchange rates, positive for € 2.8 million.
The total amount of goodwill recognised in the statement of financial position is not amortised but is subject at least
annually to an impairment test (together with the other intangible and tangible assets) to assess its recoverability, as
envisaged by IAS 36.
Therefore, the goodwill has been allocated to the cash generating units (CGU) from which future economic benefits re-
lated to the acquisition are expected.
Consequently, at 31 December 2023, the impairment test was carried out as described hereinafter.
The item “Other intangible assets” can be detailed as follows:
Other intangible assets
31.12.2023
31.12.2022
(in € million)
Concessions, licences, trademarks
238.3
49.2
Development costs
48.4
17.5
Intangible assets in progress
31.1
23.7
Software
27.7
17.5
Other
272.7
22.1
Total
618.3
129.9
172
Details of and changes in “Other intangible assets” are the following:
Other intangible assets
Development
costs
Software
Concessions,
licenses, tra-
demarks
Other Intan-
gible
Assets
Total
(in € million)
Cost net of accumulated impairment losses
75.1
55.4
55.1
68.4
254.0
Accumulated amortization
-57.6
-37.8
-5.9
-22.7
-124.0
As at 31.12.2022
17.5
17.5
49.2
45.8
129.9
Perimeter variation
27.8
5.6
184.9
272.9
491.2
Increases
3.3
2.0
1.0
23.8
30.2
Decreases
0.0
0.0
0.0
-0.1
-0.1
Remeasurements and
impairment
0.0
0.0
-1.0
-0.1
-1.1
Amortisation
-11.4
-13.1
-1.3
-19.3
-45.1
Exchange rate effect
0.0
0.1
1.2
0.9
2.2
Other
11.2
15.6
4.3
-20.1
11.1
Total changes
30.9
10.2
189.1
258.1
488.3
Cost net of accumulated impairment losses
112.0
76.6
246.0
345.7
780.3
Accumulated amortization
-63.5
-48.9
-7.8
-41.8
-161.9
As at 31.12.2023
48.4
27.7
238.2
304.0
618.3
Other intangible assets have a definite useful life and are consequently amortised as necessary.
The change in ‘Other intangible assets’ from the start of the period amounted to € 258.1 million and was primarily due
to the perimeter variation related to the Wolf-Brink business combination, as a result of which the Group performed the
purchase price allocation where customer lists have been recognised for a net amount equal to € 249.0 million. Refer to
‘Note 2.1.1 – Business combinations’ for further details. Additional changes in ‘Other intangible assets’ are related to
investments for the period and the exchange rate effect not fully offset by € 19.3 million in amortisation for the period.
Development costs refer to products for which the return on investments occurs within a five-year period, on average.
The capitalised costs for the period, attributable only to product development projects, amounted to € 9.5 million (€ 7.5
million in 2022) out of a total of € 48.4 million (€ 17.5 million in 2022) reported in the financial statements. The amount
of ‘Development costs’ internally generated is equal to € 13.0 million, while the rest was acquired through business com-
binations (mainly Wolf-Brink for € 27.8 million).
‘Concessions, licences, trademarks’ increased for € 189.1 million and was primarily due to the perimeter variation related
to the Wolf-Brink business combination, as a result of which the Group performed the purchase price allocation where
trademarks have been recognised. Trademarks have an indefinite useful life and are subject to impairment testing. For
further details, please refer to the next sub-paragraph ‘Impairment Test’.
The Group evaluated the development costs related to products based on the criteria outlined in the Climate Delegated
Act only for objective mitigation of climate change.
As evidence of the commitment to promote a more efficient and
renewable product portfolio, these investments have been capitalised. The impairment of the carrying amount of the
development costs previously capitalized was charged to the income statement against the respective products' sales.
In order to determine the loss in value of capitalised development costs, in addition to the assessment of the economic
return from each development project, the Group arranged to allocate them to the Net capital employed of the related
CGUs and assesses their recoverability together with the related tangible assets, determining their value in use with the
discounted cash flow method.
In accordance with IAS 36 - Impairment of Assets, goodwill and intangible assets with indefinite useful lives (Trademarks)
are not amortised and are tested for impairment annually or more frequently if facts or circumstances indicate that the
asset may be impaired.
Goodwill and intangible assets with indefinite useful lives are allocated to CGUs within the unique operating segment.
The impairment test is performed by comparing the carrying and recoverable amount of each CGU to which goodwill has
been allocated. The recoverable amount of a CGU is the higher of its fair value less costs of disposal and its value-in-use.
173
The balance of goodwill and intangible assets with indefinite useful lives recognised by the Company primarily relates to
CGU Thermal Comfort (€ 1,114.4 million in 2023 and € 343.9 million in 2022), while other goodwill balances relate to
CGUs Burners (€ 12.5 million in 2023 with no variation compared to 2022) and Components (€ 5.5 million in 2023 with
no variation compared to 2022).
The balance of goodwill allocated to CGU Thermal Comfort
significantly increased compared to 31 December 2022 due
to the goodwill from the Purchase Price Allocation process related to the acquisition of Wolf-Brink which occurred in
2023.
In line with previous years, the Group considered the long-term business plan, which includes the latest available finan-
cials from the 3-year plan 2024 - 2026 which are approved by the Board, as the base for the impairment test.
The estimate of the recoverable amount for the purposes of performing the annual impairment test for each of the CGU
is determined using value-in-use and was based on the following assumptions:
•
the expected future cash flows covering the period from 1 January 2024 through 31 December 2026. These
expected cash flows reflect the current expectations regarding economic conditions and market trends as well
as the Company’s initiatives for the period covered by the projections. Regarding climate-related matters, the
expected cash flows incorporated certain climate-related risks to pursue the Group’s global sustainability strat-
egy. These cash flows relate to the respective CGUs in their current condition when preparing the financial state-
ments and exclude the estimated cash flows that might arise from restructuring plans or other structural
changes. Volumes and sales mix used to estimate the future cash flow are based on assumptions that are con-
sidered reasonable and sustainable and represent the best estimate of expected conditions regarding market
trends and the segment for the respective CGU over the period considered. The expected future cash flows
include a terminal period to estimate the future result beyond the time period explicitly considered which incor-
porated a long-term growth rate assumption of 1.77%. The growth rate is determined by weighting the GDP
growth rate at constant prices for the market in which the Group operates, to the revenues obtained in such
markets. This GDP growth rate has been obtained from an authoritative international source (IMF, October 2023
release);
•
the estimated future cash flows are discounted to their present value using a discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset or CGU that are not reflected
in the estimated future cash flows;
•
pre-tax cash flows are discounted using a pre-tax discount rate which reflects the current market assessment of
the time value of money for the period being considered, and the risks specific to those cash flows under con-
sideration. The pre-tax Weighted Average Cost of Capital (“WACC”) discount rate applied for each CGU is equal
to:
•
TCO for 10.64%;
•
BUR for 11.36%;
•
COM for 11.26%.
As part of the impairment test, additional stress tests are performed to assess the Group’s capacity to resist any
further market shock. The stress tests included:
•
a reduction of 5%, 10% and 15% in EBIDTA and Capex over the entire test period and for all markets and brands;
•
increase of WACC by +1% and decrease of growth rate by -1%.
Each stress test is performed on a stand-alone basis. Any reasonable possible change for the key assumptions re-
ported above would not cause any impairment loss.
Further, the headroom breakeven point is calculated through both the WACC percentage increase and the cash flow
percentage decrease (in order to make it nil); for the reporting period the results are, within the planned horizon:
•
WACC percentage increase on a weighted average of more than 31%;
•
Cash Flow percentage decrease: Thermal Comfort 34.0%, Burners 46.3%, Components 80.5%.
174
Below is a summary of the main assumptions used within the impairment test for each CGU:
2023
Thermal Comfort (TCO)
Burners (BUR)
Components (COM)
Net invested capital (€/000)
2,505.0
54.0
33.8
Goodwill (€/000)
876.1
12.5
5.5
Growth rate (%)
1.80%
1.18%
1.21%
WACC (%)
10.64%
11.36%
11.26%
2022
Thermal Comfort (TCO)
Burners (BUR)
Components (COM)
Net invested capital (€/000)
1,050.0
50.2
39.3
Goodwill (€/000)
294.7
12.5
5.5
Growth rate (%)
1.91%
1.06%
1.05%
WACC (%)
14.28%
14.33%
15.96%
The values estimated as described in the above paragraph are determined to be in excess of the carrying amount for each
CGU to which goodwill is allocated. As such, no impairment charges were recognised for goodwill and intangible assets
with indefinite useful lives for the year ended 31 December 2023.
Wolf-Brink Business combinations
As mentioned in paragraph ‘2 - Significant events of the year’, on 2 January 2023 (the “closing date”), the Ariston Group
completed the acquisition from CENTROTEC SE (the “Seller”) of 100% of the share capital of CENTROTEC Climate Systems
GmbH (hereinafter the “transaction” and “Wolf-Brink” or the “acquired group”).
The acquired group operates through four brands Wolf, Brink, Ned Air and Pro-Klima: Wolf is a pioneer in the develop-
ment of new-generation heat pumps with natural refrigerants characterised by high efficiency and low noise levels; Brink
is a prominent European player in domestic heat-recovery ventilation, while through Pro-Klima and Ned Air the acquired
group also operates in air-handling, offering high-efficiency systems for flow control and air conditioning in commercial
applications.
Wolf-Brink employs 2,792 people, with solid market positioning in Germany and the Netherlands, and a significant pres-
ence in other European markets. Manufacturing plants are located in Germany, the Netherlands and Croatia.
The transaction consideration amounted to € 1,024.5 million and was paid partially in cash and partially in kind through
41.4 million Ariston Holding N.V. shares.
The consideration paid in cash amounted to € 625.8 million: the agreed base cash consideration of € 703 million was
adjusted at closing to reflect the actual cash, debt and working capital at the closing date.
With reference to the consideration paid in kind, pursuant to the Board resolution of 15 September 2022 and following
the authorisation of the transaction by the general meeting of 19 December 2022, Ariston Holding N.V. executed at the
closing date a dedicated capital increase, with the issuance of 19,321,473 ordinary shares and 22,095,194 shares of the
new “non-listed ordinary share” class (which the Seller is entitled to convert into ordinary shares starting from 12 months
after issuance). Overall, the newly issued shares represent approximately 11.1% of total Ariston shares and 2.6% of voting
rights, with a total value of € 398.6 million, based on the price of Ariston shares as of 2 January 2023.
The transaction was accounted for in accordance with IFRS 3 by applying the acquisition method. The IFRS 3 acquisition
method of accounting applies the fair value concepts defined in
IFRS 13 - Fair Value Measurement
and requires, among
other things, the assets acquired and the liabilities assumed in a business combination to be recognised by the acquirer
at their fair values as of the acquisition date.
Based on the above, the Group performed the purchase price allocation with the support of an independent external
expert and it was finalised in a period not exceeding 12 months from the closing date, in compliance with the applicable
accounting standards.
175
The book value and the fair value of the identifiable assets and liabilities of the Wolf-Brink group as at the date of acqui-
sition were as follows:
(in € million)
Book value at the
acquisition date
Fair value at the
acquisition date
ASSETS
Non-current assets
Goodwill
135.6
-
Other intangible assets
41.3
491.1
Land and buildings
42.6
64.2
Plant and machinery
9.5
18.8
Other property, plant and equipment
43.8
53.6
Deferred tax assets
2.7
2.7
Financial assets
0.2
0.2
Other non-current assets
0.3
0.3
Total non-current assets
276.0
630.9
Current assets
Inventories
105.7
113.7
Trade receivables
50.8
50.8
Tax receivables
1.4
1.4
Current financial assets
1.0
1.0
Other current assets
12.0
12.0
Cash and cash equivalents
79.1
79.1
Total current assets
250.0
258.0
TOTAL ASSETS
526.0
888.9
LIABILITIES
Non-current liabilities
Deferred tax liabilities
9.4
158,0
Non-current provisions
3.4
3.4
Post-employment benefits
44.6
44.6
Non-current financing
101.2
101.2
Other non-current liabilities
0.03
0.0
Total non-current liabilities
158.6
307.2
Current liabilities
Trade payables
33.1
33.1
Tax payables
18.7
18.7
Current provisions
20.1
20.1
Current financial liabilities
2.1
2.1
Current loans
4.9
4.9
Other current liabilities
66.0
66.0
Total current liabilities
144.9
144.9
Total Liabilities
303.5
452.1
NET EQUITY ACQUIRED
222.5
A
436.8
Total consideration, of which:
B
1,024.5
Price paid in cash
625.8
Price paid in kind (Ariston ordinary shares)
398.6
Goodwill arising on acquisition (C=B-A)
C
587.6
The fair value of buildings, land and machinery and equipment has been determined using respectively the income ap-
proach for buildings, the market approach for land and the cost approach for machinery and equipment (in particular the
fair value has been determined by adjusting the asset’s new costs for losses in value attributable to physical, functional
176
and economic obsolescence – for this purpose, it both the indirect cost approach and the direct cost approach have been
used for more material assets utilising modern replacement costs).
The fair value of work-in-process and finished goods inventories has been determined at the estimated selling prices, less
the cost of disposal and an implied brand royalty charge. The book value of all other raw materials which are measured
at the lower of cost and net realisable value and which have a high turnover, are considered at approximate fair value.
Regarding the identified intangible assets, the fair value has been determined using the income approach (in particular
for trademark and technology the relief from royalty method has been used and for the customer list the multi-period
excess of earning method).
Based on the results of the purchase price allocation process, the residual goodwill amounts to € 587.6 million and rep-
resents the excess of the purchase price paid over of the fair value of the net assets acquired.
The above mentioned goodwill has been separately recognised by Ariston given it represents the future economic bene-
fits considered arising from the business combination, as well as synergies expected from the integration of the acquired
business, together with the assembled workforce in place. The emerging goodwill has been allocated to the Thermal
Comfort CGU and is not tax-deductible based on the relevant local regulations.
From the date of acquisition (i.e. from the beginning of 2023), the Wolf-Brink group contributed € 808.2 million in reve-
nue and € 87.7 million to profit before tax from continuing operations of the Group.
MTG Service business combinations
As mentioned in paragraph “3.iv. Basis of consolidation”, in June 2023 the Ariston Group acquired 100% of the shares of
the Greek entity ‘MTG Service Single Member’. The total consideration amounts to € 1.5 million and consisted of the
following:
•
the price paid for 100% of the capital of the company totalled € 1.1 million;
•
the acquisition agreement sets forth a mechanism for a subsequent adjustment of the purchase price (earn-out
and retentions). The amount is equal to € 0.4 million.
The Greek entity is a service provider for maintenance or repairs. The Group separately recognised goodwill arising from
the acquisition (€ 1.3 million) given that it represents the future economic benefits considered arising from the business
combination performed by the Group. Goodwill is not tax-deductible based on the relevant local regulations.
From the acquisition date, the Greek entity contributed to Ariston Group's results for € 0.7 million to net revenue.
177
At 31 December 2023, “Property, plant and equipment” amounted to € 619.4 million, up by a net € 214.4 million com-
pared to 31 December 2022.
The depreciation expense for the period is recognised under the appropriate item in the income statement and amounted
to € 86.4 million.
Details of and changes in “Property, plant and equipment” are as follows:
Property, plant and
equipment
Land and buildings
Plant and
machinery
Other property,
plant and
equipment
Total
(in € million)
Cost net of accumulated impairment losses
336.3
444.6
371.1
1,152.2
Accumulated depreciation
-163.0
-333.8
-250.1
-746.9
As at 31.12.2022
173.3
110.8
121.1
405.1
Perimeter variation
64.2
18.7
53.6
136.6
Increases
37.9
11.3
116.8
166.0
of which for right of use
21.4
0.0
16.2
37.6
Decreases
0.2
-0.1
0.2
0.3
Remeasurements and
Impairment
0.0
0.0
-0.1
-0.1
Depreciation
-26.1
-21.3
-39.0
-86.4
of which for right of use
-16.1
-0.3
-13.4
-29.8
Exchange rate effect
0.1
-0.9
-0.5
-1.3
Other
4.0
19.1
-23.9
-0.7
Total changes
80.3
26.9
107.1
214.4
Cost net of accumulated impairment losses
431.6
485.0
497.8
1,414.4
Accumulated depreciation
-177.9
-347.3
-269.7
-795.0
As at 31.12.2023
253.7
137.7
228.1
619.4
The net increase was largely attributable to the perimeter variation related to the Wolf-Brink business combination. The
capital expenditure for the period, totalling € 166.0 million, is only partly offset by € 86.4 million in depreciation.
In accordance with IFRS 16, below are the carrying amounts of right-of-use assets and the relevant changes during the
period:
Right of use assets
Land and buildings
Plant and
machinery
Other property,
plant and
equipment
Total
(in € million)
Cost net of accumulated impairment losses
85.0
2.4
42.2
129.7
Accumulated depreciation
-37.7
-0.9
-20.4
-58.9
As at 31.12.2022
47.3
1.5
21.8
70.7
Perimeter variation
4.0
0.0
5.0
9.0
Increases
21.4
0.0
16.2
37.6
Depreciation
-16.1
-0.3
-13.4
-29.8
Exchange rate effect
-0.4
0.0
0.4
-0.1
Other
-0.1
0.2
-0.4
-0.4
Total changes
8.9
0.0
7.7
16.4
Cost net of accumulated impairment losses
98.8
2.4
55.1
156.2
Accumulated depreciation
-42.6
-1.0
-25.5
-69.1
As at 31.12.2023
56.3
1.4
29.5
87.2
In order to recognise any impairment loss to tangible assets, in the presence of impairment indicators, the Group attrib-
utes these assets to the Net invested capital of the related CGUs and assesses their recoverability by determining their
value in use with the discounted cash flow method.
178
The item “Other property, plant and equipment” amounted to € 228.1 million, up by € 107.1 million compared with 31
December 2022.
The breakdown is detailed below:
Other property, plant and equipment
31.12.2023
31.12.2022
(in € million)
Assets under construction
106.6
44.5
Industrial and commercial equipment
70.1
46.8
Vehicles & transportation equipment
28.8
19.0
Furniture and office equipment
13.8
3.5
EDP machinery
3.3
3.3
Other
5.5
4.0
Total
228.1
121.1
Note 2.2.1 – Information of tangible and intangible assets by main country
At 31 December 2023 the information of tangible and intangible assets (excluding goodwill) by main country is detailed
below:
Country
31.12.2023
31.12.2022
Netherlands (country of domicile)
90.1
16.5
Germany
561.6
11.7
Italy
301.3
261.5
France
25.0
18.8
Other countries
259.6
226.5
Total
1,237.7
535.0
The total perimeter variation related to the Wolf-Brink business combination was equal to € 549.1 million for Germany,
while for the Country of domicile (Netherlands) it was equal to € 75.8 million.
In October 2023, the Ariston Group acquired the % of the UK company Thermal Earth Limited. The investment was around
€ 3.5 million. The company delivers a comprehensive range of services that encompass both product supply and installa-
tion for both domestic and non-domestic clients. The Group’s interest in Thermal Earth Limited is accounted for using
the equity method in the consolidated financial statements.
From June 2021 the Ariston Group holds 24.5% of the shares of the Dutch company Haas Heating B.V. which was acquired
by the Group through ATAG Heating B.V.
The company is treated as a joint venture, thus valuing the participation with the equity method with the existence of a
financial liability to be paid for acquiring the associate.
The acquisition agreement sets forth a mechanism for a subsequent adjustment of the purchase price (earn-out) based
on a sales scheme at specific dates falling under IAS 28
Investment in Associates and Joint Ventures
.
Therefore, a liability equal to the current value of the estimated obligation as at the date of its eventual future exercise,
was recognised in the financial statements against the equity method.
179
The Shares Purchase Agreement defined the purchase price at € 0.8 million and a liability for € 1.4 million is related to
the earn-out program.
For the remaining shares the agreement foresees a series of call options divided in three tranches expiring in 2024, 2025
and 2026.
The deferred taxes show a negative net balance of € 99.7 million in comparison with a positive net balance of deferred
taxes of € 39.4 million of 2022, with an overall variation of € 139.1 million. The main reason for the change derives from
the Wolf-Brink business acquisition, the purchase price allocation of which led to the recognition of intangible and tan-
gible assets for an amount of € 520.2 million with the related tax effect equal to € 154.7 million of deferred tax liability.
The reversal of the deferred tax liability related to the purchase price allocation in 2023 is € 6.2 million and the deferred
tax liabilities related to the purchase price allocation is equal to € 148.5 million as at 31 December 2023.
The components of net deferred tax assets and liabilities as at 31 December 2023 and 2022 are as follows:
Deferred tax assets
(in € million)
31.12.2022
P&L
Equity
Translation
differences
and others
Acquisitions
31.12.2023
Brand and patents
20.5
-0.1
0.0
0.0
0.0
20.4
Research and development
7.8
0.0
0.0
0.0
0.0
7.8
Tangible assets and leasing
12.9
-2.7
0.0
5.2
0.2
15.7
Provisions for risks
30.5
-3.0
0.0
0.6
0.1
28.2
Inventory
14.0
2.8
0.8
-0.1
0.0
17.6
Hedging
1.3
-2.3
3.4
0.0
0.0
2.3
Tax timing differences
7.4
-3.9
0.0
0.2
2.4
6.0
Tax losses
4.1
5.8
0.0
-0.2
0.0
9.7
Other
2.7
-0.6
0.0
4.7
0.0
6.9
Total
101.2
-4.0
4.2
10.4
2.7
114.6
Deferred tax liabilities
(in € million)
31.12.2022
P&L
Equity
Translation
differences
and others
Acquisitions
31.12.2023
Brand and intellectual property
-11.6
0.0
0.0
2.9
-133.8
-142.5
Tangible assets and leasing
-7.2
0.7
0.0
-6.9
-13.6
-26.9
Inventory
-1.5
1.3
0.0
-0.7
-2.4
-3.3
Taxes on undistributed profits
-16.8
-3.0
0.0
0.0
-4.8
-24.6
Hedging and exchange gain or loss
-11.0
2.0
4.3
0.0
0.0
-4.6
Tax timing differences
-6.9
2.2
0.0
-3.8
0.0
-8.5
Other
-6.8
10.7
0.5
-4.9
-3.3
-3.8
Total
-61.8
13.9
4.8
-13.3
-158.0
-214.3
The column acquisitions includes the effects of the Wolf-Brink business acquisition, mainly consisting of the purchase
price allocation.
Starting from 2021, a deferred tax liability on the undistributed earnings in Ariston subsidiaries is recorded equal to the
expected tax burden on the remittance of earnings from those jurisdictions The amount of the deferred tax liabilities on
undistributed earnings recorded in 2023 is equal to € 24.6 million with an increase of € 7.8 million in respect to the
previous year. Part of this increase, € 4.8 million, relates to the undistributed earnings of the Wolf-Brink group recorded
in the purchase price allocation. The remaining part, equal to € 3.0 million, relates to the profits realised in 2023 by the
Ariston and Wolf-Brink companies in the countries in which they operate.
The decision to recognise deferred tax assets is made for each legal entity in the Group by critically assessing whether
the conditions exist for the future recoverability of such assets on the basis of actual results, as well as updated plans.
180
Ariston recognises in its consolidated statement of financial position under deferred tax assets the amount of deferred
tax assets less the deferred tax liabilities of the individual consolidated legal entities, where these may be offset.
“Financial assets” amounted to € 4.4 million at 31 December 2023, down by € 1.7 million compared to December 2022.
This item mainly consists of the value of “Other investments” held for the medium/long term, measured at fair value,
since they are largely classified as “Financial instruments at fair value through profit or loss (FVTPL)”.
The decrease during the period is due to the remeasurement (refer to ‘Note 1.11 – Profit (loss) on investments’ for further
information), in accordance with IFRS 9, of the equity investment in an “Investment company in risk capital (SICAR) pro-
vision” specialising in interventions in sectors where the Group operates, by the parent company Ariston Holding N.V.
“Other non-current assets” includes primarily the security deposits due beyond the year and other assets with a financial
impact spreading beyond one year.
At 31 December 2023, the item amounted to € 7.8 million, up compared with € 7.0 million in 2022.
“Non-current tax receivables” amounted to € 1.4 million at 31 December 2023, slightly down on € 0.7 million in the same
period of 2022. The item includes receivables from tax authorities payable to the Group.
Note 2.8 – Inventories
Below is the composition of “Inventories” at 31 December 2023 and at 31 December 2022, net of the obsolete stock
provision.
Inventories
31.12.2023
31.12.2022
(in € million)
Raw materials
204.6
158.1
Work in progress and semi-finished goods
40.5
20.4
Finished goods and goods for resale
373.9
298.2
Total
619.0
476.8
The gross value of inventories, at 31 December 2023, amounted to € 686.5 million (€ 525.6 million at 31 December 2022),
whereas the provision amounted to € 67.5 million (€ 48.8 million at 31 December 2022).
Inventories totalled € 619.0 million at 31 December 2023, up by € 142.2 million on 31 December 2022. This change is
essentially attributable to several factors, as summarised below:
•
Perimeter variation equal to € 123.5 million for the business combination with Wolf-Brink;
•
Organic change of € 23.5 million mainly driven by the increase in heating finished products associated with the slow-
down in some important markets;
•
Negative exchange rate effect of € 4.7 million.
Inventories are recognised at the lesser value between purchase and production cost, according to the weighted average
cost method and their net realisable value which includes costs necessary to sell inventories and based on that for the
Group they did not have a material impact.
The provision set up for obsolete or slow-moving stock is substantially in line with the previous year in terms of the
percentage on the gross amount of Inventories, meanwhile showing an absolute variation equal to € 18.7 million.
181
The obsolescence risk is measured taking into account stock rotation, calculated monthly as the ratio of inventories to
consumption over the last twelve months for raw materials (forty-eight months for spare parts with a life cycle defined
as “inactive”), and the product life cycle. In the obsolescence risk, the Group has considered for materials and products
in stock the technological obsolescence which can arise from climate change and the energy transition. On the basis of
the parameters mentioned above, impairment percentages are applied which increase in proportion to the estimated
risk.
The change in the obsolete stock provision was as follows:
Obsolete stock provision
Raw materials
Work in
progress and
semi-finished
goods
Finished goods
and goods for
resale
Total
(in € million)
As at 31.12.2022
11.4
1.9
35.6
48.8
Perimeter variation
5.1
0.4
5.7
11.2
Increases
18.1
2.7
31.4
52.2
Decreases
-7.3
-0.2
-8.3
-15.8
Release
-10.2
-1.7
-16.8
-28.7
Exchange rate effect
-0.1
0.0
0.1
0.0
Other
-0.4
-0.2
0.4
-0.2
Total changes
5.2
1.0
12.5
18.7
As at 31.12.2023
16.6
2.9
48.1
67.5
The recognition of inventories according to the weighted average cost method does not show any significant differences
compared with a valuation at current costs.
Trade receivables amounted to € 361.3 million, net of a bad debt provision of € 21.2 million.
Compared with 31 December 2022, the net balance shows a € 52.9 million increase in absolute values. This increase is
attributable to, in addition to the effects of the geographical mix, the acquisition of Wolf-Brink in early 2023, partially
compensated by the strong collection performance of the Group.
The percentage of trade receivables on the turnover of the last 12 months was equal to 11.7% compared with 13.0%
recorded at 31 December 2022.
The bad debt provision of € 21.2 million shows a net increase by € 4.3 million compared with 31 December 2022. This
increase is mainly attributable to the acquisition of Wolf-Brink. For Trade Receivables, the Group, applies a simplified
approach using a provision matrix in the calculation of expected losses based on historical loss rates and then adjusting
for forward-looking information. Based on this model, according to IFRS9, the policy defines a percentage of statistical
devaluation based on the division of trade receivables into clusters of ageing and country risk and then applying a forward-
looking factor determined by the counterparty Probability of Default (PD) at 1 year obtained from external resources. A
specific fund is provided for legal and specific devaluation due to the situation of single clients and their economic envi-
ronment.
At 31 December 2023, the provision was deemed to be appropriate for the estimated losses from unsecured or disputed
receivables.
182
F
ollowing are the changes in the bad debt provision:
Bad debt provision
Short-term
Medium/long-
term
Total
(in € million)
As at 31.12.2022
12.3
4.7
17.0
Perimeter variation
2.6
0.0
2.6
Increases
6.6
0.6
7.1
Decreases
-1.3
-0.7
-1.9
Release
-2.9
-0.6
-3.5
Exchange rate effect
-0.2
0.0
-0.2
Other
-0.0
0.1
0.1
Total changes
4.9
-0.6
4.3
As at 31.12.2023
17.1
4.1
21.2
The item “Other” includes primarily the reclassifications made for the period in order to ensure the correct recognition
of receivables subject to special valuation, such as those in legal proceedings or in litigation.
The item “Tax receivables” includes primarily the amounts due to the companies of the Group from the taxation author-
ities in several countries where the Group operates. At 31 December 2023, the item amounted to € 47.8 million versus €
28.4 million in 2022, mainly due to:
Tax receivables
31.12.2023
31.12.2022
(in € million)
Tax receivables for taxes paid in excess
26.1
16.7
Tax receivables from Parent company
16.3
7.1
Other short-term tax receivables
5.4
4.6
Total
47.8
28.4
Ariston Holding N.V. is incorporated in the Netherlands but is a tax resident of Italy and is controlled by Merloni Holding
S.p.A. Ariston Holding N.V. and its Italian subsidiaries have adopted the national tax consolidation scheme. At 31 Decem-
ber 2023, the individual Italian companies' income tax receivables and payables were recorded from or to, respectively,
Merloni Holding S.p.A. These amounts are included in the “Tax receivables” from the controlling shareholder for the tax
consolidation. The increase amounts to € 9.2 million and mainly derives from higher tax losses accrued in Italy in 2023.
As at 31 December 2023, the item “Current financial assets” amounted to € 35.1 million, down from € 47.1 million re-
ported at the end of 2022.
•
“Short-term financial receivables”, including primarily security deposits, which amounted to € 7.9 million as at 31
December 2023 (€ 2.2 million as at 31 December 2022);
•
the positive impact of “Financial derivative assets” for € 17.1 million (€ 34.8 million as at 31 December 2022) is gen-
erated by the fair value measurement of derivative financial instruments. The fair value of financial derivatives in-
cluded hedges on commodities for € 0.2 million, on interest rates for € 16.5 million and on foreign exchange for € 0.4
million.
The amount of derivatives closed but not yet collected amounted to € 4.9 million (€ 2.0 million as at 31 December
2022);
•
the short-term bank notes or similar tradable instruments held by subsidiaries in China amounted to € 2.6 million (€
2.5 million as at 31 December 2022), issued and backed up by leading domestic banks and used in commercial trans-
actions with customers and suppliers in order to settle supply agreements.
“Other current assets” amounted to € 87.4 million versus € 50.8 million at 31 December 2022. The main items are:
Other current assets
31.12.2023
31.12.2022
(in € million)
Indirect tax receivables
52.9
25.0
Prepaid expenses
12.3
8.8
Advances to suppliers
10.4
8.2
State Green Programmes
0.9
1.2
Credits from government
0.9
3.8
Receivables from employees
0.9
1.2
Other receivables
9.1
2.5
Total
87.4
50.8
The increase in ‘Other current assets’ is mainly related to indirect tax receivables and prepaid expenses.
The reasons for the increase are a mixed effect of perimeter variation and business activity.
“Cash and cash equivalents”, amounting to € 451.2 million as at the end of December 2023, are represented almost
entirely by cash on hand, as shown in the following table:
Cash and cash equivalents
31.12.2023
31.12.2022
(in € million)
Bank and postal deposits
385.6
961.2
Short-Term Investments
63.7
38.0
Cash on hand
1.9
0.2
Total
451.2
999.3
The amount shown in the line “Bank and postal deposits” primarily consists of credit balances on current accounts and
compared to 31 December 2022, it decreased by € 575.6 million mainly due to the Wolf-Brink acquisition payment cash
out executed on 2 January 2023. “Short-term Investments” increased by € 25.7 million compared to 31 December 2022.
The amount of cash on hand with a pre-determined use is not significant.
The reconciliation between Cash & Cash Equivalents and the Consolidated statement of cash flows is provided below:
Table of Reconciliation between Cash & Cash Equivalents and the Consolidated state-
ment of cash flows
31.12.2023
31.12.2022
(in € million)
Cash and cash equivalents
(as included in the Consolidated statement of financial position)
451.2
999.3
Short-term bank notes or similar tradable instruments and others
3.3
3.3
Bank overdrafts
-1.0
-7.4
Notes payable
-13.5
-17.6
Cash and cash equivalents
(as included in the Consolidated statement of cash flows)
440.0
977.5
For the purpose of the ‘Consolidated Statement of Cash flow’, the Group included within ‘Cash and cash equivalents’ the
financial instruments reported above in the table (bank overdrafts, short-term bank notes and notes payable) since these
instruments are readily convertible and repayable on demand. With particular reference to the short-term bank notes
and notes payable, such instruments are similar to bank overdrafts and are used especially in China to settle commercial
transactions, with the net balance of such notes fluctuating throughout the year.
Note 2.14 – Assets held for sale
At 31 December 2023, the item “Assets held for sale” amounted to € 0.3 million, down by € 1.0 million compared with
31 December 2022. The item includes the assets held for sale by the Romanian subsidiary, recognised, as stated in IFRS
5, at the lower of the net book value and the fair value (net of sale costs).
6.6.3
Statement of financial position – Liabilities and equity
At 31 December 2023, the fully paid up share capital of Ariston Holding N.V. was € 46,476,001.99, comprising 125,505,005
ordinary shares and 22,095,194 non-listed ordinary shares with a nominal value of € 0.01 each, and 225,000,000 multiple
voting shares with a nominal value of € 0.20 each. The capital structure as at 31 December 2023 for ordinary shares, non-
listed ordinary shares and multiple voting shares is reported below.
|
Shareholders
|
Ordinary
shares
(1)
|
Non-listed ordi-
nary shares
(2)
|
% of total ordi-
nary shares and
non-listed ordi-
nary shares
|
Multiple voting
shares
(3)
|
Total number of
shares
(6)
|
% of total
shares
|
|
Merloni Holding
S.p.A.
|
(4)
19,506,000
|
13.22%
|
198,000,000
|
217,506,000
|
58.38%
|
|
|
Amaranta S.r.l.
|
2,649,000
|
1.79%
|
27,000,000
|
29,649,000
|
7.96%
|
|
|
Treasury shares
|
2,237,346
|
1.52%
|
2,237,346
|
0.60%
|
||
|
(4)
Centrotec SE
|
19,321,473
|
22,095,194
|
28.06%
|
41,416,667
|
11.12%
|
|
|
Other share-
holders
|
(5)
81,791,186
|
55.41%
|
81,791,186
|
21.95%
|
||
|
Total
|
125,505,005
|
22,095,194
|
100.00%
|
225,000,000
|
372,600,199
|
100.00%
|
(1) Ordinary shares are listed, freely transferable and each of them confers the right to cast one vote.
(2) Non
-
listed ordinary shares are not listed, freely transferable (subject to lock
-
up provisions, see (5) below) and each
of them confers the right to cast one
vote.
(3) Multiple voting shares confer economic rights equal to the ordinary shares, are not listed and confer the right to cast t
wenty votes, subject to a voting
threshold. See "Share capital and general meeting", subparagraph "Voting rights and adoption of resolutions" in the Governance report. If a holder of
multiple voting shares intends to transfer to any third party (be it a shareholder or not) one or more multiple voting shares, the other holders of multiple
voting shares shall have the right, in accordance with the procedure outlined in article 16 of the articles of association, to exercise a
right of first refusal.
(4) Pursuant to the lock
-
up provisions included in the agreement for the sale and purchase o
f CENTROTEC Climate Systems GmbH entered into between
CENTROTEC SE and Ariston Holding N.V. on 15 September 2022, CENTROTEC SE may not transfer the 41,416,667 ordinary shares and non-listed ordinary
shares it holds in the capital of the Company following the sale of CENTROTEC Climate Systems GmbH until 2 January 2024 and may not transfer more
than 20,708,332 ordinary shares and non-listed ordinary shares until 2 January 2025.
(5) Including 442,558 ordinary shares held by Paolo Merloni.
(6) Each issued and outstanding share ranks equally with, and will be eligible for any dividends that may be declared on, all other shares, and will be equally
entitled to the profits and (other) reserves of the company, except for the entitlement to the conversion reserve and the liquidation distribution. All profit
distributions and repayment of capital will be made in such a way that on each share the same amount or value is distributed.
The total consolidated equity at 31 December 2023 amounted to € 1,502.5 million, up compared with € 1,012.2 million
at 31 December 2022.
•
the increase in Group net profit for the period, amounting to € 191.2 million;
•
the increase in “Share capital” (€ 0.4 million) and the additional “Share premium reserve” (€ 398.2 million) made on
2 January 2023 relates to the share-based payment transaction used as a partial payment method to finalise the total
acquisition price of Wolf-Brink;
•
in September 2023, the Ariston Group started a treasury share buyback program to serve the Group’s LTI plans with
a number of Ariston shares to be acquired equal to 1,500,000. The treasury share buyback program ended on 27
October 2023. The total amount of treasury shares at 31 December 2023 was equal to € 14.8 million;
•
the financial statements conversion reserve in Group currency, used to recognise differences in exchange rates deriv-
ing from the translation of the financial statements of foreign subsidiaries not included in the Euro area, had a positive
impact of € 6.9 million;
•
the decrease in “Retained Earnings and other reserves” for the dividends paid in May 2023 for a total amount equal
to € 48.3 million;
186
•
the negative change due to the remeasurement of the pension provisions, for € 5.2 million, mainly following changes
in the financial and demographic assumptions, recognised in equity in compliance with the revised IAS 19. The re-
measurement reserve shows an additional decrease in other changes, equal to € 9.8 million, due to the perimeter
variation following the Wolf-Brink acquisition;
•
the decrease in the “Reserve for gains/losses” for a total amount equal to € 24.4 million due to the positive MTM in
cash flow hedge accounting;
•
Ariston Group has, from 2021, equity incentive plans under which a combination of performance share units (“PSUs”),
which each represent the right to receive one Ariston common share, have been awarded to the executive directors
and non-executive directors. The “Stock-based incentive plans reserve”, during the year, increased for € 5.4 million
for the expense of LTI plans for 2023 and decreased for € 7.8 million following the assignment of shares for LTI plans
for 2020. As at 31 December 2023 the reserve was equal to € 9.0 million (€ 11.4 million as at 31 December 2022) and
it is related to long-term incentive plans for 2021-2023:
-
2021: € 6.0 million
-
2022: € 2.0 million
-
2023: € 1.1 million
For further detail, refer to ‘Note 3.1.1 - Stock-based incentive plans payments’.
The table below shows the dividends approved and paid during the year and in the previous years:
DIVIDENDS to the parents
(in € thousand)
2023
2022
2021
Dividends paid during the period
48,342
46,366
48,268
As at the reporting date, there were no dividends approved by the general meeting yet to be paid.
The remuneration of the executive directors is in accordance with the remuneration policy. There are no loans, advances
or guarantees provided by the Company or any undertaking belonging to the same group of the Company to or on behalf
of an executive director.
The following table summarises the remuneration received by the executive directors for the years ended 31 December
2023 and 2022:
Director, Position, Year
Base remuneration
Variable incentive
Extraordinary
items
Pension
expense
Total
remuneration
Proportion of
fixed and
variable
remuneration
Fixed Remu-
nerations
Fees
Benefits and
perquisites
Short
-
term
incentive
Long
-
term in-
centive*
Paolo Merloni
Executive
Chair
2023
1,100
80
61
541
981
(1)
-
50
2,813
46% fixed
54% variable
2022
1,000
80
38
666
1,696
(2)
-
43
3,523
33% fixed
67% variable
Maurizio Bru-
sadelli
Chief Executive
Officer
(3)
2023
913
(4)
21
41
406
0
-
19
1,399
not applicable
Laurent
Jacquemin
Chief Executive
Officer
(5)
2023
583
50
37
0
981
(1)
1,000
(6)
-
2,652
not applicable
2022
900
50
79
555
1,017
(7)
-
-
2,601
40% fixed
60% variable
Notes
:
■
Fixed remuneration represents for the executive chair the base salary and the executive director fee. On 20 February 2023, the compensation and
talent development committee unanimously resolved to increase the fixed remuneration to further align on median and LTI. Therefore, the fol-
lowing proposal for the executive directors’ compensation for 2023 was presented to the Board: executive chair base salary at € 1.1 million with
a short-term incentive target of € 600,000 and LTI of € 1.1 million (award counter value) and former CEO fixed remuneration at € 1 million and
LTI of € 1 million (award counter value). The Board unanimously approved the proposal on 2 March 2023.
■
Fees represent the Board fee and the committee membership fees.
187
■
The short-term incentive represents the incentive to be paid for 2023 performance.
■
The long-term incentive value is calculated as follows: (i) for 2023, the LTI is valued referring to the share price of 29 December 2023 at the close
of trading (€ 6.26) (and it refers to the vesting of the 2020 converted LTI phantom stock option plan) and (ii) for 2022, the LTI is valued referring
to the share price of 30 December 2022 at the close of trading (€ 9.62) (and it refers to the vesting of the 2019 converted LTI phantom stock option
plan).
(8)
LTI accrued value based on IFRS2 expenses is € 1,607 thousand.
(9)
LTI accrued value based on IFRS2 expenses is € 1,807 thousand.
(10)
Since 3 August 2023.
(11)
Maurizio Brusadelli’s fixed remuneration consists of (i) € 400,000 per annum for his position as general manager, (ii) € 800,000 per annum for his
position as executive director, and (iii) € 700,000 per annum for his non-compete consideration.
(12)
As until 27 July 2023.
(13)
On 3 May 2023 the Board, at the proposal of the compensation & talent development committee, approved a retention package to incentivise
Laurent Jacquemin to stay as non-executive director in case of his early resignation as chief executive officer, considering his 30+ years in the
Company, his profound knowledge of the business and his vision for the long term plans for the Group. This retention package includes the pay-
ment of a € 1 million lump sum, the continuation of his rights under the 2021 LTIP and maintenance of benefits for a value of € 35,000.
(14)
LTI accrued value based on IFRS2 expenses is € 1,084 thousand.
Until Admission, the executive directors participated in the long-term incentive plan providing for phantom stock. Upon
Admission this plan was terminated and the outstanding phantom stock options were converted (a) at the option of the
beneficiaries, into ordinary shares at the offer price of the Company's initial public offering or cash (in relation to vested
phantom stock options) and (b) into restricted share units (in relation to unvested phantom stock options), with a vesting
period of three years from the date of the original grant (phantom stock options granted in 2019 vest in 2022, phantom
stock options granted in 2020 vest in 2023). In addition, a new long-term incentive plan was approved by the general
meeting providing for awards in the form of performance share units as from 2021.
The executive directors chose to convert the vested phantom stock options entirely into ordinary shares.
The table below provides an overview of ordinary shares held by executive directors as of 31 December 2023.
Executive director
Number of ordinary shares
Paolo Merloni
442,558
Laurent Jacquemin
415,235
Maurizio Brusadelli
50,000
The table below provides an overview of the conversion result for the phantom stock options awarded in 2020 that were
unvested at Admission and converted into restricted share units at the offer price of the Company's initial public offering
and the LTIP 2021, 2022 and 2023 award of performance share units.
Director,
position
Main conditions of performance share plans
Information regarding 2023
Opening
balance
During the year
Closing balance
Plan
Performance
period
Vesting start
date
Vesting end
date
Perfor-
mance
shares on
1 January
2023
(1)
Perfor-
mance
shares
awarded
Perfor-
mance
shares
vested
Shares
vested
Share
awarded
and un-
vested
Unexer-
cised
shares
Paolo Merloni
Executive Chair
2020
2020-2022
31.03.2020
31.03.2023
156,737
0
156,737
156,737
0
156,737
2021
2021-2023
31.03.2021
31.03.2024
112,000
0
0
0
112,000
0
2022
2022-2024
28.04.2022
31.03.2025
104,948
0
0
0
104,948
0
2023
2023-2025
04.05.2023
30.03.2026
0
110,741
(2)
0
0
110,741
0
Maurizio Brusadelli
Chief Executive Of-
ficer
(3)
2023
2023-2025
03.08.2023
30.03.2026
0
208,776
(4)
0
0
208,776
(
0
Laurent Jacquemin
Chief Executive Of-
ficer
(5)
2020
2020-2022
31.03.2020
31.03.2023
156,737
0
156,737
156,737
0
156,737
2021
2021-2023
31.03.2021
31.03.2024
112,000
0
0
0
112,000
0
2022
2022-2024
28.04.2022
31.03.2025
94,453
0
0
0
94,453
0
2023
2023-2025
04.05.2023
30.03.2026
0
0
(6)
0
0
0
0
(7)
Unvested share units.
(8)
The number of PSUs to be granted to the executive chair, as resolved by the Board on 2 March 2023 on the proposal of the compensation
and talent development committee, is determined by dividing the individual award by the average closing price of the Company’s shares on
the 30 trading days before the award. Specifically, for 2023 the average closing price on 3the 0 trading days before the award was € 9.9331.
188
(9)
Since 3 August 2023.
(10)
The number of PSUs to be granted to the chief executive officer, as resolved by the Board on 3 August 2023 on the proposal of the compen-
sation and talent development committee, is determined by dividing the individual award by the average closing price of the Company’s
shares on the 30 trading days before the grant. Specifically, the average closing price on the 30 trading days before the award was € 9.1007.
(11)
As until 27 July 2023.
(12)
Following the communication by the former chief executive officer to the Board of 3 May 2023 about his decision to step down and resign as
CEO and executive director of the Company, no LTIP 2023 has been awarded.
The requirement in the Dutch Civil Code is to disclose this information over five financial years. However, as the Company
was incorporated in its current structure in November 2021, meaningful total remuneration information is only available
and relevant from 2021 onwards.
The following table shows a comparison of the fixed remuneration of the executive directors over the last five years who
served as executive directors in 2023.
Annual change
2019
2020
2021
2022
2023
Executive directors' fixed remuneration
(in € thousand)
Paolo Merloni
Executive Chair
1,005
995
1,003
1,118
1,241
Maurizio Brusadelli
Chief Executive Officer
(1)
N.A.
N.A.
N.A.
N.A.
974
Laurent Jacquemin
Chief Executive Officer
(2)
718
782
880
1,029
670
Executive directors' total remuneration
(in € million)
Paolo Merloni
Executive Chair
N.A.
N.A.
2,879
3,523
2,813
Maurizio Brusadelli
Chief Executive Officer
(1)
N.A.
N.A.
N.A.
N.A.
1,399
Laurent Jacquemin
Chief Executive Officer
(2)
N.A.
N.A.
2,128
2,601
2,652
Company performance
(in € million)
EBIT
134
149
171
194
285
EBITDA
209
227
247
283
417
EBIT Adjusted
149
164
203
223
314
EBITDA Adjusted
223
239
277
305
422
Average remuneration on a full-time equivalent basis of employees
(3)
Employees of the Group
N.A
N.A
54
59
65
Internal pay ratio Chief Executive Officer
(3)
Chief executive officer vs em-
ployees of the Group
N.A
(4)
N.A
(4)
40
44
N.A.
(6)
Since 3 August 2023
(7)
As until 27 July 2023
(8)
The population composition changes among the years in terms of FTE, mix and countries
(9)
Not available as the Company was not listed in 2019 and 2020
In accordance with Dutch law and the Dutch corporate governance code, the internal pay ratio is an important factor for
determining the remuneration policy. The Dutch corporate governance code was amended on 20 December 2022 and
entered into force as for the financial year beginning on or after 1 January 2023. Pursuant to the new version of the Dutch
corporate governance code 'pay ratios' is understood to mean the ratio between (a) the total annual remuneration of
the chief executive officer and (b) the average annual remuneration of the employees of the company and the group
companies whose financial data the company consolidates, where: (i) the total annual remuneration of the chief execu-
tive officer includes all remuneration components (such as fixed remuneration, variable remuneration in cash (bonus),
the share-based part of the remuneration, social security contributions, pension, expense allowance, etc.), as included in
the (consolidated) financial statements; (ii) the average annual remuneration of the employees is determined by dividing
189
the total wage costs in the financial year (as included in the (consolidated) financial statements) by the average number
of FTEs during the financial year; and (iii) the value of the share-based remuneration is determined at the time of assign-
ment, in line with the applicable rules under the applied reporting requirements. The Company has elected to follow this
methodology from 2022. In 2023, given the change of chief executive officer, it is not possible to determine the annual
remuneration of the chief executive officer. The pay ratio based on the annualised total remuneration (fixed remunera-
tion and variable incentive) of the new chief executive officer is equal to 75. The difference between the pay ratio of the
former and the new Chief executive officer is linked to the higher overall remuneration package of the latter.
The remuneration of the non-executive directors is in accordance with the remuneration policy. There are no loans, ad-
vances or guarantees provided by the Company or any undertaking belonging to the same group of the Company to the
non-executive directors.
The following table summarises the remuneration received by the non-executive directors for the years ended 31 De-
cember 2023 and 2022.
Non-executive director
(in € thousand)
Fee
2023
Supplementary committee
Fee 2023
Remuneration
2023
Remuneration
2022
Laurent Jacquemin
(1)
50
0
50
50
Francesco Merloni
50
0
50
50
Marinella Soldi
50
20
70
70
Antonia Di Bella
50
10
60
0
Guido Krass
50
10
60
0
Roberto Guidetti
50
40
90
90
Maria Francesca Merloni
50
0
50
50
Lorenzo Pozza
50
20
70
70
Ignazio Rocco di
Torrepadula
50
20
70
60
Enrico Vita
50
10
60
60
(1) As since 27 July 2023.
The following table shows a comparison of the fixed remuneration of non-executive directors over the last five years who
served as non-executive directors in 2022:
Non-executive director
(in € thousand)
2019
2020
2021
2022
2023
Laurent Jacquemin
(1)
50
(2)
50
(2)
48
(2)
50
(2)
50
Francesco Merloni
50
50
48
50
50
Marinella Soldi
74
74
67
70
70
Antonia Di Bella
0
0
0
0
60
Guido Krass
0
0
0
0
60
Roberto Guidetti
59
59
71
90
90
Maria Francesca Merloni
50
50
48
50
50
Lorenzo Pozza
0
0
38
(3)
70
70
Ignazio Rocco di Torrepadula
0
0
38
(3)
60
70
Enrico Vita
56
53
52
60
50
(1) Since 27 July 2023.
(2) Fees received when CEO.
(3) Since 15 June 2021.
Notes 3.2 – Deferred tax liabilities
Comments on “Deferred tax liabilities” are included in ‘Note 2.4 - Deferred tax assets and liabilities’, to which reference
should be made.
Note 3.3 – Non-current provisions
Current and non-current “Provisions for risks and charges” totalled € 142.6 million, up by € 46.8 million compared with
the previous year.
The following table shows the composition of this item and the changes occurring during the year:
Non-current
and current
provisions
Agent
supplementary
indemnity
provision
Product
warranty
provision
First
installation
provision
Other Provi-
sions
Total
(in € millions)
As at
31.12.2022
2.8
65.1
7.5
20.4
95.8
of which:
- Current
0.0
21.2
2.4
12.7
36.2
- Not Current
2.8
43.9
5.1
7.8
59.6
Perimeter variation
0.2
20.9
0.7
1.7
23.5
Increases
0.5
53.9
2.2
14.7
71.3
Decreases
-0.6
-35.4
-2.6
-2.9
-41.5
Releases
0.0
-3.6
-0.1
-3.0
-6.7
Other
0.0
-0.0
-0.2
0.4
0.2
Total changes
0.2
35.8
0.0
10.9
46.8
As at
31.12.2023
3.0
100.9
7.5
31.3
142.6
of which :
- Current
0.0
46.7
2.6
19.6
68.9
- Not Current
3.0
54.2
4.9
11.7
73.8
Details of and changes in “other provisions” are the following:
Other provisions
Legal Dispute
Provision
Restructuring
Provision
Other Provision
Total
(in € millions)
As at
31.12.2022
5.5
1.9
13.0
20.4
of which:
- Current
5.1
1.9
5.7
12.7
- Not Current
0.5
0.0
7.3
7.8
Perimeter variation
0.4
0.0
1.4
1.7
Increases
2.1
0.0
12.6
14.7
Decreases
-0.1
-0.1
-2.7
-2.9
Releases
-0.1
-1.6
-1.3
-3.0
Other
0.0
0.0
0.3
0.4
Total changes
2.3
-1.7
10.3
10.9
As at
31.12.2023
7.9
0.2
23.3
31.3
of which :
- Current
7.3
0.2
12.2
19.6
- Not Current
0.6
0.0
11.1
11.7
“Current provisions for risks and charges” amounted to € 68.9 million versus € 36.2 million at 31 December 2022, whereas
“Non-current provisions for risks and charges” amounted to € 73.8 million versus € 59.6 million in the previous year.
More specifically, the “Agent supplementary indemnity provision” recognises the accruals for covering indemnities that
may be due to agents on their employment termination. The provision shows a limited increase of € 0.2 million compared
to the previous year.
The “Product warranty provision”, which represents estimated costs to be borne for technical support of products sold
under warranty, is appropriate in order to hedge the related risk.
191
The method used to determine this provision is based on historical/statistical data concerning warranty work performed,
costs incurred for such work and products sold on the market which are still under warranty at the evaluation date.
The provision had a net € 35.8 million increase mainly due to the normal management activities of the warranty on
manufactured and sold products and for the perimeter variation of Wolf-Brink for € 20.9 million.
The “First installation provision” represents the estimated expense that the Group must bear for interventions of this
type on products. The movements of the period did not impact the closing balance which was the same as the previous
year.
The item “Other provisions” includes estimated future charges for corporate restructuring, pending legal disputes and
other risks that it was deemed necessary to cover with appropriate provisions which were estimated based on the avail-
able information.
The increase in 2023 primarily regarded estimated future charges for ongoing litigation and other Group risks.
The item “Other” includes the effect of exchange rates for the period and reclassifications.
The Group has two defined benefit plans for employees, the first one is employee severance indemnity, due from Italian
companies to their employees in compliance with laws in force until 31 December 2015, and other current pension plans
mostly in Switzerland and Germany.
Until 31 December 2006, in Italy, the employee severance indemnity provision (
Trattamento di fine rapporto
, TFR) was
considered a defined benefit plan. The regulation of this provision was amended by Law no. 296 of 27 December 2006
(“2007 Financial Law”) and subsequent Decrees and Regulations issued in the first few months of 2007. Given these
amendments and in particular in reference to companies with at least 50 employees, this is now considered a defined
benefit plan only for the portions of benefits accrued before 1 January 2007 (and not yet paid as at the end of the report-
ing period, while subsequent to this date, it is comparable to a defined contribution plan).
IAS 19 expressly envisages the adoption of the “projected unit credit method”, which is based on quantifying the actuarial
liability by considering only the service accrued at the evaluation date, in accordance with the actuarial approach of so-
called “accrued benefits”. In particular, in the projected unit credit method, this characteristic is integrated with the
forecast of the salary trend up to the time that the TFR will probably be paid; the consequent liability is then re-propor-
tioned on the basis of the ratio between the years worked up to the assessment period and the total service at the
probable date of payment of the TFR (should the right already be completely accrued at the evaluation date, there will
then be no re-proportioning of the liability).
Since as from 1 January 2007, for employees belonging to companies with at least 50 employees, no amount is any longer
internally provisioned, but the amounts of TFR accrued subsequent to that period are assigned to the Complementary
Pension Fund or to the INPS (Italian National Social Security Institute) Treasury Fund and the company remains solely
responsible for the duty of re-evaluating the amount accrued at 31 December 2006, the actuarial calculation must esti-
mate, in correspondence to every possible event which leads to the payment of TFR to the worker, the associated prob-
ability, the consequent amount paid and the years of service corresponding to the payment date. The latter, in particular,
is a random variable that can take on any value between initial service and the maximum service that the worker can
perform in correspondence with retirement, with probabilities that can be deduced from the economic and demographic
technical bases used in the evaluation.
For the related actuarial assessments, the demographic and economic-financial assumptions set out in the attached table
have been adopted.
The pension funds of the German companies are regulated on a pension system based on three pillars.
The “first pillar” (state and obligatory pension insurance contribution (RV-Beitrag)) is a defined contribution pension plan,
established by the social pension insurance, based on the pay-as-you-go principle and related to the income limit. It
covers employees in the public and private sector and some categories of self-employed workers and is mainly financed
through social security contributions paid by workers and employers in equal measure.
The “second pillar” (company pension scheme (BAV: Betriebliche Altersvorsorge) is represented by voluntary supplemen-
tary pensions on a pay-as-you-go basis, and thus with defined benefits falling on the company.
There
are
different
types
of
BAV
pension
plans
that
qualify
as
defined
benefit
plans / defined benefit obligations.
Pension
plans
have
developed
differently
in
the
Group’s
companies
in
Germany.
192
•
ELCO:
a)
T
here
are
currently
two
different pension plans considered as defined benefits plans: the
so-called BVO
74/79 (based on employees’ pension commitments) which
covers
all
the
people
who
were
working
on
1
March
1979
and
up
to
31
December 1994;·the so-called “1995 Pension” which was applied for all
employees, including those who benefited from the BVO 74/79, as from 1 January 1995 to date;
b)
For all employees who started to work in the period March 1979-December 1994 a different defined con-
tribution pension plan (OLS 79) was applied until December 1994 (BVO 79, based on one-off payments).
For a) + b) the related actuarial assessments, the demographic and economic-financial assumptions set out
in the attached table have been adopted.
Both pension plans are closed. The measurement is split between pensioners and vested rights for early
leavers and active employees.
c)
The “BASIS Versorgung”, based on direct insurance; and “ZUSATZ Versorgung”, based on employee pension
commitments (both still active).
•
WOLF:
Under the second pillar Wolf GmbH has the so-called “Plan 1” (still active) which contains three direct pension
commitments,
a)
the “Essener Verband” which covers all People on Top Management Level;
b)
the “Salzgitterrichtlinie (alt)” which covers all the people who joined the Company before 1 January 1986;
c)
the “Salzgitterrichtline neu” which covers all the people who joined from 1 January 1986.
For a) - c) the related actuarial assessments, the demographic and economic financial assumptions set out in the
attached table have been adopted.
The “third pillar” is a voluntary, private savings plan in funds or insurance companies which is encouraged through tax
incentives an
d
subsidies.
•
ELCO: Deferred compensation (Gehaltsumwandlungen) / provident fund (closed, but vested rights) (Unter-
stützungskasse).
•
WOLF: “Plan 2” for deferred compensation (Gehaltsumwandlungen).
The pension funds of the Swiss companies are regulated on the basis of three pillars:
•
Public Pillar (AHV/IV): defined benefits, based on the pay-as-you-go principle, regulated at federal level and managed
by a public fund (AVS-Fund), obligatory and aimed at covering basic needs;
•
Occupational Pillar (BVG): based on the funded principle, regulated at federal level, quasi-obligatory, with the collec-
tive financing principle, but with private cover and management risk;
•
Private Savings: at the discretion of each resident, in various forms (cash, securities, real estate, personal pension
plans, life insurance).
The pension funds set up pursuant to the second pillar and which affect the Group most directly must be legally inde-
pendent from the sponsor company, segregated in terms of equity and independently managed in the legal form of
cooperative foundations or associations registered with a regulatory authority. The administrative bodies of such associ-
ations consist of an equal number of representatives from the sponsor companies and employees with equal voting rights,
are supported by a management consultant recognised by the law and by qualified actuarial experts, and are subject to
supervision by the regional authorities.
The funds are financed through the contribution of the employee’s sponsor company. The sponsor’s contribution must
be at least 50% (obligatory minimum by law) and the contributions vary from pension fund to pension fund.
The contributions and the return on the market of the invested capital contribute to defining the benefits. A guarantee
is envisaged for a minimum nominal return and a minimum interest rate on the amount paid in. Should it be underfunded,
which is not the case of the Group’s pension funds in Switzerland, it is the responsibility of the sponsor company which
is obligated by law to recapitalise within a reasonable timeframe, not exceeding 10 years.
In the current situation of the Group’s pension funds in Switzerland, the investment risks are met by fluctuation reserves
(i.e. by assets which exceed the actuarial liabilities) and the level of actuarial cover is over 100%; therefore, there is cur-
rently no need for recapitalisation measures.
193
For the related actuarial assessments, the demographic and economic-financial assumptions set out in the attached table
have been adopted.
In relation to the recognition of the Group’s pension funds:
•
current employment-related costs have been recognised in the income statement, under Personnel costs;
•
financial charges on the assumed obligations and the financial gains expected on the plan assets are recognised under
financial income and expense;
•
actuarial gains and losses are recognised in a specific valuation reserve under equity.
The plan assets do not include the Group’s treasury shares, nor property occupied or used by the Group. The expected
return on plan assets is defined on the basis of the current market conditions.
At December 2023, the remeasurement emerging in the period amounted to a negative € 6.9 million against the positive
€ 11.4 million of December 2022. The negative effect was mainly due to the perimeter variation of Wolf-Brink which
increased the net liability by € 45.8 million. The other impacts were affected mainly by the change in the financial and
demographic assumptions used, especially at the Swiss subsidiaries, compensated by the Asset ceiling recorded in Swiss
and German companies as shown in the description below. Finally, a Swiss subsidiary recognised a surplus on the pension
fund under “other non-current assets” totalling € 0.6 million.
This was mainly the result of the trend in rates and the returns on investments.
The item “Foreign exchange gains (losses)” shows the differences in exchange rates due to the translation of the Swiss
franc into the consolidation currency.
The following table shows the changes in the provisions for employee benefits that occurred during the period:
Employee Benefits
Switzerland
Germany
Italy
Other
Total
(in million €)
31.12.2023
31.12.2022
31.12.2023
31.12.2022
31.12.2023
31.12.2022
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Amounts recognised in the in-
come statement
Current service cost
-3.4
-5.0
-1.9
-0.1
-0.1
0.0
-0.8
-0.9
-6.2
-5.9
Past service cost
0.1
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.1
Financial expense for obligations
-3.4
-0.6
-2.3
-0.3
-0.4
-0.1
-0.9
-0.4
-7.0
-1.4
Financial income on plan assets
3.5
0.7
0.0
0.0
0.0
0.0
0.2
0.1
3.7
0.8
Curtailment, settlement, plan
amendment
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Other pension cost
0.0
0.0
-0.1
0.2
0.0
0.0
0.0
0.0
-0.1
0.2
Net periodical cost
-3.1
-4.8
-4.2
-0.2
-0.5
-0.1
-1.6
-1.2
-9.5
-6.3
Group obligations
Current value of defined benefit
plans
-223.7
-184.6
-67.6
-19.4
-12.6
-12.0
-12.1
-11.2
-316.0
-227.2
Fair value of plan assets
237.3
207.3
2.8
0.0
0.0
0.0
4.7
4.4
244.9
211.7
Total
13.6
22.8
-64.8
-19.4
-12.6
-12.0
-7.4
-6.8
-71.1
-15.5
Unrecognised plan assets
-15.6
-22.5
0.0
0.0
0.0
0.0
0.0
0.0
-15.6
-22.5
Unrecognised current and past
service cost
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Unrecognised actuarial gains and
losses
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Total
-1.9
0.3
-64.8
-19.4
-12.6
-12.0
-7.4
-6.8
-86.8
-38.0
of which: Post employee benefits
-2.5
-0.3
-64.8
-19.4
-12.6
-12.0
-7.4
-6.8
-87.2
-38.6
Other non-current assets
0.6
0.6
0.6
0.6
Changes in obligations during the
year
BEGINNING OF THE PERIOD
-184.6
-213.8
-19.4
-26.9
-12.0
-13.9
-11.2
-12.0
-227.2
-266.6
Perimeter variation
0.0
0.0
-47.5
0.0
-0.4
0.0
0.0
0.0
-47.9
0.0
Current service
-3.4
-5.0
-1.9
-0.1
-0.1
0.0
-0.8
-0.9
-6.2
-5.9
Past service
0.1
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.1
Financial expense
-4.5
-0.6
-2.3
-0.3
-0.4
-0.1
-0.6
-0.4
-7.8
-1.4
Curtailment, settlement, plan
amendment
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Gains (losses) resulting from ex-
perience
-2.2
-3.0
0.8
0.2
0.0
-0.7
0.1
-0.4
-1.3
-4.0
194
|
Employee Benefits
(in million €)
|
Switzerland
|
Germany
|
Italy
|
Other
|
Total
|
|||||
|
Actuarial gains (losses) resulting
from changes in demographic as-
sumptions
|
0.2
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.2
|
0.0
|
|
Actuarial gains (losses) resulting
from changes in financial assump-
tions
|
-23.9
|
42.1
|
-2.9
|
5.9
|
0.0
|
1.8
|
-0.2
|
1.7
|
-27.0
|
51.6
|
|
Foreign exchange gains (losses)
|
-11.6
|
-10.6
|
0.0
|
0.0
|
0.0
|
0.0
|
-0.4
|
-0.2
|
-12.0
|
-10.9
|
|
Paid benefits
|
11.1
|
10.7
|
5.5
|
1.5
|
0.7
|
0.9
|
0.6
|
0.9
|
17.8
|
14.0
|
|
Other
|
-4.9
|
-4.5
|
0.0
|
0.2
|
-0.3
|
0.0
|
0.3
|
0.1
|
-4.9
|
-4.2
|
|
Total change
|
-39.0
|
29.2
|
-48.3
|
7.4
|
-0.6
|
1.9
|
-1.0
|
0.8
|
-88.8
|
39.4
|
|
END OF THE PERIOD
|
-223.7
|
-184.6
|
-67.6
|
-19.4
|
-12.6
|
-12.0
|
-12.1
|
-11.2
|
-316.0
|
-227.2
|
|
Changes in assets during the year
|
||||||||||
|
BEGINNING OF THE PERIOD
|
207.3
|
232.3
|
0.0
|
0.0
|
0.0
|
0.0
|
4.4
|
4.8
|
211.7
|
237.1
|
|
Perimeter variation
|
0.0
|
0.0
|
2.9
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
2.9
|
0.0
|
|
Financial income on plan assets
|
4.6
|
0.7
|
0.0
|
0.0
|
0.0
|
0.0
|
0.2
|
0.1
|
4.8
|
0.8
|
|
Company’s contributions
|
6.1
|
5.7
|
0.1
|
0.0
|
0.0
|
0.0
|
0.2
|
0.2
|
6.5
|
5.9
|
|
Employees’ contributions
|
4.9
|
4.5
|
0.0
|
0.0
|
0.0
|
0.0
|
0.1
|
0.1
|
5.0
|
4.6
|
|
Curtailment, settlement, plan
amendment
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
|
Payments
|
-11.1
|
-10.7
|
0.0
|
0.0
|
0.0
|
0.0
|
-0.1
|
-0.5
|
-11.2
|
-11.2
|
|
Actuarial gains (losses) from plan
assets
|
12.3
|
-36.4
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
-0.1
|
12.3
|
-36.5
|
|
Foreign exchange gains (losses)
|
13.4
|
11.4
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
13.4
|
11.4
|
|
Asset ceiling
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
|
Other
|
-0.2
|
-0.3
|
-0.2
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
-0.5
|
-0.3
|
|
Total change
|
30.0
|
-25.0
|
2.8
|
0.0
|
0.0
|
0.0
|
0.3
|
-0.4
|
33.1
|
-25.4
|
|
END OF THE PERIOD
|
237.3
|
207.3
|
2.8
|
0.0
|
0.0
|
0.0
|
4.7
|
4.4
|
244.9
|
211.7
|
|
Remeasurements recognised in
OCI
|
||||||||||
|
BEGINNING OF THE PERIOD –
|
||||||||||
|
Other Comprehensive Income
(OCI)
|
-17.9
|
-21.0
|
-4.0
|
-10.1
|
-2.7
|
-3.9
|
-1.5
|
-2.6
|
-26.2
|
-37.6
|
|
Other changes
|
0.0
|
0.0
|
0.0
|
0.0
|
-0.2
|
0.0
|
0.2
|
0.0
|
0.0
|
0.0
|
|
Actuarial gains (losses) following
adoption of IAS 19R
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
|
Actuarial gains (losses) resulting
from changes in demographic
assumptions
|
0.2
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.2
|
0.0
|
|
Actuarial gains (losses) resulting
from changes in financial as-
sumptions
|
-23.9
|
42.1
|
-2.9
|
5.9
|
0.0
|
1.8
|
-0.2
|
1.7
|
-27.0
|
51.6
|
|
Gains (losses) resulting from ex-
perience
|
-2.2
|
-3.0
|
0.8
|
0.2
|
0.0
|
-0.7
|
0.1
|
-0.4
|
-1.3
|
-4.0
|
|
Actuarial gains (losses) from plan
assets
|
12.3
|
-36.4
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
-0.1
|
12.3
|
-36.5
|
|
Asset ceiling
|
8.8
|
0.3
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
8.9
|
0.3
|
|
Total change
|
-4.7
|
3.0
|
-2.1
|
6.1
|
-0.1
|
1.1
|
0.0
|
1.1
|
-6.9
|
11.4
|
|
END OF THE PERIOD
|
-22.7
|
-17.9
|
-6.1
|
-4.0
|
-2.9
|
-2.7
|
-1.5
|
-1.5
|
-33.1
|
-26.2
|
|
Plan assets structure
|
||||||||||
|
Shares
|
23.9%
|
6.5%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
23.9%
|
6.5%
|
|
Securities
|
59.5%
|
14.4%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
59.5%
|
14.4%
|
|
Cash
|
1.7%
|
0.3%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
1.7%
|
0.3%
|
|
Other assets
|
15.0%
|
78.8%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
15.0%
|
78.8%
|
|
END OF THE PERIOD
|
100.0%
|
100.0%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
100.0%
|
100.0%
|
|
Assumptions used
|
||||||||||
|
Discount rate
|
1.3%
|
2.2%
|
3.5%
|
3.9%
|
3.1%
|
3.3%
|
6.4%
|
6.1%
|
||
|
Inflation rate
|
2.0%
|
2.0%
|
1.5%
|
1.5%
|
2.0%
|
3.4%
|
3.0%
|
3.0%
|
||
|
Future salary rises
|
2.0%
|
2.0%
|
2.0%
|
2.0%
|
3.0%
|
1.0%
|
4.5%
|
4.7%
|
||
|
Future pension rises
|
0.0%
|
0.0%
|
1.5%
|
1.5%
|
3.0%
|
4.1%
|
1.5%
|
2.5%
|
195
The liability recognised under the “Provision for employee benefits”, at 31 December 2023, stood at € 87.2 million, out
of which € 84.5 million was unfunded, with an increase of € 48.6 million compared with the net liability of € 38.6 million
at 31 December 2022.
A quantitative sensitivity analysis of the significant assumptions used at 31 December 2023 is provided below. Specifically,
it shows the effects on the final net obligation arising from a positive or negative percentage change in the key assumption
used.
Switzerland
Germany
Italy
Other
Total
+0.5%
-0.5%
+0.5%
-0.5%
+0.5%
-0.5%
+0.5%
-0.5%
+0.5%
-0.5%
Discount rate
-6.2%
7.0%
-5.7%
6.3%
-3.2%
3.4%
-2.8%
3.0%
-5.8%
6.5%
Future salary
0.9%
-0.9%
0.2%
-0.2%
0.0%
0.0%
0.5%
-0.5%
0.7%
-0.7%
Future pension
3.8%
0.0%
4.8%
-4.5%
0.0%
0.0%
0.0%
0.0%
3.7%
-1.0%
Future inflation rate
0.0%
0.0%
3.5%
-3.2%
1.9%
-1.9%
0.0%
0.0%
0.8%
-0.8%
The sensitivity analysis shown above is based on a method involving extrapolation of the impact on the net obligation for
defined benefit plans of reasonable changes to the key assumptions made at the end of the financial year.
The following payments are the expected contributions that will be made in future years to provide for the obligations of
the defined benefit plans.
Switzerland
Germany
Italy
Other
Total
Within 12 months
-11.9
-5.0
-0.9
-0.5
-18.4
From 1 to 5 years
-65.3
-18.3
-3.5
-2.7
-89.8
From 5 to 10 years
-68.7
-17.8
-6.3
-6.3
-99.0
Total
-145.9
-41.1
-10.7
-9.6
-207.2
Average plan duration (years)
12.9
9.8
7.9
12.9
10.9
As at 31 December 2023, “Non-current financing and current loans” amounted to € 988.8 million versus € 897.8 million
in the previous year, and was as follows:
31.12.2023
31.12.2022
< 1 year
< 5 years
> 5 years
Total
< 1 year
< 5 years
> 5 years
Total
Fair value of Current and
Non-current Financing
46.7
492.3
449.8
988.8
32.7
704.9
160.2
897.8
“Current financing” for loans was up € 14.0 million on the previous year; this is essentially attributable to the normal
amortisation plan of medium/long-term debt. Meanwhile “Non-current financing” compared to 31 December 2022 was
up € 77.0 million mainly due to new financing taken out in 2023.
In accordance with IFRS 16, below are the carrying amounts of financial liabilities arising from right-of-use assets broken
down by maturity at 31 December 2023:
|
Expiry dates 31.12.2023
(in € million)
|
0-12 months
|
2-5 years
|
>5 years
|
Total
|
|
Financial payables
|
||||
|
- non-current loans
|
51.8
|
11.3
|
63.1
|
|
|
- current loans
|
25.1
|
25.1
|
||
|
Financial payables
|
25.1
|
51.8
|
11.3
|
88.2
|
196
Net financial indebtedness
The reconciliation with the Net Financial Indebtedness adjusted is set out below.
2023
2022
Net Financial Indebtedness
(€ million)
A
Cash
451.2
999.2
B
Cash equivalents including the current financial assets
0.0
0.1
C
Other current financial assets
10.1
12.3
D
Liquidity (A+B+C)
461.3
1,011.6
E
Current financial liabilities
-75.7
-53.5
F
Current portion of non-current financial liabilities
-46.7
-32.7
G
Current Financial Indebtedness (E+F)
-122.5
-86.2
H
Net Current Financial Indebtedness (G-D)
338.9
925.4
I
Non-current financial liabilities
-942.1
-865.2
J
Non-current financing (Debt instruments)
0.0
0.0
K
Non-current Trade and Other Payables
-7.7
0.0
L
Non-Current Financial Indebtedness (I+J+K)
-949.8
-865.2
M
Net Financial Indebtedness (H+L) (*)
-610.9
60.2
N
Group Net Financial Indebtedness
-575.0
98.9
O
∆ M-N
-35.9
-38.6
(*) ESMA 32-382-1138 guideline
In preparing the statement of Net Financial Indebtedness, which is a non-IFRS measure, the Group considered the provi-
sions set out in Consob Communication DEM/6064293 of 28 July 2006 and the ESMA Guidelines issued in May 2022, with
the exception that it included non-current financial assets consisting of financial receivables and excluded outstanding
debts associated with purchases of equity interest and positive MTM on derivatives.
At 31 December 2023, the Group recorded a negative Net Financial Indebtedness adjusted of € -575.0 million compared
with the positive balance of € 98.9 million at 31 December 2022.
A reconciliation of the changes in financial assets and liabilities used in financing activities indicated in the cash flow
statement and the balances shown on the financial statements is provided below:
Non-current
financing
Current
financial
liabilities
Current loans
Current
financial
assets
Total Net
impact
31.12.2022
865.2
49.7
32.7
-47.1
900.4
Increase/decrease in
short-term
financial payables (1)
0.0
15.1
3.9
-4.5
14.5
New loans (1)
388.6
0.0
0.0
0.0
388.6
Loans repayment (1)
-444.7
0.0
0.0
0.0
-444.7
New lease contracts
37.6
0.0
0.0
0.0
37.6
Reclassification
-5.2
0.0
5.2
0.0
-0.0
Exchange rate effects
-0.5
-1.9
0.1
0.2
-2.1
Perimeter variation
101.2
2.1
4.9
-1.0
107.3
Net variation positive
MTM
0.0
0.0
0.0
17.7
17.7
Other movements
0.0
7.6
-0.1
-0.4
7.1
31.12.2023
942.1
72.5
46.7
-35.1
1,026.2
(1): Included in the Cash flow Statement.
“Other non-current liabilities” amounted to € 20.5 million versus € 12.0 million in the previous year. These liabilities are
represented primarily by debts to be extinguished beyond the year and non-current contract liabilities. For the disclosure
about contract liabilities, refer to ‘Note 3.13 – Other current liabilities’.
“Other non-current liabilities” largely reflected the fair value of the debt resulting from the measurement of the individual
obligations associated with Put and Call options on non-controlling interests in the recently acquired entities, primarily
the newly Put and Call option agreement signed in May 2023 for the acquisition of the remaining 49% of the shares of
the subsidiary Chromagen Australia. The option as at December 2023 is equal to € 6.7 million and will expire in 2026.
“Non-current tax liabilities” amounted to € 3.9 million as 31 December 2023 up by € 2.1 million compared to the amount
as at 31 December 2022. The increase was mainly due to the Tax claim regarding Ariston France.
“Trade payables” at 31 December 2023 amounted to € 463.7 million, showing a decrease of € 17.7 million, compared
with 31 December 2022. They are not subject to interest and their carrying value is believed to be close to the fair value
at the end of the reporting period.
Trade payables in terms of the average number of days for payment, amounted to 91.0 days in 2023 and 97.6 days in
2022. The decrease of the DPO is due to the perimeter variation of Wolf-Brink.
The reduction of trade payables is linked to careful management of procurement contracts and relevant terms and con-
ditions.
“Tax payables” amounted to € 83.9 million versus € 53.0 million in 2022.
Tax payables
31.12.2023
31.12.2022
(in € million)
Income tax payables
54.6
30.5
Tax payables due to Parent company
17.5
13.6
Other tax payables
11.8
8.8
Total
83.9
53.0
This item includes the income tax payables related to Italian and foreign companies. The increase in tax payables in 2023
is mainly reflected in the perimeter variation equal to € 29.4 million.
Ariston Holding N.V. is incorporated in the Netherlands but is a tax resident of Italy and is controlled by Merloni Holding
S.p.A.. Ariston Holding N.V. and its Italian subsidiaries have adopted the national tax consolidation scheme. At 31 Decem-
ber 2023, the individual Italian companies' income tax receivables and payables were recorded from or to, respectively,
Merloni Holding S.p.A.. These amounts are included in the “Tax payables” due to the controlling shareholder for tax
consolidation.
Note 3.10 – Current provisions
This item amounts to € 68.9 million and is described in ‘Note 3.3 - Non-current provisions for risks and charges’, to which
reference should be made.
As at 31 December 2023, “Current financial liabilities” amounted to € 72.5 million versus € 49.7 million in the previous
year.
Liabilities are as follows:
Current financial liabilities
31.12.2023
31.12.2022
(in € million)
Financial derivative liabilities
23.9
10.5
Short-term debt due to bank
18.1
21.6
Financial notes payable
13.5
13.2
Other current financial liabilities
17.0
4.4
Total
72.5
49.7
As at 31 December 2023, “Financial derivative liabilities” amounted to € 23.9 million and included the negative fair value
and derivatives closed but not paid yet of financial derivative instruments.
The fair value of financial derivatives included hedges on foreign exchange for € 9.7 million (€ 3.5 million as at 31 Decem-
ber 2022), on interest rates for € 8.5 (€0 million as at 31 December 2022), and on commodities for € 0.9 million (€ 1.3
million as at 31 December 2022).
The negative accruals to financial derivatives closed but not yet paid at the reporting date amounted to € 4.9 million.
The change in commodity, foreign exchange and interest rate hedges was offset by the change in the underlying hedged
items. The fair value measurement of the derivative instruments has a direct contra-entry in the equity reserve related
to the cash flow hedge for a total of € 24.4 million. For a more detailed explanation of hedging instruments, see the
section on the instruments for financial risk management.
Short-term debt due to banks showed a € 3.5 million decrease as result of a lower draw-down of short-term lines.
Short-term uncommitted credit lines amounted to approximately € 423.8 million and consisted almost entirely of current
account credit lines and advances utilised as at 31 December 2023 for € 51.8 million (€ 49.0 million as at 31 December
2022).
“Financial notes payable” amounted to € 13.5 million (€13.2 million as at 31 December 2022) and consisted of short-
term debt for bank notes or similar tradable instruments issued, held by subsidiaries in China, and used in commercial
transactions with customers and suppliers in order to settle supply agreements.
The item “Other current financial liabilities” amounted to € 17.0 million (€ 4.4 million as at 31 December 2022) and mainly
consisted of interest accrual on medium/long-term loans.
Note 3.12 – Current loans
The balance of “Current loans” amounted to € 46.7 million versus € 32.7 million at 31 December 2022.
The item consists primarily of the short-term portion of medium/long-term bank loans, the details of which are attached
to ‘Note 3.5 - Non-current financing and current loans’
.
“Other current liabilities” amounted to € 288.2 million, up by € 113.6 million on € 174.5 million at 31 December 2022.
Other current liabilities
31.12.2023
31.12.2022
(in € million)
Current payables due to personnel
73.9
51.7
Contract liabilities
67.2
41.9
Customers credit balance
60.1
13.1
Indirect tax payables
38.3
29.2
Current payables for social security contributions
22.3
19.1
Advances from customers
10.5
5.6
Deferred income
8.1
4.8
Short-Term put/call debts
3.2
3.8
Long-Term employees incentive scheme (current)
0.2
0.3
State Green Programmes - Other payables
0.1
0.0
Other current payables
4.2
5.1
Total
288.2
174.5
In accordance with IFRS 15, performance obligations to customers at contract level are presented as contract liabilities.
Contract liabilities include:
•
Rights of Return
•
After-sales service, which include Service maintenance contracts and Service type warranties
•
Loyalty program
31.12.2023
31.12.2022
Up to 1
year
From 1 to 5
years
Over 5
years
To-
tal
Up to 1
year
From 1 to 5
years
Over 5
years
To-
tal
Right of returns
2.5
0.0
0.0
2.5
2.7
0.0
0.0
2.7
After-sales services
47.0
4.2
7.2
58.3
39.1
3.7
7.8
50.6
Loyalty program
17.8
0.0
0.0
17.8
0.0
0.0
0.0
0.0
Total
67.2
4.2
7.2
78.6
41.9
3.7
7.8
53.4
The table below presents the opening and closing balances of contract liabilities as well as movements during the years:
Right of returns
After-sales services
Loyalty program
Total
Opening Balance 01.01.2023
2.7
50.6
0.0
53.4
Perimeter variation
0.0
0.0
11.8
11.8
Increase recognised
0.0
109.2
18.8
128.0
Revenue recognised
0.0
-99.3
-8.6
-107.9
Contracts cancelled
0.0
-3.9
0.0
-3.9
Net variation invoicing
0.0
-0.8
0.0
-0.8
Pay out
0.0
0.0
-5.0
-5.0
Other changes to contract balances
-0.3
2.5
0.8
3.0
Closing balance 31.12.2023
2.5
58.3
17.8
78.6
“Current payables due to personnel” include the amounts accrued by personnel and not yet disbursed. The increase is
mainly related to the perimeter variation that was equal to € 24.4 million at 31 December 2023.
The item “Indirect tax payables” includes the VAT payables due to tax authorities. The € 9.1 million increase was linked
to the business and the acquisition of Wolf-Brink.
200
“Current payables for social security contributions” included all relationships that the company is required to maintain
with social security and insurance entities for its employees and workers with atypical contracts (
parasubordinati
). It was
up by € 3.2 million compared with 31 December 2022.
The item “Advances from customers” shows all advances received from customers for supplies not yet delivered. It was
up by € 4.9 million compared to 31 December 2022.
“Deferred income” included adjustments of costs and revenues for the year in order to comply with the competence
principle and the accrual principle (accruals and deferred income, also relating to financial liabilities).
The “Short-term put/call debts” arises from purchase agreements that are to be settled in the near future. The item
showed a decrease, discussed below, of € 0.6 million. The balance as at 31 December 2023 includes the liability for the
Put and Call on HAAS B.V. and the Chromagen Group.
Note 3.14 – Liabilities held for sale
There are no “Liabilities held for sale”.
6.6.4
Other disclosures
COMMITMENTS
Commitments
The commitments outstanding at 31 December 2023, equal to € 0.1 million, referred to the equivalent value of the pay-
ments (USD 0.1 million) of additional shares in an ''Investment company in risk capital (SICAR) provision'' specializing in
interventions in sectors in which the Group operates, to be carried out when they are called up by the fund managers for
the commitment established.
At 31 December 2023, there were no other commitments to be mentioned except for the ones concerning the call and
put options entered into as part of the recent acquisitions and already accounted for as “Other liabilities”.
The sureties issued in favour of third parties amounted to € 0.6 million.
Third-party assets in deposit accounts amounted to € 13.5 million.
Below are the Group's financial instruments recognised by category and the level of confidence of their fair value meas-
urements at 31 December 2023:
31.12.2023
(in € million)
Note
Carrying value per type
Fair value
Fin. instr.
at
fair value
through
P&L
Fin. instr.
at
fair value
through OCI
Loans & re-
ceivables
Fin.
liabili-
ties at
amortised
cost
Total
Level 1
Level 2
Level 3
Total
Measured at :
Fair value
Fair value
Amortised
cost
Amortised
cost
Financial assets
Cash and cash equiva-
lents
2.13
0.0
0.0
451.2
0.0
451.2
0.0
0.0
0.0
0.0
Trade receivables
2.9
0.0
0.0
361.3
0.0
361.3
0.0
0.0
0.0
0.0
Current financial assets
2.11
0.0
17.1
18.0
0.0
35.1
0.0
17.1
0.0
17.1
Financial assets
2.5
2.4
1.1
0.8
0.0
4.4
0.0
0.0
3.6
3.6
Total
2.4
18.2
831.3
0.0
852.0
0.0
17.1
3.6
20.7
Financial liabilities
Trade payables
3.8
0.0
0.0
0.0
459.2
459.2
0.0
0.0
0.0
0.0
Current financial liabili-
ties
3.11
0.0
19.1
0.0
53.4
72.5
0.0
19.1
0.0
19.1
Current loans
3.12
0.0
0.0
0.0
46.7
46.7
0.0
0.0
0.0
0.0
Non-current financing
3.5
0.0
0.0
0.0
942.1
942.1
0.0
0.0
0.0
0.0
Total
0.0
19.1
0.0
1,501.4
1,520.5
0.0
19.1
0.0
19.1
Financial instruments bal-
ance
2.4
-0.9
831.3
-1,501.4
-668.5
0.0
-2.0
3.6
1.6
(*)
For such categories the carrying amount approximates the fair value
The financial instruments of the Group, recognised in the financial statements with a similar breakdown at 31 December
2022, are shown in the table below:
31.12.2022
(in € million)
Note
Carrying value per type
Fair value
Fin. instr.
at
fair value
through P&L
Fin. instr.
at
fair value
through OCI
Loans & re-
ceivables
Fin.
liabilities
at
amortised
cost
Total
Level 1
Level 2
Level 3
Total
Measured at :
Fair value
Fair value
Amortised
cost
Amortised
cost
Financial assets
Cash and cash equiva-
lents
2.13
0.0
0.0
999.3
0.0
999.3
0.0
0.0
0.0
0.0
Trade receivables
2.9
0.0
0.0
308.4
0.0
308.4
0.0
0.0
0.0
0.0
Current financial assets
2.11
0.0
34.8
10.2
2.0
47.1
0.0
34.8
0.0
34.8
Financial assets
2.5
4.0
1.1
1.0
0.0
6.1
0.0
0.0
5.1
5.1
Total
4.0
35.9
1,318.9
2.0
1,360.8
0.0
34.8
5.1
39.9
Financial liabilities
Trade payables
3.8
0.0
0.0
0.0
481.4
481.4
0.0
0.0
0.0
0.0
Current financial liabili-
ties
3.11
0.0
4.8
0.0
44.8
49.7
0.0
4.8
0.0
4.8
Current loans
3.12
0.0
0.0
0.0
32.7
32.7
0.0
0.0
0.0
0.0
Non
-
current financing
3.5
0.0
0.0
0.0
865.2
865.2
0.0
0.0
0.0
0.0
Total
0.0
4.8
0.0
1,424.0
1,428.8
0.0
4.8
0.0
4.8
Financial instruments
balance
4.0
31.1
1,318.9
-1,422.0
-68.0
0.0
30.0
5.1
35.0
(*) For such categories the carrying amount approximates the fair value
Notes:
Level 1: listed prices on an active market for the asset or liability being measured.
Level 2: inputs other than listed prices included within Level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived
from prices).
Level 3: unobservable inputs for the asset or liability.
As the above table shows, at the reporting date, there were no differences between the carrying amounts of financial
instruments and the corresponding fair value. In particular, among the non-current financial assets, obligations are mainly
stated at fair value.
203
Current and non-current loans are at both fixed and floating rates and are recognised at their amortised cost.
As already described in ‘Note 3.11 – Current financial liabilities’ and in ‘Note 2.11 – Current financial assets’ of these
notes, current financial assets/liabilities include the fair value, at the end of the reporting period, of the derivative finan-
cial instruments used to hedge the purchase of commodities (negative for € 0.7 million), exchange rates (negative for €
9.3 million) and interest rates (positive for € 8.0 million).
For details on these transactions, see the section “Hedging instruments”.
The Group is exposed to operations with related financial risks, including credit risk, liquidity risk and market risk, and
constantly monitors them.
The following section provides qualitative and quantitative information about the impact of these risks on the Group.
Financial instruments at fair value through OCI include the fair value of derivatives mainly on interest rates, exchange
rates and commodities for which the Group has applied ‘Cash flow hedging’ (IFRS 9 - Hedge Accounting).
Credit risk is the Group’s exposure to potential losses from failure by commercial counterparties to fulfil obligations they
have entered into. Failure to collect or late collection of trade receivables could impact negatively on the Group’s eco-
nomic results and financial equilibrium.
The Group’s policy for managing credit risk from commercial activities envisages the preliminary assessment of counter-
parties’ creditworthiness, the management of credit limits and the adoption of risk mitigation instruments, such as the
acquisition of bank guarantees, letters of credit and the external transfer of part of the insolvency risk through a global
program of credit insurance.
The portion of secured receivables, at 31 December 2023, was 63.7% of the total exposure.
In order to mitigate credit risk, the Group has also adopted a policy which defines the strategic guidelines and operating
rules for an effective system to control each company’s credit.
In addition, the policy defines the means for estimating expected losses, in accordance with the means set out hereafter
and taking account of the mitigating factor represented by the aforementioned instruments for insured credit.
In accordance with IFRS9 and the impairment requirement based on Expected Credit Losses (“ECL”), the Group applies,
for trade receivables, the simplified approach using a provision matrix.
In particular, the Group applies a new Policy based on the division of trade receivables into clusters on the basis of type
(ordinary/legal), ageing (past-due ranges) and country rating and applying the relevant historical loss rates to the balance
outstanding and then adjusting for forward-looking factors determined by the counterparty Probability of Default (PD) at
one year obtained from external resources. The policy is applied to the Group perimeter excluding the new acquisitions
for which the extension is planned to start from the following year.
As regards the write-off criteria, these are clearly based on the specific statutory and tax rules in force in the various
countries where the Group companies are present.
The maximum exposure to risk, net of guarantees, at 31 December 2023 was € 131.1 million. The Group has not identified
any concentration risk on customers and on its trade receivables as the Group has a very diversified customer risk port-
folio without any significant increase in a risky customer share. The Group seeks to mitigate the credit risk by depositing
its liquidity in leading bank and corporate counterparties selected according to their credit quality. All receivables on book
have a credit risk rating minimum.
The table below summarises the types of instruments protecting against credit risk used by the Group:
Type
(in € million)
31.12.2023
%
31.12.2022
%
Receivables under insurance policies
211.5
58.5%
192.4
62.4%
Other financial means of securing
18.7
5.2%
5.7
1.9%
Total secured receivables
230.2
63.7%
198.1
64.2%
Non-secured receivables
131.1
36.3%
110.3
35.8%
Total receivables
361.3
100.0%
308.4
100.0%
“Other” mainly includes receivables insured through letters of credit and bank guarantees and different methods of cov-
ering the default risk though a system introduced by the acquisition of Wolf-Brink called the Central Payment Regulator
System.
The instrument used for the classification and monitoring of credit is ageing, according to which the accounts receivables
are divided by their expiry dates, starting from the most recent (1-30 days) to the oldest (beyond 120 days).
The amount of receivables past-due within 60 days is € 24.3 million (versus € 26.0 million at December 2022) whereas
the amount of receivables past-due beyond 60 days is € 20.2 million (versus € 16.2 million at December 2022).
For the purposes of representing trade receivables for issued invoices by past-due ranges, the following table is provided:
205
Overdue ageing
(in € million)
31.12.2023
%
31.12.2022
%
Overdue 0-30
17.6
4.9%
19.3
6.3%
Overdue 31-60
6.7
1.9%
6.7
2.2%
Overdue 61-120
7.9
2.2%
3.9
1.2%
Due after 120 and legal
12.3
3.4%
12.3
4.0%
The credit policy defines the depreciation grid for the statistical part, differentiating percentages by ageing and country
risk class where the trade receivable amount is allocated.
The current (not overdue) receivables amounted to € 316.8 million. Also these amounts are allocated to their country
risk class and subject to depreciation according to the assigned devaluation percentage. The related provision for bad
debt amounted to € 5.4 million.
Companies with a credit insurance contract, as well as credits covered by other forms of guarantee, are not subject to
impairment up to overdue below 180 days, while over 180 days the percentages remain the same.
As at 31 December 2023 there is no significant financing component identified for trade receivables.
The allocation for the provision is made on the basis of both analytical and generic assessments, as set out below:
Specific write-off: the receivables in litigation or past-due for longer than one year or transferred to an external collection
agency are subject to a specific impairment loss according to the progress of their recovery and the information provided
by the attorneys.
Simplified IFRS 9 model: for receivables that are past-due within the year, assessments are applied based on historical
loss rates in relation to the ageing of receivables and the risk grade of each individual country, adjusting them through a
forward-looking component identified as Probability of Default of the single counterparty at one year. Here below are
the percentages used for the simplified IFRS 9 (ECL).
Trade receivables ageing
Country risk A
Country risk B
Country risk C
Country risk D
Overdue > 360 days
54.3%
73.9%
66.6%
49.0%
Overdue 271- 360
39.6%
59.8%
36.5%
25.3%
Overdue 181- 270
24.6%
38.5%
18.5%
19.2%
Overdue 121-180
14.1%
22.9%
8.4%
11.8%
Overdue 91-120
9.4%
14.6%
3.4%
8.5%
Overdue 61-90
5.2%
8.3%
1.5%
4.4%
Overdue 31-60
2.0%
3.1%
0.6%
1.8%
Overdue 0-30
0.4%
0.5%
0.2%
0.4%
Current (not overdue)
0.1%
0.1%
0.1%
0.2%
The Group has established an internal model for defining country-risk classes. The model starts from OECD and Coface
country rating, adjusting them according to Ariston companies past credit experience in performances, business relations
and control of the market. This allows to classify all the countries where Ariston group operates in 4 risk categories from
A (low risk) to D (high risk) which result in the application of different impairment measures according to the level of risk
assigned.
206
Following is the summary of the specific and simplified ECLs assessments used to determine the bad debt provision:
Analysis of bad debt provision
31.12.2023
31.12.2022
Total receivables
Gross
382.5
325.4
Provision
21.2
17.0
Net
361.3
308.4
Receivables impaired on a specific basis
Gross
4.2
5.2
Provision
4.1
4.7
Net
0.1
0.5
Receivables impaired on a simplified ECLs
Gross
378.3
320.2
Provision
17.1
12.3
Net
361.2
307.9
As at 31 December 2023, the Group’s “Overall available liquidity”, defined as the sum of cash and cash equivalents and
the unused portion of committed credit lines (equal to € 895 million at December month-end) amounted to approxi-
mately € 1,346 million.
As of 31 December 2023, the Group's overall bank credit lines, including the used and unused credit lines (both committed
and uncommitted) totalled approximately €2.2 billion, of which approximately 43% was drawn.
Cash generated from operations and bank financing are the primary sources of liquidity.
The Group periodically assesses its financial needs, in order to act promptly and implement the necessary actions to find
additional resources when needed. The Group seeks to maintain an adequate mix of resources in terms of maturities,
financial instruments and available amounts.
The following table shows the contractual expiry dates for the financial liabilities other than derivatives. These figures are
based on non-discounted cash flows, including financial charges, as at the next closest date when the Group may be asked
for the payment.
|
Expiry dates 2023
(in € million)
|
< 1 month
|
2-6 months
|
6-12 months
|
1-5 years
|
> 5 years
|
Total
|
|
Trade payables
|
146.2
|
313.4
|
3.6
|
0.5
|
463.7
|
|
|
Financial payables
|
||||||
|
-
Current financial liabilities
|
6.0
|
50.5
|
16.6
|
73.1
|
||
|
-
Current loans
|
46.6
|
46.6
|
||||
|
-
Non-current financial liabilities
|
0.0
|
|||||
|
-
Non-current loans
|
10.0
|
6.7
|
15.1
|
592.9
|
475.6
|
1,100.3
|
|
Total financial payables
|
16.0
|
57.2
|
78.3
|
592.9
|
475.6
|
1,220.0
|
|
Expiry dates
|
162.2
|
370.6
|
81.9
|
593.4
|
475.6
|
1,683.7
|
The details for the expiry dates of financial and trade payables as at 31 December 2022 are shown in the table below:
|
Expiry dates 2022
(in € million)
|
< 1 month
|
2-6 months
|
6-12 months
|
1-5 years
|
> 5 years
|
Total
|
|
Trade payables
|
121.1
|
359.9
|
0.0
|
0.4
|
481.4
|
|
|
Financial payables
|
||||||
|
-
Current financial liabilities
|
10.7
|
18.0
|
20.9
|
49.7
|
||
|
-
Current loans
|
4.1
|
28.6
|
32.7
|
|||
|
-
Non-current financial liabilities
|
0.0
|
|||||
|
-
Non-current loans
|
5.4
|
5.0
|
736.4
|
169.9
|
916.7
|
|
|
Total financial payables
|
10.7
|
27.5
|
54.5
|
736.4
|
169.9
|
999.1
|
|
Expiry dates
|
131.8
|
387.4
|
54.5
|
736.8
|
169.9
|
1,480.5
|
207
The Group is exposed to several market risks and, in particular, to the possibility that fluctuation in exchange rates, inter-
est rates and commodity prices may affect the value of assets, liabilities and the expected cash flows.
The market risk management policies applied to interest rates, exchange rates and commodities, are centrally defined to
mitigate the above risks in a structured and proactive manner in the advancement of the Group's objectives.
The three types of market risk can be characterised as described here below.
The international context where the Group operates exposes the Group to the risk that changes in exchange rates may
affect its financial results.
The exposure to exchange rate risk determines:
a)
impacts on the operating result due to the different valuation of income and expense in another currency compared
to the time when the price conditions were agreed upon (economic risk);
b)
impacts on the operating result due to the translation of trade or financial receivables/payables denominated in
another currency (transaction risk);
c)
impacts on the consolidated financial statements due to the translation of assets and liabilities held by companies
that prepare their financial statements in a currency other than the euro (translation risk).
The most significant exposure in other currencies of the Group concerns the exchange rate of the euro against the US
dollar, Chinese renminbi, Swiss franc and several other currencies for lower amounts.
The economic risk is hedged through average rate forward financial instruments, i.e. hedging agreements against the
volatility that characterises the currency markets, using as a reference the monthly average exchange rates, and that
allow the Group to achieve the goals set out in its market risk management policy. In order to pursue these goals, the
Group put into derivatives hedging a set proportion of net exposure in currencies other than the Group's currency. At
each reporting date, the exposure is presented in the financial statements using hedge accounting, which requires rec-
ognising derivatives at their fair value in the statement of financial position. The Group considered it possible to use hedge
accounting since the hedging relationship is effective in accordance with IFRS 9.
In order to minimise the exposure to the transaction risk, the Group uses derivative forward instruments which allow for
protection against revaluations/write-downs at the due date of the credit and debit positions of a financial and commer-
cial nature.
The Group does not hedge the translation risk except for any distribution of intergroup dividends.
At the reporting date, the notional amount of forward currency contracts (sale and purchase) entered into by the Group,
can be summarised as follows:
(in € million)
Notional amount in
Currency
Notional amount in €
CHF
150.3
162.3
GBP
14.3
16.4
CNY
367.7
46.8
USD
12.5
11.3
At the same date, the fair value of the foreign exchange derivatives was overall negative, standing at € 9.2 million.
In relation to exchange rate risk, the Group performed sensitivity analysis to measure how exchange rate fluctuations
against the euro may affect pre-tax profitability. The sensitivity analysis was performed on the currencies to which the
Group is exposed. The hypothesised scenario envisages a general variation in exchange rates of 2% and the following
table shows the sensitivity, while keeping all the other variables fixed, in terms of the profit before tax and equity, gross
of the tax effect. The biggest exposures are CHF and CNY, in the sensitivity analysis the two exposures tend to offset each
other as they are in the opposite side.
208
(in € million)
Effect on profit
before tax
Effect on equity
31.12.2023
Foreign currency revaluation
1.1
1.1
Foreign currency devaluation
-1.1
-1.1
Profit and loss are affected by the performance of the prices of raw materials, in particular as regards non-ferrous metals
such as copper, nickel and aluminium, as well as precious metals like silver, which represent one of the primary compo-
nents of the majority of products traded by the Group.
For hedging purposes against the risk of fluctuating prices for copper, silver and nickel, the Group provided, through the
parent company Ariston Holding N.V., for the necessary hedging measures in line with the procedures already adopted
in the previous years aimed at reducing the impact of price volatility in purchases over coming years.
Thus, the Group partly hedged purchases also for the years 2024, 2025 and 2026.
In order to achieve the goals set out in the market risk management policy, the Group entered into derivatives, hedging
a set proportion of raw material purchases. At each reporting date, the exposure is presented in the financial statements
using hedge accounting, which requires recognising derivatives at their fair value in the statement of financial position.
The Group considered it possible to use hedge accounting since the hedging relationship is effective in accordance with
IFRS 9.
When these instruments no longer qualify for hedge accounting, they are recognised as trading instruments.
At the reporting date, the notional amount of forward commodity contracts entered into by the Group, can be summa-
rised as follows:
Commodity
Financial
instruments
Quantity/ton
Total price
(in € million)
Copper
Forward
1,680.0
13.2
Nickel
Average Forward
46.0
0.9
Silver
Average Forward
2.6
1.8
Aluminium
Forward
1,175.0
2.9
At the same date, the fair value measurement of the derivatives on commodities showed a net negative amount of € 0.7
million.
Derivatives contracts entered into and closed during the year realised a negative result amounting to approximately € 0.2
million which impacted the purchase cost of commodities.
Interest rate risk refers to the possible impact on the income statement deriving from fluctuations in the interest rates
applied to the Group’s loans.
The amount of the Group’s variable rate debt exposure, not hedged against interest rate risk, represents the main ele-
ment of risk for the negative impact from an increase in market interest rates. The interest rate risk to which the Group
is exposed originates primarily from bank financing.
The Group's policy for managing this risk seeks to strike a balance between fixed and variable rate debts, taking into
account the maturity profile, the short-term market outlook, with the purpose of containing funding costs.
As at 31 December 2023, the Group had, for hedging purposes, interest rate swap (IRS) transactions for a total notional
amount of € 535.5 million.
At the same date, 64% of bank financing was hedged or fixed and 36% was at a variable rate, consistent with the Group
policy.
The sensitivity analysis of interest rate risk is conducted under the delta margin approach and is aimed at measuring how
a given change in interest rates would affect financial expense associated with variable rate debt over the next 12 months.
209
The sensitivity of the interest rate spread, assuming a generalised +/- 50 basis point change in interest rates, amounted
to € +1.5 million and € -1.5 million, respectively, at the end of December 2023.
In summary, at 31 December 2023, the following financial hedging instruments are in place:
•
against exchange rates – Swiss franc, British pound sterling, US dollar and Chinese renminbi with maturities up to 2
years;
•
against commodities – copper, nickel, silver, aluminium and steel with maturities up to 3 years;
•
against interest rates – medium/long-term floating rate loans with maturities up to 8 years.
The hedging instruments applied to exchange rates were set up in order to reduce the Group’s economic and transac-
tional risk, and they meet all the formal requirements set out in the IAS/IFRSs and are therefore recognised in hedge
accounting.
The following table shows the details of hedging instruments in use as at 31 December 2023. The high volatility on IRS
price curve in 2023 generated the biggest change in values compared to the previous years. The amounts are expressed
in millions of euro:
Hedging instruments
31.12.2023
(in € million)
Nature of
risk
covered
Fair value
31.12.2023
Non-current
financial
assets
Current
financial
assets
Non-cur-
rent finan-
cial liabili-
ties
Current fi-
nancial
liabilities
Total
Interest Rate Swap
Interest
rate
8.0
-
16.5
-
-8.5
8.0
Average Forward
FX
-9.3
-
0.4
-9.7
-9.3
Forward
Commodity
-0.5
-
0.2
-
-0.7
-0.5
Average Forward
Commodity
-0.2
-
-
-
-0.2
-0.2
Hedging instruments
-2.0
-
17.1
-
-19.1
-2.0
The following table shows the details of hedging instruments in use as at 31 December 2023. The amounts are expressed
in millions of euro:
Hedging instruments
31.12.2022
(in € million)
Nature of risk
covered
Fair value
31.12.2022
Non-current
financial
assets
Current
financial
assets
Non-cur-
rent
financial
liabilities
Current fi-
nancial li-
abilities
Total
Interest Rate Swap
Interest rate
32.5
32.5
32.5
Average Forward
FX
-2.0
1.5
-3.5
-2.0
Forward
Commodity
-1.1
0.2
-1.3
-1.1
Average Forward
Commodity
0.5
0.5
0.0
0.5
Hedging instruments
30.0
34.8
-4.8
30.0
At 31 December 2023 Ariston Holding N.V., controlled by Merloni Holding S.p.A., and its Italian subsidiaries, adopted the
national tax consolidation scheme. At 31 December 2023, the income tax receivables and payables of the individual Italian
companies were recorded from or to, respectively, Merloni Holding S.p.A. At 31 December 2023, the Company and its
Italian subsidiaries had a payable position from Merloni Holding S.p.A. for € 11.7 million. All tax receivables and payables
are non-interest-bearing.
All transactions with related parties were carried out in the Group’s interest.
Based on the transactions carried out by the Ariston Group during 2023, related parties are mainly represented by:
•
companies directly and/or indirectly related to the majority shareholder of Ariston Holding N.V.;
•
directors and/or companies related to the same.
The following table shows the figures of the main transactions with related parties:
31.12.2023
31.12.2022
(in € million)
Receivables
Payables
Revenue
Costs
Receivables
Payables
Revenue
Costs
Merloni Holding S.p.A.
16.4
28.1
0.1
0.1
7.2
13.8
0.1
0.1
Novapower S.r.l.
0.0
0.2
0.0
0.3
0.0
0.3
0.0
0.3
Fondazione A. Merloni
0.0
0.0
0.0
0.5
0.0
0.0
0.0
0.5
Nova Re S.r.l.
0.0
0.1
0.0
0.3
0.0
0.3
0.0
0.2
Novacapital S.r.l.
0.1
0.0
0.1
0.0
0.1
0.2
0.1
0.2
Centrotec Building Technology
0.1
1.7
0.3
5.0
n/a
n/a
n/a
n/a
Centrotec Immobilien GmbH
0.0
0.0
0.0
0.1
n/a
n/a
n/a
n/a
Centrotec SE
0.0
0.0
0.0
0.7
n/a
n/a
n/a
n/a
Centrotherm Gas Flue Technologies
0.0
0.0
0.0
0.1
n/a
n/a
n/a
n/a
Centrotherm Systemtechnik GmbH
0.0
0.1
0.0
3.8
n/a
n/a
n/a
n/a
CS Wismar GmbH
0.0
0.0
0.0
2.2
n/a
n/a
n/a
n/a
Hardpark Fürth GmbH
0.0
0.0
0.0
0.1
n/a
n/a
n/a
n/a
XCNT GmbH
0.0
0.0
0.0
0.3
n/a
n/a
n/a
n/a
Ubbink BV
0.0
0.1
0.4
2.5
n/a
n/a
n/a
n/a
Ubbink NL
0.1
0.0
3.7
0.1
n/a
n/a
n/a
n/a
Ubbink UK Ltd.
0.0
0.0
0.0
0.3
n/a
n/a
n/a
n/a
Total
16.7
30.4
4.8
16.2
7.3
14.6
0.1
1.3
As regards transactions with related parties, it should be noted that they are not to be qualified as atypical or unusual but
should be included in the normal course of operations carried out by Group companies. These transactions are regulated
by market conditions and based on the characteristics of the services provided. Transactions carried out by the Group
with these related parties are primarily of a commercial nature except for Merloni Holding S.p.A. where transactions
mainly consisted in the relationship for the national tax consolidation.
In addition, members of the Ariston Board and executives with strategic responsibilities and their families are also con-
sidered related parties.
211
Fees attributable to the year and represented by remuneration to Directors of the Parent Company, at 31 December
2023, are summarised as follow:
|
Office
|
Year
|
Fixed remuneration
|
Variable remuneration
|
Extraordinary item
|
|
|
(in € million)
|
Base salary
|
Fees
|
Short-term incentive
|
||
|
Directors
|
2023
|
2.6
|
0.7
|
0.9
|
1.0
|
|
Total
|
2.6
|
0.7
|
0.9
|
1.0
|
|
Notes:
-
Fixed remuneration does not include Benefits and Perks
-
Variable remuneration does not include the Long-term incentive
-
Base Salary includes: i. for the Executive Chair, the employee gross salary as well as the executive director fee; ii. for the former chief executive officer
the executive director fee; iii. for the new chief executive officer the employee gross salary , the executive director fee and the non-compete consider-
ation
-
Fees include the non-executive directors’ fees as well as the committee membership remuneration
-
Short-term incentive includes: the actual amount for the year of performance, not yet paid
-
Extraordinary item includes the retention one-off payment to the former chief executive officer
Both the remuneration of the executive directors and the non-executive directors have been included in ‘Note 3.1.1 –
Stock-based incentive plan payments’.
AUDIT FEES
The fees for services provided by the Company’s independent auditors to the Company and its subsidiaries are broken
down as follows:
Audit fee
31.12.2023
31.12.2022
(in € million)
Audit fees
2.3
2.0
Other non-audit services
0.0
0.0
Total
2.3
2.0
The fees for audit services provided in 2023 by Ernst & Young Accountants LLP are equal to € 0.2 million (€ 0.3 million in
2022).
EVENTS AFTER THE REPORTING PERIOD
There are no significant events after the reporting date to be mentioned in this report.
|
No.
|
Company
|
Registered office
|
Curr.
|
Share capital
|
Business
unit (*)
|
Investing companies
|
Direct
controlling
interest
|
Subsidiaries'
controlling
interest
|
Minority
interest
|
|
1
|
Ariston Holding N.V.
|
Netherlands
|
EUR
|
46,476,002
|
TC
|
||||
|
2
|
Air Install B.V.
(1)
|
Netherlands
|
EUR
|
10,000
|
TC
|
Air Install Group B.V.
|
100.00
|
||
|
3
|
Air Install Group B.V.
(1)
|
Netherlands
|
EUR
|
18,154
|
TC
|
Brink Climate Systems B.V.
|
100.00
|
||
|
4
|
AR1 S.r.l.
|
Italy
|
EUR
|
200,000
|
TC
|
Ariston S.p.A.
|
100.00
|
||
|
5
|
Ariston Benelux S.A./N.V.
|
Belgium
|
EUR
|
15,000,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
6
|
Ariston Climate Solutions
D.o.o. Svilajnac
|
Serbia
|
RSD
|
11,740,000
|
TC
|
ATAG Heating B.V.
|
100.00
|
||
|
7
|
Ariston Climate Solutions
Mexico S.A. de C.V.
|
Mexico
|
MXN
|
2,350,000,000
|
TC
|
Elcotherm AG
|
99.99
|
||
|
Atag Heating B.V.
|
0.01
|
||||||||
|
8
|
Ariston Climate Systems GmbH
(1)
|
Germany
|
EUR
|
25,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
9
|
Ariston Croatia d.o.o.
|
Croatia
|
EUR
|
110,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
10
|
Ariston CZ S.r.o.
|
Czech Republic
|
CZK
|
30,000,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
11
|
Ariston Deutschland GmbH
|
Germany
|
EUR
|
255,700
|
TC
|
Elco International GmbH
|
100.00
|
||
|
12
|
Ariston Egypt LLC
|
Egypt
|
EGP
|
10,900,000
|
TC
|
Ariston Group Water Heating
Solutions Egypt LLC
|
99.99
|
||
|
Ariston Holding N.V.
|
0.01
|
||||||||
|
13
|
Ariston France S.a.s.
|
France
|
EUR
|
54,682,110
|
TC
|
Ariston Holding N.V.
|
99.99
|
||
|
Elco International GmbH
|
0.01
|
||||||||
|
14
|
Ariston Group Greece P.C.
(1)
|
Greece
|
EUR
|
2,500,000
|
TC
|
ATAG Heating B.V.
|
100.00
|
||
|
15
|
Ariston Group India Private
Limited
|
India
|
INR
|
457,500,000
|
TC
|
Ariston Holding N.V.
|
99.99
|
||
|
Ariston S.p.A.
|
0.01
|
||||||||
|
16
|
Ariston Group Water Heating
Solutions Egypt LLC
|
Egypt
|
EGP
|
100,000
|
TC
|
ATAG Heating B.V.
|
99.00
|
||
|
Ariston Holding N.V.
|
0.01
|
||||||||
|
17
|
Ariston Gulf Water Heating LLC
|
UAE
|
AED
|
400,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
18
|
Ariston Heating Solutions
(China) Co. Ltd.
|
China
|
CNY
|
145,885,010
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
19
|
Ariston Heating Technology
Nigeria Ltd.
|
Nigeria
|
NGN
|
10,000,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
20
|
Ariston Holding USA LLC
|
USA
|
USD
|
77,037,666
|
TC
|
Elcotherm AG
|
100.00
|
||
|
21
|
Ariston Hungária Kft.
|
Hungary
|
HUF
|
131,000,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
22
|
Ariston Iberica S.L.
|
Spain
|
EUR
|
800,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
23
|
Ariston Industrial Vietnam Co.
Ltd.
|
Vietnam
|
VND
|
41,600,000,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
24
|
Ariston Kazakhstan LLP
|
Kazakhstan
|
KZT
|
212,100
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
25
|
Ariston Maroc SA
|
Morocco
|
MAD
|
3,000,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
26
|
Ariston Polska Sp. zo.o.
|
Poland
|
PLN
|
12,000,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
27
|
Ariston Pte Ltd.
|
Singapore
|
SGD
|
100,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
28
|
Ariston S.p.A.
|
Italy
|
EUR
|
30,100,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
29
|
Ariston Sales Mexico S.A. de
C.V.
|
Mexico
|
MXN
|
302,188,920
|
TC
|
Ariston Climate Solutions
Mexico S.A. de C.V.
|
0.03
|
||
|
Calentadores de America S.A.
de C.V.
|
99.97
|
||||||||
|
30
|
Ariston South Africa (Pty) Ltd.
|
South Africa
|
ZAR
|
100
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
31
|
Ariston Thermo Argentina S.r.l.
|
Argentina
|
ARS
|
16,805,269
|
TC
|
Ariston Holding N.V.
|
99.64
|
||
|
Thermowatt S.p.A.
|
0.36
|
||||||||
|
32
|
Ariston Thermo Romania S.r.l.
|
Romania
|
RON
|
29,041,740
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
33
|
Ariston Thermo Rus LLC
|
Russia
|
RUB
|
1,403,787,727
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
34
|
Ariston Thermo Tunisie SA
|
Tunisia
|
EUR
|
500,000
|
TC
|
Elcotherm AG
|
66.70
|
||
|
Third parties
|
33.30
|
||||||||
|
35
|
Ariston U.K. Ltd.
|
UK
|
GBP
|
7,500,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
213
|
No.
|
Company
|
Registered office
|
Curr.
|
Share capital
|
Business
unit (*)
|
Investing companies
|
Direct
controlling
interest
|
Subsidiaries'
controlling
interest
|
Minority
interest
|
|
36
|
Ariston Ukraine LLC
|
Ukraine
|
UAH
|
38,705,753
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
37
|
Ariston USA LLC
|
USA
|
USD
|
10,275,184
|
TC
|
Ariston Holding USA LLC
|
100.00
|
||
|
38
|
Ariston Vietnam CO. Ltd.
|
Vietnam
|
VND
|
31,471,000,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
39
|
Atag Construction B.V.
|
Netherlands
|
EUR
|
1
|
TC
|
Atag Heating B.V.
|
100.00
|
||
|
40
|
Atag Electronics B.V.
|
Netherlands
|
EUR
|
1
|
TC
|
Atag Heating B.V.
|
100.00
|
||
|
41
|
Atag Engineering B.V.
|
Netherlands
|
EUR
|
1
|
TC
|
Atag Heating B.V.
|
100.00
|
||
|
42
|
Atag Heating B.V.
|
Netherlands
|
EUR
|
10,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
43
|
Atag Heizungstechnik GmbH
|
Germany
|
EUR
|
512,000
|
TC
|
Atag Heating B.V.
|
100.00
|
||
|
44
|
Atag Verwarming Belgie B.V.BA
|
Belgium
|
EUR
|
18,600
|
TC
|
Atag Heating B.V.
|
100.00
|
||
|
45
|
ATM1 HR S.A. de C.V.
|
Mexico
|
MXN
|
50,000
|
TC
|
Atag Heating B.V.
Elcotherm AG
|
99.99
0.01
|
||
|
46
|
Atmor (Dongguan) Electronic
Technology Co. Ltd.
|
China
|
USD
|
1,000,000
|
TC
|
Atmor Electronic Technology
Company Ltd
|
100.00
|
||
|
47
|
Atmor Electronic Technology
Company Ltd.
|
Hong Kong
|
HKD
|
10,000
|
TC
|
Atmor Industries LTD
|
100.00
|
||
|
48
|
Atmor Industries Ltd.
|
Israel
|
USD
|
1,790,409
|
TC
|
Elcotherm AG
|
100.00
|
||
|
49
|
BCE S.r.l.
|
Italy
|
EUR
|
10,400
|
BUR
|
Ecoflam Bruciatori S.p.A.
|
100.00
|
||
|
50
|
(1)
Brink Climate Systems B.V.
|
Netherlands
|
EUR
|
20,004
|
TC
|
Ariston Climate Systems
GmbH
|
100.00
|
||
|
51
|
Brink Climate Systems
(1)
Deutschland GmbH
|
Germany
|
EUR
|
450,000
|
TC
|
Brink Climate Systems B.V.
|
100.00
|
||
|
52
|
Brink Climate Systems France
(1)
S.a.s.
|
France
|
EUR
|
10,000
|
TC
|
Brink Climate Systems B.V.
|
100.00
|
||
|
53
|
Calentadores de America S.A.
de C.V.
|
Mexico
|
MXN
|
1,226,593,637
|
TC
|
Ariston Climate Solutions
Mexico S.A. de C.V.
|
99.99
|
||
|
Atag Heating B.V.
|
0.01
|
||||||||
|
54
|
Chromagen Australia PTY Ltd.
|
Australia
|
AUD
|
10,358,995
|
TC
|
Elcotherm AG
|
51.00
|
||
|
Third parties
|
49.00
|
||||||||
|
55
|
Chromagen Israel Ltd.
|
Israel
|
ILS
|
10,901
|
TC
|
Elcotherm AG
|
100.00
|
||
|
56
|
ComfortExpert B.V.
(1)
|
Netherlands
|
EUR
|
10,000
|
TC
|
Air Install Group B.V.
|
100.00
|
||
|
57
|
Cuenod S.a.s.
|
France
|
EUR
|
15,422,390
|
BUR
|
Ariston France sas
|
100.00
|
||
|
58
|
Domotec AG
|
Switzerland
|
CHF
|
50,000
|
TC
|
Elcotherm AG
|
100.00
|
||
|
59
|
Ecoflam Bruciatori S.p.A.
|
Italy
|
EUR
|
3,690,000
|
BUR
|
Ariston Holding N.V.
|
100.00
|
||
|
60
|
Elco Austria GmbH
|
Austria
|
EUR
|
35,000
|
TC
|
Elcotherm AG
|
100.00
|
||
|
61
|
Elco B.V.
|
Netherlands
|
EUR
|
2,046,004
|
TC
|
Elco Burners B.V.
|
100.00
|
||
|
62
|
Elco Belgium S.A./N.V.
|
Belgium
|
EUR
|
2,650,000
|
TC
|
Ariston Benelux S.A./N.V.
|
99.99
|
||
|
Elco B.V.
|
0.01
|
||||||||
|
63
|
Elco Burners B.V.
|
Netherlands
|
EUR
|
22,734
|
BUR
|
Atag Heating B.V.
|
100.00
|
||
|
64
|
Elco Burners GmbH
|
Germany
|
EUR
|
25,000
|
BUR
|
Elco International GmbH
|
100.00
|
||
|
65
|
Elco GmbH
|
Germany
|
EUR
|
50,000
|
TC
|
Elco International GmbH
|
100.00
|
||
|
66
|
Elco Heating Solutions Ltd.
|
UK
|
GPB
|
3,001,750
|
TC
|
Ariston U.K. Ltd.
|
100.00
|
||
|
67
|
Elco International GmbH
|
Germany
|
EUR
|
8,691,962
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
68
|
Elco Italia S.p.A.
|
Italy
|
EUR
|
3,500,000
|
TC
|
Ariston S.p.A.
|
100.00
|
||
|
69
|
Elcotherm AG
|
Switzerland
|
CHF
|
1,000,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
70
|
Gastech-Energi A/S
|
Denmark
|
DKK
|
7,554,935
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
71
|
Holmak export import
(1)
D.o.o.e.l.
|
Macedonia
|
MKD
|
816,651
|
TC
|
Holmak HeatX B.V.
|
100.00
|
||
|
72
|
Holmak HeatX B.V.
(1)
|
Netherlands
|
EUR
|
38,500
|
TC
|
Brink Climate Systems B.V.
|
100.00
|
||
|
73
|
Ingrado S.r.l.
|
Italy
|
EUR
|
10,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
74
|
Innosource B.V.
(1)
|
Netherlands
|
EUR
|
18,000
|
TC
|
Holmak HeatX B.V.
|
100.00
|
||
|
75
|
Instachauf S.a.s.
|
France
|
EUR
|
200,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
214
|
No.
|
Company
|
Registered office
|
Curr.
|
Share capital
|
Business
unit (*)
|
Investing companies
|
Direct
controlling
interest
|
Subsidiaries'
controlling
interest
|
Minority
interest
|
|
76
|
MTG Service Single Member
(1)
P.C.
|
Greece
|
EUR
|
10,000
|
TC
|
Ariston Group Greece P.C.
|
100.00
|
||
|
77
|
(1)
Ned Air B.V.
|
Netherlands
|
EUR
|
54,000
|
TC
|
Ariston Climate System
GmbH
|
100.00
|
||
|
78
|
NTI Boilers Inc.
|
Canada
|
CAD
|
43,000,000
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
79
|
NTI USA Inc.
|
USA
|
USD
|
100
|
TC
|
NTI Boilers Inc.
|
100.00
|
||
|
80
|
Pro-Klima D.o.o.
(1)
|
Croatia
|
EUR
|
1,208,786
|
TC
|
Wolf GmbH
|
100.00
|
||
|
81
|
PT Ariston Group Indonesia
Ltd.
|
Indonesia
|
IDR
|
16,260,750,000
|
TC
|
Ariston Holding N.V.
|
99.93
|
||
|
Ariston Pte Ltd.
|
0.07
|
||||||||
|
82
|
Racold Thermo Private Ltd.
|
India
|
INR
|
262,134,750
|
TC
|
Ariston Holding N.V.
|
99.99
|
||
|
Ariston S.p.A.
|
0.01
|
||||||||
|
83
|
S.H.E. d.o.o. Svilajnac
|
Serbia
|
RSD
|
35,432,220
|
COM
|
Thermowatt S.p.A.
|
100.00
|
||
|
84
|
SPM Innovation S.a.s.
|
France
|
EUR
|
750,020
|
BUR
|
Ariston Holding N.V.
|
100.00
|
||
|
85
|
Tasfiye Halinde Ariston
Thermo Isıtma ve Soğutma
Sistemleri İthalat ve İhracat ve
Dağıtım Ltd.Şti.
|
Turkey
|
TRY
|
66,157,500
|
TC
|
Ariston Holding N.V.
|
100.00
|
||
|
86
|
Thermowatt (Wuxi) Electric Co.
Ltd.
|
China
|
CNY
|
82,769,200
|
COM
|
Ariston Heating Solutions
(China) Co. Ltd.
|
70.00
|
||
|
Ariston Holding N.V.
|
30.00
|
||||||||
|
87
|
Thermowatt Professional S.r.l.
|
Italy
|
EUR
|
100,000
|
COM
|
Thermowatt S.p.A.
|
100.00
|
||
|
88
|
Thermowatt S.p.A.
|
Italy
|
EUR
|
7,700,000
|
COM
|
Ariston Holding N.V.
|
100.00
|
||
|
89
|
WOLF Energiesparsysteme
(1)
O.O.O.
|
Russia
|
RUB
|
113,200,000
|
TC
|
Wolf GmbH
|
99.00
|
||
|
Wolf Power Systems
|
1.00
|
||||||||
|
90
|
Wolf Energiesystemen B.V.
(1)
|
Netherlands
|
EUR
|
150,000
|
TC
|
Wolf GmbH
|
100.00
|
||
|
91
|
Wolf France S.a.s.
(1)
|
France
|
EUR
|
1,040,000
|
TC
|
Wolf GmbH
|
100.00
|
||
|
92
|
(1)
Wolf GmbH
|
Germany
|
EUR
|
20,000,000
|
TC
|
Ariston Climate Systems
GmbH
|
100.00
|
||
|
93
|
Wolf HVAC HK Ltd.
(1)
|
Hong Kong
|
HKD
|
10,000
|
TC
|
Wolf GmbH
|
100.00
|
||
|
94
|
Wolf HVAC Systems
(1)
(Shanghai) Co. Ltd.
|
China
|
CNY
|
14,512,361
|
TC
|
Wolf GmbH
|
100.00
|
||
|
95
|
Wolf Iberica Climatization Y
(1)
Calefacion SA
|
Spain
|
EUR
|
1,181,315.74
|
TC
|
Wolf GmbH
|
100.00
|
||
|
96
|
Wolf Italia S.r.l.
(1)
|
Italy
|
EUR
|
100,000
|
TC
|
Wolf GmbH
|
100.00
|
||
|
97
|
Wolf Power Systems GmbH
(1)
|
Germany
|
EUR
|
500,000
|
TC
|
Wolf Power Systems Holding
|
89.00
|
||
|
Wolf GmbH
|
11.00
|
||||||||
|
98
|
Wolf Power Systems Holding
GmbH
|
Germany
|
EUR
|
83,333
|
TC
|
Elco International GmbH
|
100.00
|
||
|
99
|
Wolf Technika Grzewcza
(1)
Sp.zo.o.
|
Poland
|
PLN
|
3,189,000
|
TC
|
Wolf GmbH
|
100.00
|
The participation shares in this table are the ones relevant for determining the Consolidated financial statements. The companies acquired with the put/call
contracts to be exercised on the remaining shares of the share capital were fully consolidated, together with the acquisition agreement based on the provisions
set forth in IFRS3 (see the specific treatment of the individual put/call options in the notes).
All companies summarised in the table above are consolidated using the line by line method.
(1)
Entities in perimeter variation 2023.
(*)
Refers to the main Division.
215
No.
Company
Registered office
Curr.
Share capital
Business
unit (*)
Investing companies
Direct
controlling
interest
Subsidiaries'
controlling
interest
Minority
interest
1
Joint venture "Ariston Thermo -
UTG LLC" (**)
Uzbekistan
EUR
1,000,000
TC
Ariston Holding N.V.
51.00
49.00
2
Haas Heating B.V.
Netherlands
EUR
100
TC
Atag Heating B.V.
24.50
75.50
3
Thermal Earth Ltd
UK
GBP
81
TC
Ariston U.K. Ltd.
30.00
70.00
(**)
The company was not included in the scope of consolidation because of its limited area of operation and significance.
7.
Ariston Holding N.V. Company - only Financial Statements at 31 December 2023
INDEX – Company - only Financial Statements at 31 December 2023
Ariston Holding N.V. – Company - only Financial Statements at 31 December 2023
Company - only primary statements
Income Statement
Statement of Financial position
Notes to the Company financial statements
217
7. Ariston Holding N.V. – Company - only Financial Statements at 31 December 2023
Ariston Holding N.V. Income Statement as at 31 December 2023
(in € thousand)
notes
2023
2022
NET TURNOVER
1.1
8,804
8.817
Other operating income
1.1
22
1,588
Total operating income
1.1
8,826
10,405
Costs of raw materials and consumables
19
28
Costs of work contracted out and other external costs
1.2
18,589
16,381
Wages and salaries
1.3
7,373
7,215
Social security charges
1.4
1,795
1,675
Amortisation of intangible fixed assets and depreciation of tangible fixed assets
516
582
Other operating expenses
1.5
2,225
2,147
Total operating expenses
30,517
28,028
Income from fixed asset investments
1.6
1,189
906
Other interest income and similar income
1.7
14,779
13,425
Interest expense and similar expenses
1.8
53,022
28,902
RESULTS BEFORE TAX
-58,745
-32,194
Taxes (expenses)/benefit
1.9
13,004
6,129
Share in profit/(loss) of participation
1.10
236,922
166,324
NET RESULT AFTER TAX
191,181
140,259
The accompanying notes are an integral part of the Company Financial Statements.
218
Ariston Holding N.V. Statement of Financial position as at 31 December 2023
(before appropriation of results)
notes
2023
2022 (*)
(in € thousand)
ASSETS
FIXED ASSETS
Intangible fixed assets
Goodwill
2.1
502
502
Prepayments on intangible fixed assets
2.1
5
5
Other intangible assets
2.1
64
95
Total intangible fixed assets
2.1
571
602
Tangible fixed assets
Land and buildings
2.2
1,564
1,586
Other fixed operating assets
2.2
245
485
Total tangible fixed assets
2.2
1,809
2,071
Financial fixed assets
Interests in group companies
2.3
2,242,109
1,048,953
Other participations
2.3
3,551
5,089
Accounts receivable from participations and other participating interests
2.3
32,502
40,722
Other investments
2.3
42
41
Other accounts receivable
2.3
5
14
Total financial fixed assets
2.3
2,278,209
1,094,819
CURRENT ASSETS
Accounts receivable
Trade debtors
2.4
27
97
Shareholders and participating interests
2.4
215,285
136,667
Other accounts receivable
2.4
43,058
44,421
Prepayments and accrued income
2.4
3,206
2,017
Total accounts receivable
2.4
261,576
183,202
Cash
2.5
166,967
678,964
TOTAL ASSETS
2,709,132
1,959,658
219
Ariston Holding N.V. Statement of Financial position as at 31 December 2023
(before appropriation of results)
notes
2023
2022 (*)
(in € thousand)
LIABILITIES AND EQUITY
EQUITY
Called-up share capital
3.1
46,476
46,062
Share premium
3.1
711,312
313,344
Revaluation reserve
3.1
8,202
8,202
Legal and statutory reserves
3.1
Legal reserves
3.1
30,790
25,318
Reserves required under the articles of association
3.1
25,250
15,250
Other reserves
3.1
181,652
231,639
Retained earnings
3.1
307,758
229,881
Profit/loss for the period
3.1
191,181
140,259
Total equity
3.1
1,502,621
1,009,955
PROVISIONS
Pensions
3.2
165
239
Taxes
3.2
21,140
22,375
Other
3.2
13,598
10,328
Total provisions
3.2
34,903
32,942
LONG-TERM DEBT
Debts to lending institutions
3.3
692,427
669,105
Other liabilities
3.3
1,908
1,958
Total long-term debt
3.3
694,335
671,063
CURRENT LIABILITIES
Trade creditors
3.4
4,446
4,994
Amounts due to shareholders and participating interests
3.5
430,141
221,527
Taxes and social security contributions
3.6
1,456
1,601
Other liabilities
3.7
41,209
17,551
Accruals and deferred income
21
25
Total current liabilities
477,273
245,698
TOTAL LIABILITIES AND EQUITY
2,709,132
1,959,658
(*) 2022 restated with reference to change in accounting policy illustrated in section
Accounting policies
.
The accompanying notes are an integral part of the Company Financial Statements.
220
Ariston Holding N.V. Notes to the Company Financial Statements
7.1 Corporate information
Ariston Holding N.V. (hereafter also the “Company”) is a Company listed on Euronext Milan, Italy, having its statutory seat
in the Netherlands and enrolled in the Chamber of Commerce - KVK - of Amsterdam (CCI no. 83078738, RSIN no.
862717589, Establishment no. 000049275437, VAT Code: 01527100422, Fiscal Code 00760810572), with a secondary
office in Via Broletto 44, Milan I-20121.
For purposes of its business operations in Italy, the Company has established a secondary seat with a permanent repre-
sentative office, within the meaning of article 2508 of the Italian Civil Code.
At 31 December 2023, the share capital of the Company was represented by 125,505,005 ordinary shares and 22,095,194
non-listed ordinary shares of € 0.01 each, and by 225,000,000 multiple vote shares of € 0.20 each.
At the same date the issued share capital of the Company was held by Merloni Holding S.p.A. for 58.38%, Amaranta S.r.l.
for 7.96%, the market for 21.95%, Centrotec SE for 11.12% and Ariston Holding N.V. (Treasury Shares) for 0.60%. Due to
the presence of multiple vote shares, and not including Treasury Shares, Merloni Holding S.p.A was entitled for 73.64%
of voting rights, Amaranta S.r.l. for 18.60%, and the market for the residual 7.76%.
The company financial statements comprise the following: income statement, statement of financial position and these
notes to the financial statements.
7.2 Principal activities
Ariston Holding N.V.'s primary purpose is to be a holding company and, with it, the management and coordination of a
series of business processes for all the subsidiaries of the Group. The Group, with its subsidiaries, is active in the thermal
comfort business and related businesses, operating worldwide across a variety of kind of products, systems and plat-
forms, with a cutting edge technology.
The activities of the Group can be broken down into three main sectors:
•
Thermal comfort, which can be classified into water heating products, space heating products, domestic heat-
recovery ventilation, air handling and combined heat and power;
•
Burners;
•
Components.
For a detail of Group revenues by business line and geographical area, refer to section
Disclosure to the Financial State-
ments
included elsewhere in this Annual Report.
In January 2023 Ariston Holding N.V. completed the acquisition of 100% of the share capital of CENTROTEC Climate Sys-
tems GmbH (now Ariston Climate Systems GmbH) for € 625,838 thousand in cash, plus 41,416,667 Ariston Holding N.V.
shares. The transaction, announced in September 2022, was the biggest deal in the Group’s history and contributed to
the increase in Ariston Group’s ESG focus, reinforcing its portfolio of brands and its mid- to high-end offer of climate
solutions, and further consolidating its positioning in Europe, with Germany becoming the first market.
For a futher detail of business events occurred in the year, refer to section
Significant business events of the year
included
elsewhere in this Annual Report.
7.3 Accounting policies
Basis of preparation
The 2023 Company Financial Statements represent the separate financial statements of Ariston Holding N.V. and have
been prepared in accordance with the legal requirements of Title 9, Book 2 of the Netherlands Civil Code (NCC). In par-
ticular, according to Section 2:362 (8) NCC, it is allowed to prepare the consolidated financial statements in accordance
with the standards adopted by International Accounting Standards Board and approved by the European Commission
and to use in the separate financial statements the same policies for recognition and measurement as those used in the
consolidated accounts.
221
The accounting policies are described in a specific section,
Basis of accounting preparation
, of the Consolidated Financial
Statements included in this Annual Report, while the application of Combination 3 enables keeping the equity according
to the company financial statements equal to the equity according to the consolidated financial statements, since the
subsidiaries are accounted for using the equity method in the company financial statements of Ariston Holding N.V.
Change in accounting policies
As permitted by article 2:362-8 NCC, Ariston Holding N.V. company-only financial statements are presented adopting
Combination 3 as per Part 9, Book 2 NCC with application of the option to apply the recognition and measurement prin-
ciples which the entity used in preparing the consolidated financial statements while applying presentation and disclosure
requirements according to DAS (Dutch accounting standards). In particular, participating interests (consolidated subsidi-
aries) have been presented in the company-only financial statements in accordance with the net asset value method (DAS
100.114), recognising goodwill separately on the face of the balance sheet under intangible assets. After the acquisition
of CENTROTEC Climate System GmbH in 2023, management made an assessment to verify whether the application of the
above method was still the best solution.
Considering the amount of goodwill generated from the acquisition, Ariston
Holding N.V. assessed to adopt, starting from 2023, the equity method allowed by Combination 3, recognising goodwill
within the carrying amount of the participating interest, in line with accounting treatment provided by DAS 140. Ariston
Holding N.V. management believes that such a change provides more comparable information, leading to a better presen-
tation of investments.
In accordance with DAS 140.214 the financial impact of the change in the accounting policies is a reclassification within
fixed assets for an amount of € 51,788 thousand with no direct impact on the company’s financial position (net equity)
and/or income statement. In the Statement of Financial Position the balances for 2022 have been restated accordingly.
Format of the financial statements
Given the activities carried out by Ariston Holding N.V., the presentation of the Company Income Statement is based on
the nature of revenues and expenses.
Ariston Holding N.V. financial statements are prepared in Euro, which is also the Company's functional currency, repre-
senting the currency in which the main transactions of the Company are denominated.
The Statements of Income and of Financial Position and Notes to the Financial Statements are presented in thousands of
euro, except where otherwise stated.
As parent company, Ariston Holding N.V. has also prepared consolidated financial statements for the Ariston Group for
the year ended on 31 December 2023.
7.4 2023 Financial Year Overview
Regarding the Ariston Group overview for the year ended on 31 December 2023, refer to section
Full year 2023 conclusion
and outlook
included elsewhere in this Annual Report.
7.5 Composition and principal changes
Note 1.1 – Operating income
The following table summarises the operating income:
Operating income
(in € thousand)
31.12.2023
31.12.2022
Net turnover:
-
Revenues from services
8,804
8,817
Total Net turnover
8,804
8,817
Other income
22
1,588
Total Operating Income
8,826
10,405
Revenues from services, consisting of services rendered to the principal subsidiaries of the Ariston Group, are substan-
tially in line with the amount for 2022.
Note 1.2 – Costs of work contracted out and other external costs
Costs of work contracted out and other external costs during the year ended 31 December 2023 were € 18,589 thousand
(€ 16,381 thousand at 31 December 2022), consisting of consulting costs, costs for legal and financial services, in addition
to Directors’ fees, and included components from share-based compensation plans, and Statutory Auditors’ fees.
The increase from 2022 was mainly due to Directors’ fees and assurance costs.
Note 1.3 – Wages and salaries
Wages and salaries costs during the year ended 31 December 2023 was of € 7,373 thousand (€ 7,215 thousand at 31
December 2022), including components from share-based compensation plans. The average number of employees in
2023 was 61 (59 at 31 December 2022), based in Italy (all wholly outside the Netherlands).
31.12.2023
Average 2023
31.12.2022
Average 2022
Executives
16
17
15
14
Managers
17
15
12
13
White collars
30
28
30
29
Blue collars
1
1
3
3
Total
64
61
60
59
Note 1.4 – Social security charges
Social security charges during the year ended 31 December 2023 were € 1,795 thousand (€ 1,675 thousand at 31 Decem-
ber 2022).
Note 1.5 – Other operating expenses
Other operating expenses include provisions for employee severance indemnity and legal disputes, other personnel costs,
not deductible VAT and non-periodic losses.
Note 1.6 – Income from fixed asset investments
Income from fixed asset investment relates to financial income from subsidiaries. At 31 December 2023, income from
fixed asset investments was € 1,189 thousand (€ 906 thousand at 31 December 2022), with an increase of € 283 thousand.
Income from fixed asset investments
(in € thousand)
31.12.2023
31.12.2022
Long-term interest income from subsidiaries
1,189
906
Total
1,189
906
Note 1.7 – Other interest income and similar income
The following table summarises Other interest income and similar income:
Other interest income and similar income
(in € thousand)
31.12.2023
31.12.2022
Exchange rate gains
8,201
11,231
Interest income from bank
2,066
1,065
Short-term interest income from subsidiar-
ies
1,823
554
Interest income from cash pooling
1,707
311
Other income
982
264
Total
14,779
13,425
At 31 December 2023, exchange rate gains were € 8,201 thousand (€ 11,231 thousand at 31 December 2022).
Exchange rate gains include both the monetary changes on the accounting entries that were realised at the end of the
reporting period (“Realised exchange rate gains”) and the monetary changes that were not yet realised because they re-
ferred to transactions that were not closed at the end of the reporting period (“Unrealised exchange rate gains”). The
result for the period relating to realised and unrealised exchange differences was mostly affected by the US dollar and
Chinese renminbi. Exchange rate gains include € 7,464 thousand of gains on foreign currency Forward contracts from
transactions entered into to hedge foreign currency fluctuations.
Interest income from bank was € 2,066 thousand at 31 December 2023 (€ 1,065 thousand at 31 December 2022), with an
increase of € 1,001 thousand resulting from an increase in short-term liquidity investments. Other financial income includes
gains and losses on derivatives on commodities for Group purposes.
Note 1.8 – Interest expense and similar expenses
The following table summarises Interest expense and similar expenses:
Interest expense and similar expenses
(in € thousand)
31.12.2023
31.12.2022
Interest and other expenses due to bank
26,166
7,200
Exchange rate losses
16,628
20,792
Interest due to subsidiaries
10,128
841
Other financial expense
100
69
Total
53,022
28,902
At 31 December 2023, exchange rate losses were € 16,628 thousand (€ 20,792 thousand at 31 December 2022).
Exchange rate losses include both the monetary changes on the accounting entries that were realised at the end of the
reporting period (“Realised exchange rate losses”) and the monetary changes that were not yet realised because they
referred to transactions that were not closed at the end of the reporting period (“Unrealised exchange rate losses”). The
result for the period relating to realised and unrealised exchange rate losses was mostly affected by the Swiss franc and
Chinese renminbi. Exchange rate losses include € 15,000 thousand of loss on foreign currency Forward contracts from
transactions entered into to hedge foreign currency fluctuations.
224
Interest and other expenses due to bank include gains and losses on derivatives on interest rates for Group purposes, the
increase of € 18,966 thousand from 31 December 2022 was mainly due to interest due to bank reflecting the impact of
interest rate hikes for 2023.
Interest due to subsidiaries of € 10,128 thousand include both interest related to loans received from NTI Boilers Inc.,
Calentadores de America S.A. de
C.V., Ariston Pte Ltd and Tasfiye Halinde Ariston Thermo Isıtma ve Soğutma Sistemleri
İthalat ve İhracat ve Dağıtım Ltd.Şti., and cash pooling interests.
Note 1.9 – Taxes (expenses)/benefit
The following table summarises Taxes (expenses):
Taxes (expenses)/benefit
(in € thousand)
31.12.2023
31.12.2022
Fiscal benefit from consolidated taxation
15,762
8,000
Corporation tax expense
-1,207
-626
Tax (expense)/benefit current year
14,555
7,374
Tax (expense)/benefit previous years
2,428
1,373
Total tax (expense)/benefit
16,983
8,747
Deferred tax (expense)/benefit
-3,979
-2,618
Total
13,004
6,129
In 2023 income taxes were a benefit of € 16,983 thousand (a benefit of € 8,747 thousand at 31 December 2022), and
refer for € 15,762 thousand to income within the Ariston Group consolidation scheme in Italy, partially offset by with-
holdings on dividends from subsidiaries, and for € 2,428 thousand to previous years’ income tax expenses.
Deferred taxes were an expense of € 3,979 thousand (an expense of € 2,618 thousand at 31 December 2022), with an
increase of € 1,361 thousand mainly due to the increase in deferred tax on undistributed earnings.
Ariston Holding N.V. is incorporated in the Netherlands but is a tax resident of Italy. The reconciliation of the differences
between the theoretical income taxes and the total income taxes is presented based on the Italian local corporation
income tax rate in force in 2023 of 24%. A reconciliation of Ariston Holding N.V. income tax expense for the year ended
as at 31 December 2023 is as follows:
(in € thousand)
31.12.2023
%
Taxes at nominal Tax Rate
14,099
24.0%
DTA write down
-848
-1.4%
Withholding taxes on dividends
-910
-1.5%
Permanent differences
-443
-0.8%
Italian ACE
1,774
3.0%
Prior year taxes
2,428
4.1%
Deferred taxes on und. earnings
-2,798
-4.8%
Other
-298
-0.5%
Effective Taxes Charge
13,004
22.1%
For comparative purposes, here below is shown a reconciliation of Ariston Holding N.V. income tax expense for the year
ended as at 31 December 2022:
(in € thousand)
31.12.2022
%
Taxes at nominal Tax Rate
7,727
24.0%
DTA write down
-1,557
-4.8%
Withholding taxes on dividends
-546
-1.7%
Permanent differences
-603
-1.9%
Italian ACE
1,200
3.7%
Prior year taxes
1,373
4.3%
Deferred taxes on und. earnings
-1,385
-4.3%
Other
-80
-0.2%
Effective Taxes Charge
6,129
19.1%
Note 1.10 – Share in profit/(loss) of participations
The following table summarises the Share in profit of participations:
Share in profit/(loss) of participations
(in € thousand)
31.12.2023
31.12.2022
Financial value of interests in group com-
panies
238,463
166,770
Financial value of other participations
-1,541
-446
Total
236,922
166,324
The Share in profit of participations relates to the valuation of the Company’s share in the total equity of subsidiaries and
associates. In particular, the financial value of interests in group companies is given for € 241,588 thousand by the share
in profit of participations and for € 3,125 thousand by negative changes in values of the provision for interest in partici-
pating companies.
Note 2.1 – Intangible fixed assets
At 31 December 2023 the carrying amount of intangible fixed assets was € 571 thousand (€ 602 thousand at 31 December
2022) and related primarily to goodwill (€ 502 thousand).
As explained in the previous section
Change in accounting policies,
the value of goodwill in 2022, which was previously
recognised separately under intangible fixed assets, has been restated due to the adoption, starting from 2023, of the
equity method allowed by Combination 3, recognising goodwill within the carrying amount of the participating interest,
in line with the accounting treatment provided by DAS 140. The financial impact of this change in accounting policies is a
reclassification from intangible fixed assets to financial fixed assets for an amount of € 51,788 thousand.
The amount of € 502 thousand which continues to be classified in intangible fixed assets is due to the absence of a related
participating interest, since it referred to the acquisition of a legal entity incorporated in 2009.
With reference to other intangible assets, the amortisation expense for the period (€ 31 thousand) is recognised under
the appropriate item in the income statement.
Details of changes in intangible fixed assets are as follows:
Intangible Assets
Goodwill
Prepayments
on intangible
fixed assets
Other intangible assets
Total
(in € thousand)
Net value
Gross
Gross
Prov.
Net
Gross
Prov.
Net
As at 31.12.2022
502
5
124
-29
95
631
-29
602
Increases
0
0
0
0
0
0
0
0
Decreases
0
0
0
0
0
0
0
0
Amortisation
0
0
0
-31
-31
0
-31
-31
Reclassification
0
0
0
0
0
0
0
0
Total changes
0
0
0
-31
-31
0
-31
-31
As at 31.12.2023
502
5
124
-60
64
631
-60
571
Note 2.2 – Tangible fixed assets
At 31 December 2023 the carrying amount of tangible fixed assets was € 1,809 thousand (€ 2,071 thousand at 31 Decem-
ber 2022), out of which € 1,659 thousand (€ 1,697 thousand at 31 December 2022) related to right-of-use assets, in
accordance with IFRS16.
The gross value of tangible fixed assets was € 2,730 thousand (€ 3,144 thousand at 31 December 2022) and related to
accumulated depreciation of € 921 thousand (€ 1,073 thousand at 31 December 2022).
Depreciation for the period (€ 485 thousand) is recognised under the appropriate item in the income statement.
226
Details of changes in tangible fixed assets are as follows:
Tangible Assets
Land and buildings
Other fixed operating assets
Total
(in € thousand)
Gross
Prov.
Net
Gross
Prov.
Net
Gross
Prov.
Net
As at 31.12.2022
2,405
-819
1,586
739
-254
485
3,144
-1,073
2,071
Increases
327
0
327
125
0
125
452
0
452
Decreases
0
19
19
-310
62
-248
-310
81
-229
Amortisation
0
-368
-368
0
-117
-117
0
-485
-485
Reclassification
-402
402
0
-154
154
0
-556
556
0
Total changes
-75
53
-22
-339
99
-240
-414
152
-262
As at 31.12.2023
2,330
-766
1,564
400
-155
245
2,730
-921
1,809
Note 2.3 – Financial fixed assets
The following table summarises the composition of financial fixed assets:
Financial fixed assets
(in € thousand)
31.12.2023
31.12.2022
Change
Interests in Group companies
2,242,109
1,048,953
1,193,156
Other participations
3,551
5,089
-1,538
Accounts receivable from participations and other participat-
ing interests
32,502
40,722
-8,220
Other investments
42
41
1
Other accounts receivable
5
14
-9
Total
2,278,209
1,094,819
1,183,390
Interests in Group companies were subject to the following changes during 2023 and 2022:
Interests in Group companies
(in € thousand)
2023
2022
Change
Balance at beginning of year
1,048,953
952,095
96,858
Capital injection into subsidiaries
37,096
10
37,086
Purchase of participations
1,091,474
0
1,091,474
Capital reductions from subsidiaries
0
-51,000
51,000
Net contributions made to subsidiaries
490
290
200
Stock-based incentive plans
-924
-423
-501
Dividends received from subsidiaries
-151,419
-40,443
-110,976
Share in profit of participations
241,588
162,956
78,632
Cumulative translation adjustments and other OCI
-25,149
25,468
-50,617
Balance at end of year
2,242,109
1,048,953
1,193,156
As explained in the previous section
Change in accounting policies,
the 2022 value of Interests in Group companies has
been restated due to the adoption, starting from 2023, of the equity method allowed by Combination 3, recognising
goodwill, which was previously recognised separately under intangible fixed assets, within the carrying amount of the
participating interest, in line with accounting treatment provided by DAS 140. The financial impact of this change in ac-
counting policies is a reclassification from intangible fixed assets to financial fixed assets for an amount of € 51,788 thou-
sand.
Goodwill arises from the acquisition of subsidiaries and reflects the excess of the acquisition cost over the percentage
attributable to the Company of the fair value of the subsidiaries’ identifiable assets, liabilities and potential liabilities at
the acquisition date. Goodwill is recognised as an asset and undergoes an impairment test on an annual basis, or more
frequently if there are events or changes in the circumstances that may result in impairment losses.
For this purpose, the goodwill, if any, resulting at the acquisition date is allocated to each of the cash generating units
(CGU) which are expected to benefit from the synergy effects deriving from the acquisition. Any loss in value is identified
227
through valuations that are based on the capacity of each unit to produce financial flows capable of recovering the part
of goodwill allocated to it, according to the methods described in the section
Impairment of assets
of the Consolidated
Financial Statements included in this Annual Report.
The increase in Interests in Group companies in 2023 primarily related to the purchase of participations of € 1,091,474
thousand (CENTROTEC Climate Systems GmbH for € 1,024,474 thousand and Atag Heating B.V. for € 67,000 thousand),
the share in profit of participations of € 241,588 thousand and the capital injection into subsidiaries of € 37,096 thousand,
partially offset by dividends received from subsidiaries of € 151,419 thousand and cumulative translation adjustments
and other OCI movements of € 25,149 thousand
With reference to CENTROTEC Climate Systems GmbH, the acquisition from CENTROTEC SE of 100% of the related share
capital was finalized In January 2023 for € 625,838 thousand in cash, plus 41,416,667 Ariston Holding N.V. shares from a
dedicated capital increase.
The increase in Interests in Group companies in 2022 primarily related to the share in profit of participations of € 162,956
thousand, cumulative translation adjustments and other OCI movements of € 25,468 thousand, partially offset by a share
capital reimbursement for € 51,000 thousand from Ariston Benelux S.A./N.V. and dividends received from subsidiaries of
€ 40,443 thousand.
Accounts receivable from participations and other participating interests relates to long-term financial loans of € 32,502
thousand (€ 40,722 thousand at 31 December 2022), consisting of:
•
a loan granted to Ariston Holding USA LLC of USD 13,800 thousand corresponding to € 12,489 thousand expiring in
2025;
•
two loans granted to Ariston Egypt LLC for a total amount of € 7,180 thousand expiring in 2028;
•
a loan granted to Chromagen Israel Ltd. of ILS 24,570 thousand corresponding to € 6,144 thousand expiring in 2027;
•
a loan granted to Chromagen Australia Pty Ltd. of AUD 5,156 thousand corresponding to € 3,310 thousand expiring
in 2028;
•
a loan granted to Ariston South Africa (Pty) Ltd. of ZAR 30,000 thousand corresponding to € 1,474 thousand expiring
in 2025;
•
a loan granted to Ingrado S.r.l. of € 1,000 thousand expiring in 2025;
•
a loan granted to PT Ariston Group Indonesia Ltd. of USD 1,000 thousand corresponding to € 905 thousand expiring
in 2025.
The interest rates are defined in benchmarking the loans against comparable financial transactions between independent
parties on the credit market and applying relevant criteria to enhance the comparability, such as tenor, currency of de-
nomination, the geographies, the industry of the borrowing entity, and the credit rating.
Below the changes during the reporting period:
(in € thousand)
At 1 January
2023
Additions
Repayments
Translation
differences
Reclass.
from cur-
rent as-
sets
At 31
December
2023
Long-term Financial
Loans
40,722
19,932
-21,529
-608
-6,015
32,502
Note 2.4 – Accounts receivable
At 31 December 2023 the accounts receivable was € 261,576 thousand (€ 183,202 thousand at 31 December 2022), with
an increase of € 78,374 thousand mainly related to an increase in shareholders and participating interests for € 78,618
thousand, primarily related to an increase in credits for cash pooling of € 116,015 thousand, only partially offset by a
decrease of other credits for € 49,739 thousand mainly due to the impact of the reimbursement of the share capital
reduction of Ariston Benelux S.A./N.V. The carrying amount of accounts receivable is deemed to approximate their fair
value.
228
The following table summarises the composition:
Accounts receivable
(in € thousand)
31.12.2023
31.12.2022
Change
Trade debtors
27
97
-70
Shareholders and participating interests
215,285
136,667
78,618
Other accounts receivable
43,058
44,421
-1,363
Prepayments and accrued income
3,206
2,017
1,189
Total
261,576
183,202
78,374
Shareholders and participating interests include: trade receivables for € 19,146 thousand (€ 22,187 thousand at 31 De-
cember 2022); corporate tax receivables from Merloni Holding S.p.A. for the domestic tax consolidation scheme of €
15,841 thousand (€ 7,066 thousand at 31 December 2022), credit for dividends for € 1,334 thousand, other credits for €
5,009 thousand (€ 54,748 thousand at 31 December 2022) and financial receivables of € 173,955 thousand (€ 52,666
thousand at 31 December 2022) consisting of:
•
loans granted to participating interests of € 35,426 thousand, consisting of:
o
a loan granted to Ariston France S.a.s. of € 14,500 thousand;
o
a loan granted to Atag Heating B.V. of € 10,800 thousand;
o
two loans granted to PT Ariston Group Indonesia Ltd. of USD 3,000 thousand and USD 2,000 thousand cor-
responding to € 2,715 thousand and € 1,810 thousand;
o
two loans granted to Ariston Thermo Tunisie SA of € 2,000 thousand and € 1,000 thousand;
o
a loan granted to Ariston U.K. Ltd. of GBP 2,000 thousand corresponding to € 2,301 thousand;
o
a loan granted to Ingrado S.r.l. of € 300 thousand;
•
credits for cash pooling of € 136,326 thousand;
•
credits for derivative financial instruments of € 2,203 thousand.
The interest rates are defined in benchmarking the loans against comparable financial transactions between independent
parties on the credit market and applying relevant criteria to enhance the comparability, such as tenor, currency of de-
nomination, the geographies, the industry of the borrowing entity, and the credit rating.
Other accounts receivable mainly relate to:
-
deferred tax assets of € 2,470 thousand (€ 1,326 thousand at 31 December 2022);
-
derivative financial instruments mark-to-market of € 17,033 thousand (€ 34,763 thousand at 31 December
2022), including hedges on commodities for € 157 thousand, interest rates for € 16,454 thousand, and foreign
exchanges for € 422 thousand;
-
VAT credit for the Group consolidation scheme of € 8,902 thousand.
Below are the changes in loans granted to participating interests in the reporting period:
(in € thousand)
At 1 January
2023
Additions
Repayments
Translation
differences
Reclass.
to not-
current
assets
At 31
December
2023
Shareholders and partici-
pating interests – Loans
31,020
4,140
-5,695
-54
6,015
35,426
229
Note 2.5 – Cash
At 31 December 2023, Cash was € 166,967 thousand (€ 678,964 thousand as at 31 December 2022), primarily repre-
sented by amounts held in euro. The carrying amount of Cash is deemed to be in line with its fair value.
The credit risk associated with Cash is considered limited as the counterparties are leading national and international
banks.
Note 3.1 – Equity
Changes in Shareholders' equity during 2023 and 2022 were as follows:
E
(in € thousand)
Share
Capital
Share
Premium
Treasury
Shares
Revalua-
tion
Reserve
Legal
Reserves
Statutory
Reserves
Legal
Reserves:
Other
Cum.
Transla-
tion Adj
Stock-
based
incentive
plans
reserve
OCI and
Other
Reserves
Retained
Earnings
Profit/Los
s for the
period
Total Eq-
uity
At 31 December 2021
46,043
293,731
0
8,202
28,263
250
626
-19,268
24,443
207,742
151,766
136,536
878,334
Allocation of prior year result
136,536
-136,536
0
Net profit for the year
140,259
140,259
Business combinations
0
Current period change in translation
adjustments and OCI, net of taxes
23,892
5,355
14,408
43,655
Dividends
-46,366
-46,366
Legal reserve
-2,945
2,945
0
Share-based payments
19
19,613
-13,012
6,620
Acquisition of treasury shares
-12,547
-12,547
Conversion reserve multiple voting
shares
15,000
-15,000
0
Other changes
-897
897
0
At 31 December 2022
46,062
313,344
-12,547
8,202
25,318
15,250
23,621
-13,913
11,431
223,047
229,881
140,259
1,009,955
Allocation of prior year result
140,259
-140,259
0
Net profit for the year
191,181
191,181
Business combinations
414
397,968
398,382
Current period change in translation
adjustments and OCI, net of taxes
-24,370
24,388
-45,300
-45,282
Dividends
-48,343
-48,343
Legal reserve
5,472
-5,472
0
Share-based payments
6,379
-2,403
1,433
5,409
Acquisition of treasury shares
-8,681
-8,681
Conversion reserve multiple voting
shares
10,000
-10,000
0
Other changes
749
-749
0
At 31 December 2023
46,476
711,312
-14,849
8,202
30,790
25,250
0
10,475
9,028
176,998
307,758
191,181
1,502,621
Shareholders’ equity increased by € 492,666 thousand in 2023, primarily due to the share premium reserve increase of €
397,968 thousand and profit for the year of € 191,181 thousand, net of dividends paid to Shareholders for € 48,343
thousand.
Shareholders’ equity increased by € 131,621 thousand in 2022, primarily due to profit for the year of € 140,259 thousand
and the cash flow hedge reserve increase of € 23,892 thousand, net of dividends paid to Shareholders for € 46,366 thou-
sand and acquisition of treasury shares of € 12,547 thousand.
Share capital
At 31 December 2023 the share capital of Ariston Holding N.V. was € 46,476 thousand, fully paid-up, and represented by
125,505,005 ordinary shares and 22,095,194 non-listed ordinary shares with a nominal value of € 0.01 each, and
225,000,000 multiple voting shares with a nominal value of € 0.20 each.
On 2 January 2023 the share capital was increased by € 414 thousand, in relation to Share-based payment transaction
used as a partial payment method to finalise the total acquisition price of CENTROTEC Climate Systems GmbH.
Share premium reserve
On 2 January 2023 the share premium reserve was increased by € 397,968 thousand, in relation to a Share-based pay-
ment transaction used as a partial payment method to finalise the total acquisition price of CENTROTEC Climate Systems
GmbH, as already indicated above.
230
Treasury shares reserve
In May 2023 Ariston Holding N.V. transferred 762,654 treasury shares to the beneficiaries of the 2020 vested restricted
share units long-term incentive plan for an amount equal to € 6,379 thousand.
In September 2023 Ariston Holding N.V. started a treasury share buyback program to serve the Group’s LTI plans, with a
number of shares to be acquired equal to 1,500,000. The program ended on 27 October 2023 and the total amount of
treasury shares at 31 December 2023 was equal to € 14,849 thousand.
Legal reserves
Pursuant to Dutch law, limitations exist relating to the distribution of shareholders' equity up to at least the total amount
of the legal reserve.
At 31 December 2023, legal reserves amounted to € 30,790 thousand (€ 25,318 thousand at 31 December 2022), related
to capitalised development expenditures recognised by subsidiaries.
Statutory reserves
At 31 December 2023, statutory reserves amounted to € 25,250 thousand (€ 15,250 thousand at 31 December 2022),
with an increase of € 10,000 thousand due to the amount allocated and added in the year to the Conversion Reserve
(reference is made to article 31 of the Company's articles of association), the Company having established a policy on
reservations for the benefit of the Conversion Reserve.
Stock-based incentive plans reserve
Ariston Group adopted stock-based incentive plans under which a combination of restricted share units and, from 2021
plans, performance share units (“PSUs”), each representing the right to receive one Ariston Holding N.V. ordinary share,
have been awarded to the Executive Directors and a selected number of managers. In 2023 the related Stock-based
incentive plans reserve increased by € 5,414 thousand for the competence of the year and decreased by € 7,817 thousand
following the assignment of shares executed for LTI plan 2020.
At 31 December 2023, the Stock-based incentive plans reserve amounted to € 9,028 thousand (€ 11,431 thousand at 31
December 2022), and referred to the following plans:
•
2021: € 6,009 thousand;
•
2022: € 1,967 thousand;
•
2023: € 1,052 thousand.
Settlement of the conversion of performance share units (plan 2021) will take place in the first half of 2024.
Note 3.2 – Provisions
At 31 December 2023, provisions were € 34,903 thousand (€ 32,942 thousand at 31 December 2022).
The following table summarises the composition:
Provisions
(in € thousand)
31.12.2023
31.12.2022
Change
Provision for employee severance indemnity
165
239
-74
Deferred tax liabilities
21,140
22,375
-1,235
Provision for interest in participating companies
13,007
9,853
3,154
Provision for risk
591
475
116
Total
34,903
32,942
1,961
Provision for interest in participating companies of € 13,007 thousand is related to participations in Ariston France S.a.s.
(€ 10,167 thousand), Ariston Maroc SA (€ 2,304 thousand), Ariston Heating Technology Nigeria Ltd. (€ 332 thousand),
Ariston Thermo Argentina S.r.l. (€ 106 thousand), and Instachauf S.a.s. (€ 98 thousand).
The following table shows the changes which occurred during the year:
231
Provisions
Provision for em-
ployee
severance indemnity
Deferred
tax liabilities
Provision for interest
in participating
companies
Provision
for risk
Total
(in €thousand)
As at 31.12.2022
239
22,375
9,853
475
32,942
Increases
462
5,271
7,987
123
13,843
Decreases
-514
-962
-4,862
-7
-6,345
Other
-22
-5,544
29
0
-5,537
Total changes
-74
-1,235
3,154
116
1,961
As at 31.12.2023
165
21,140
13,007
591
34,903
Refer to the consolidated financial statements for related terms and conditions.
Note 3.3 – Long-term debt
At 31 December 2023, long-term debt was € 694,335 thousand (€ 671,063 thousand at 31 December 2022), primarily
composed of debts to lending institutions for € 692,427 thousand (€ 669,105 thousand at 31 December 2022).
Compared to 31 December 2022, the increase in total debt for loans was essentially attributable to new financing taken
out in 2023 with a maturity of debt of 5.6.
Below the details:
(in
€
thousand)
Long-term debt
In 1-5 years
Over 5 years
Debts to lending institutions
692,427
338,991
353,436
Total
692,427
338,991
353,436
Other non-current liabilities of € 1,908 thousand (€ 1,958 thousand at 31 December 2022) are mainly related to a long-
term financial lease to a shareholder and participating interest.
Below the changes during the reporting period:
(in € thousand)
At 1 Janu-
ary 2023
Additions
Repayments
Other
movements
At 31
December
2023
Debts to lending institutions
669,105
295,000
-270,000
-1,678
692,427
Other liabilities
1,958
557
-612
5
1,908
Total
671,063
295,557
-270,612
-1,673
694,335
Note 3.4 – Trade creditors
At 31 December 2023, trade creditors were € 4,446 thousand (€ 4,994 thousand at 31 December 2022).
Trade creditors are due within one year and their carrying amount at the reporting date is deemed to approximate their
fair value.
232
Note 3.5 – Amounts due to shareholders and participating interests
Amounts due to shareholders and participating interests of € 430,141 thousand (€ 221,527 thousand at 31 December
2022) are summarised in the table below:
Amounts due to shareholders and participating interests
(in € thousand)
31.12.2023
31.12.2022
Change
Cash pooling liabilities:
-Wolf GmbH
159,941
0
159,941
-Ariston S.p.A.
59,642
77,285
(17,643)
-Elco International GmbH
42,353
39,093
3,260
-ELCO GmbH
27,530
24,768
2,762
-Thermowatt S.p.A.
22,440
3,834
18,606
-Ariston Benelux S.A./N.V.
22,223
0
22,223
-Elco Italia S.p.A.
10,513
10,893
(380)
-ELCO Austria GmbH
9,461
9,052
409
-Ariston Deutschland GmbH
6,477
7,006
(529)
-Cuenod sas
5,978
7,162
(1,184)
-Ecoflam Bruciatori S.p.A.
5,616
0
5,616
-Ariston Iberica S.L.
5,212
5,358
(146)
-Elco B.V.
2,212
6,971
(4,759)
-Wolf France S.a.s.
2,038
0
2,038
-AR1 S.r.l.
1,425
0
1,425
-Elco Burners B.V.
762
5,329
(4,567)
-Wolf Energiesystemen B.V.
396
0
396
-Wolf Iberica Climatization Y Calefacion SA
359
0
359
-ELCO Belgium S.A./N.V.
0
17
(17)
Cash pooling liabilities
384,578
196,768
187,810
Current derivative financial Instruments
4,092
8,867
(4,775)
Current financial loans:
-NTI Boilers Inc
8,878
9,028
(150)
-Calentadores de America S.A. de C.V.
8,065
0
8,065
-Tasfiye Halinde Ariston Thermo Isıtma ve Soğutma Si-
stemleri İthalat ve İhracat ve Dağıtım Ltd.Şti.
1,700
0
1,700
-Ariston Pte Ltd
0
3,766
(3,766)
Current financial loans
18,643
12,794
5,849
Creditors
5,747
1,981
3,766
Other debits:
Consolidated VAT
1,045
732
313
Other
16,036
385
15,651
Other debits
17,081
1,117
15,964
Total
430,141
221,527
208,614
At 31 December 2023, Cash pooling liabilities consisted of € 384,578 thousand of overdraft as part of the Ariston Group's
centralised treasury management, with an increase of € 187,810 thousand from 31 December 2022.
Current financial loans were composed of the loan granted by NTI Boilers Inc. of CAD 13,000 thousand corresponding to
€ 8,878 thousand, a loan granted by Calentadores de America S.A. de C.V.of MXN 151,000 thousand corresponding to €
8,065 thousand, and a loan granted by Tasfiye Halinde Ariston Thermo Isıtma ve Soğutma Sistemleri İthalat ve İhracat ve
Dağıtım Ltd.Şti. of € 1,700 thousand.
The interest rates are defined in benchmarking the loans against comparable financial transactions between independent
parties on the credit market and applying relevant criteria to enhance the comparability, such as tenor, currency of de-
nomination, the geographies, the industry of the borrowing entity, and the credit rating.
Current derivative financial instruments of € 4,092 thousand were related to the recharge of commodities and interest
rate hedging instruments.
Note 3.6 – Taxes and social security contributions
Taxes and social security contributions of € 1,456 thousand were related to short-term social security payables for € 890
thousand and short-term other tax debts for € 566 thousand.
Note 3.7 – Other liabilities
The following table summarises Other liabilities:
Other liabilities
(in € thousand)
31.12.2023
31.12.2022
Change
Derivative financial instruments
23,950
10,461
13,489
Other financial debts
14,277
3,428
10,849
Other debts
1,666
1,328
338
Group VAT
0
425
-425
Current debts with employees
1,316
1,909
-593
Total
41,209
17,551
23,658
Current derivative financial Instruments of € 23,950 thousand were related for € 19,044 thousand to derivative financial
instruments with negative fair value at 31 December 2023. It related for € 17,037 thousand to hedging contracts and for
€ 2,007 thousand to non-hedging contracts (signed by Ariston Holding N.V. as parent company in the interest of the
subsidiaries, with subsequent recharge of the results of these hedges to the participating companies). The remaining
amount of derivative financial instruments of € 4,906 thousand referred to financial derivatives closed but not yet paid.
For accounting treatment of derivatives financial instruments, refer to section
Derivatives
included elsewhere in this An-
nual Report.
Other liabilities are all due within one year and their carrying amount is deemed to approximate the related fair value.
234
Commitments and risks
The Company reported the following potential liabilities as at the end of the reporting period:
Guarantees issued
At 31 December 2023, guarantees issued were € 116,472 thousand (€ 409,288 thousand at 31 December 2022), wholly
provided on behalf of Group companies, related:
-
for € 102,909 to parent guarantees issued for credit lines and term loans granted by lending institutions;
-
for € 2,000 thousand to other parent guarantees;
-
for € 11,563 thousand to other guarantees.
The main guarantees outstanding at 31 December 2023, were as follows:
Group companies
(in € thousand)
2023
2022
Change
Ariston S.p.A.
77,000
378,750
-301,750
Ariston Climate Solutions D.o.o. Svila-
jnac
8,000
0
8,000
Ariston Thermo Romania S.r.l.
6,532
8,000
-1,468
Ariston Group India Private Limited
4,352
3,402
950
Ariston Vietnam CO. Ltd.
4,000
0
4,000
Wolf HVAC Systems (Shanghai) Co.
Ltd.
3,550
0
3,550
Ariston Ukraine LLC
2,500
2,500
0
Ariston U.K. Ltd.
2,244
676
1,568
Ariston Polska Sp. zo.o.
2,000
0
2,000
Ariston CZ S.r.o.
1,500
0
1,500
Ariston Hungária Kft.
1,500
0
1,500
S.H.E. d.o.o. Svilajnac
1,450
1,152
298
Atmor Industries Ltd.
518
563
-45
BCE S.r.l.
500
496
4
Wolf Technika Grzewcza Sp.zo.o.
398
0
398
Ariston Pte Ltd
311
0
311
Elco Italia S.p.A.
117
118
-1
Ariston Hungária Kft
0
1,500
-1,500
Ariston Pte Ltd.
0
318
-318
Ariston Sales Mexico S.A. de C.V.
0
1,875
-1,875
Ariston Thermo MEA WLL
0
982
-982
Ariston Thermo Tunisie SA
0
1,000
-1,000
Calentadores de America S.A. de C.V.
0
4,688
-4,688
Elco Heating Solutions Ltd.
0
1,466
-1,466
PT Ariston Group Indonesia Ltd.
0
328
-328
Racold Thermo Private Ltd.
0
1,474
-1,474
Total
116,472
409,288
-292,816
The decrease of € 292,816 thousand as compared to 31 December 2022 was mainly due to the guarantees on behalf of
Ariston S.p.A. which saw a decrease of € 301,750 thousand, mainly related to a decrease in parent guarantees issued for
credit lines and term loans granted by lending institutions.
Refer to the consolidated financial statements for related terms and conditions.
Commitments
The commitments outstanding at 31 December 2023, equal to € 90 thousand, referred to the equivalent value of the
payments (USD 100 thousand) of additional shares in an ''Investment company in risk capital (SICAR) provision'' special-
ized in interventions in sectors in which the Group operates, to be carried out when they are called up by the fund man-
agers for the commitment established.
At 31 December 2023, there were no other commitments to be mentioned.
Audit fees
The fees for services provided by the Company’s independent auditors, Ernst & Young Accountants LLP, and its member
firms and/or affiliates, to the Company are broken down as follows:
Audit fees
(in € thousand)
31.12.2023
31.12.2022
Change
Audit fees
456
286
170
Other non-audit services
0
4
-4
Total
456
290
166
The fees for audit services provided in 2023 by Ernst & Young Accountants LLP, and its member firms and/or affiliates,
are equal to € 456 thousand (€ 286 thousand in 2022).
Board remuneration
Detailed information on Board compensation is included in the
Remuneration Report
section of this report.
Proposal for the appropriation of profits
The appropriation of profits will be determined in accordance with article 32 of the Articles of Association of Ariston
Holding N.V.
The total amount of the dividend distributed and, consequently, the residual amount of the profits carried forward, will
vary according to the number of shares entitled, and these amounts will be defined when the dividend is actually paid on
the basis of the shares outstanding at the coupon detachment date.
In view of the above, it is proposed to:
•
approve the financial statements for the year ending 31 December 2023;
•
to allocate the profits realised during the financial year of € 191.181.018 as follows:
i.
to appropriate the amount of € 123,557 thousand (calculated on the basis of the proposal of dividend ratio
below) to increase the Retained Earnings reserve and other reserves;
ii.
to appropriate the amount of € 4,662 thousand to accrue the Reserve Italian Law 29 December 2022 no.197,
article 1 clauses
87-95;
iii.
to distribute the remaining part of € 62,962 thousand (for information purposes, based on the 370,362,853
shares entitled) as dividend to be paid in the ratio of € 0.17 per share for the year 2023, gross of withholding
taxes, that represents a pay-out ratio equal to 33%;
•
to pay the above dividend on 22 May 2024 (with an ex-coupon date of 20 May 2024 in accordance with the Italian
Stock Exchange calendar, and a record date of 21 May 2024).
The Board resolved to convene the annual general meeting to be held on 6 May 2024.
Subsequent events
Regarding subsequent events evaluated by the Group, refer to section
Subsequent events
included elsewhere in this
Annual Report.
236
5 March 2024
The Board
Paolo Merloni
Maurizio Brusadelli
Antonia Di Bella
Roberto Guidetti
Laurent Jacquemin
Guido Krass
Francesco Merloni
Maria Francesca Merloni
Lorenzo Pozza
Ignazio Rocco di Torrepadula
Marinella Soldi
Enrico Vita
Other information
Additional information on Dutch corporate governance
Independent Auditor’s Report
The report of the Company’s independent auditor, Ernst & Young Accountants LLP, the Netherlands, is set forth following
this Annual Report.
Profits appropriation
Dividends will be determined in accordance with article 32 of the articles of association of the Company. The relevant
provisions of the Articles of Association read as follows:
Appropriation of profits
Article 32
32.1. The Board may decide that the profits realised during a financial year are fully or partially appropriated to increase
or form reserves.
32.2. The profits of the Company remaining after application of Article 32.1 shall be put at the disposal of the General
Meeting. The Board shall make a proposal for that purpose. A proposal to pay a dividend shall be dealt with as a
separate agenda item at the General Meeting.
32.3. The Shareholders will share in the (profit) distribution in proportion to the aggregate number of the Shares (either
Ordinary Shares, Non-Listed Ordinary Shares and/or Multiple Voting Shares) held by each of them.
32.4. The Company's policy on reserves and dividends shall be determined and can be amended by the Board.
32.5. The Company may distribute profits to Shareholders and other persons eligible to receive any share of the distribut-
able profits only insofar as the Company's shareholders' equity, reduced by the amount of the distribution, will not
be smaller than the paid-up and claimed part of the Company's shareholders’ capital, increased by the reserves
which must be maintained under these Articles and by Dutch law.
32.6. Profits will be distributed after confirmation of the Annual Accounts, evidencing this to be permissible.
32.7. The Company may only make interim (profit) distributions to the extent that the provisions as set out in Article 32.5
have been complied with as evidenced by an interim specification of assets and liabilities. Such interim specification
of assets and liabilities will relate to the position of the equity of the Company at the earliest as at the first day of the
third month prior to the month in which the resolution providing for payment is announced. It will be drawn up with
due observance of valuation methods deemed acceptable under generally accepted standards. The specification of
assets and liabilities will include the amounts to be allocated to the reserves in accordance with Dutch law or these
Articles. It shall be signed by the Directors; if the signature of one or several of them is missing, the reason thereof
shall be stated. The Company shall file the specification of assets and liabilities with the office of the Dutch trade
register within eight days after the resolution to make payment available is announced.
32.8. With due observance of the provisions of Article 32.5, the General Meeting, on a proposal of the Board, may adopt
resolutions for distributions to the charge of the Company's reserves that do not need to be kept pursuant to these
Articles or Dutch law.
Disclosures pursuant to decree article 10 EU-Directive on takeovers
In accordance with the Dutch Takeover Directive (Article 10) Decree (
Besluit artikel overnamerichtlijn
, the "Decree"), the
Company makes the following disclosures:
a)
At 31 December 2023, the issued share capital of the Company consisted of 125,505,005 ordinary shares and
22,095,194 non-listed ordinary shares with a nominal value of € 0.01 each, jointly representing 3.18% of the aggre-
gate issued share capital, and 225,000,000 multiple voting shares with a nominal value of € 0.20 each, representing
96.82% of the aggregate issued share capital.
238
For information on the rights attached to ordinary shares, non-listed ordinary shares and multiple voting shares,
reference is made to the articles of association which can be found on the Company's website. To summarise, the
rights attaching to ordinary shares, non-listed ordinary shares and multiple voting shares comprise pre-emptive
rights upon the issue of shares, the right to attend the general meetings of the Company and to speak and vote at
such meetings and to resolve on and the entitlement to the distribution of such amount of the Company's profit as
remains after allocation to the reserves. Ordinary shares, non-listed ordinary shares and multiple voting shares rank
pari passu
and will have equal rights and obligations with respect to all matters, including profit distributions, with
the exceptions as set out in the articles of association, including the entitlement to voting rights as set out in article
26.1 of the articles of association, the conversion reserve and the liquidation distribution referred to in article 36.3
of the articles of association.
b)
The Company has imposed no limitations on the transfer of ordinary shares and non-listed ordinary shares. Article
16 of the articles of association provides for transfer restrictions for multiple voting shares (right of first refusal). If
a holder of multiple voting shares intends to transfer to any third party (be it a shareholder or not) one or more
multiple voting shares, the other holders of multiple voting shares shall have the right, in accordance with the
procedure outlined in article 16 of the articles of association, to exercise a right of first refusal.
c)
For information on participations in the capital of the Company for which a disclosure obligation exists under Sec-
tions 5:34, 5:35 and 5:43 of the Dutch Financial Supervision Act (
Wet op het financieel toezicht
), please see "Major
shareholders" in the Corporate Governance report. There you will find a list of shareholders who are known to the
Company to have holdings of 3% or more at the stated date.
d)
No special control rights or other rights accrue to shares in the capital of the Company other than that a multiple
voting share confers the right to cast 20 votes, subject to a voting threshold, all in accordance with the terms and
conditions as set out in article 26.1 of the articles of association. Reference is made to "Share capital and general
meeting", subparagraph "Voting rights and adoption of resolutions" in the Corporate Governance report.
e)
A mechanism for verifying compliance with a scheme allowing employees to subscribe for or to acquire shares in
the capital of the Company or a subsidiary if the employees do not arrange for such verification directly is not
applicable to the Company.
f)
No restrictions apply to voting rights attached to the shares in the capital of the Company, nor are there any dead-
lines for exercising voting rights other than the restriction of the number of votes that may be cast on multiple
voting shares as set out in article 26.1 of the articles of association describing the voting threshold and further
explained in "Share capital and general meeting", subparagraph "Voting rights and adoption of resolutions" in the
Corporate Governance report. Except by virtue of the different voting rights attached to the ordinary shares and
non-listed ordinary shares (one vote per share) and the multiple voting shares (20 votes per share, subject to the
application of a voting threshold), none of the shareholders will have any voting rights different from any other
shareholders.
g)
The Company is not aware of the existence of any agreements with shareholders of the Company which may result
in restrictions on the transfer of shares or limitation or voting rights, other than (a) a shareholders' agreement
between Merloni Holding S.p.A. and Amaranta S.r.l entered into on 26 October 2021 and (b) lock-up provisions
included in the agreement for the sale and purchase of CENTROTEC Climate Systems GmbH entered into between
CENTROTEC SE and Ariston Holding N.V. on 15 September 2022.
The shareholders’ agreement provides as follows:
(i)
Merloni Holding S.p.A. shall procure that one person indicated by Amaranta S.r.l. is appointed as director
so long as Amaranta S.r.l. holds at least 7% of the issued share capital of the Company;
(ii)
should Merloni Holding S.p.A.:
a.
decide to sell a number of multiple voting shares so that it loses control over the Company, then
Amaranta S.r.l. will be entitled to tag its multiple voting shares to the sale of multiple voting shares
held by Merloni Holding S.p.A.;
b.
receive an offer for the entirety of the outstanding multiple voting shares, then Merloni Holding S.p.A.
will be entitled to drag along the multiple voting shares held by Amaranta S.r.l.;
(iii)
Merloni Holding S.p.A. shall be entitled to acquire from Amaranta S.r.l. 6,000,000 multiple voting shares in
exchange for the same amount of ordinary shares by virtue of a call option; and
(iv)
each of Merloni Holding S.p.A. and Amaranta S.r.l. shall inform the other party in case it wishes to convert
239
its multiple voting shares into ordinary shares.
Pursuant to the lock-up provisions included in the sale and purchase agreement, CENTROTEC SE may not transfer
the 41,416,667 ordinary shares (of which 22,095,194 non-listed ordinary shares) it holds in the capital of the Com-
pany following the sale of CENTROTEC Climate Systems GmbH until 2 January 2024 and may not transfer more than
20,708,332 ordinary shares until 2 January 2025.
h)
The rules governing the appointment and dismissal of directors are stated in the articles of association. All directors
are appointed by the general meeting. The Board nominates a candidate for each vacant seat. A nomination by the
Board will be binding as described under "Board" in the Corporate Governance report. Directors are appointed for
a period of time to be determined by the general meeting, ending not sooner than immediately after the general
meeting held in the first year after the year of their appointment and not later than immediately after the general
meeting held in the fourth year after the year of their appointment.
i)
The articles of association allow the Company to cooperate in the issuance of registered depositary receipts for
shares, but only pursuant to a resolution to that effect by the Board. No depositary receipts having been issued for
shares in its capital with the cooperation of the Company.
The general meeting may at any time dismiss or suspend any director. If the Board proposes the dismissal of a
director to the general meeting, the general meeting can resolve upon such dismissal by resolution adopted by an
absolute majority of the votes cast.
If the Board has not made a proposal for the dismissal of a director, the general meeting can only resolve upon the
dismissal of the director by resolution adopted by an absolute majority of the votes cast, representing more than
half of the issued capital of the Company. Executive directors may at all times also be suspended by the Board. A
resolution of the Board to suspend the Executive Chair must be adopted with a majority of two thirds of the votes
cast in a meeting where all directors, other than the Executive Chair, are present or represented. If either the Board
or the general meeting has resolved upon a suspension of a director, the general meeting shall within three months
after the suspension has taken effect, resolve either to dismiss such director with due observance of the provisions
in the articles of association, or to terminate or continue the suspension, failing which the suspension shall lapse.
A resolution to continue the suspension may be adopted only once and in such event the suspension may be con-
tinued for a maximum period of three months commencing on the day that the general meeting has adopted the
resolution to continue the suspension. If the general meeting has not decided to terminate or to continue the
suspension within the required period, the suspension shall lapse.
The rules governing an amendment of the articles of association are included in article 35 of the articles of associ-
ation and require a resolution of the general meeting, but only on a proposal by the Board. The prior approval of
the meeting of holders of multiple voting shares is required for an amendment of a provision in relation to the
multiple voting shares and/or the rights and/or the obligations of the (meeting of) holders of multiple voting shares.
j)
The general powers of the Board are stated in article 18 of the articles of association. Pursuant to article 21.1 of
the articles of association, the general authority to represent the Company is vested in the Board and the Executive
Chair. The Board has granted specific representation powers to Maurizio Brusadelli, in his capacity as Chief Execu-
tive Officer of the Company.
According to article 7.1 of the articles of association, the Board will be the competent corporate body to issue the
shares for a period of five years with effect from 19 December 2022. The Board is also authorised to limit or exclude
pre-emptive rights of shareholders on any issue of shares or grant rights to subscribe for shares, for the same term.
After the five-year term, shares may be issued pursuant to a resolution of the general meeting unless the Board is
designated to do so by the general meeting. Such designation can be made each time for a maximum period of five
years and can be extended each time for a maximum period of five years. A designation must determine the num-
ber of shares of each class concerned which may be issued pursuant to a resolution of the Board. The resolution of
the general meeting to designate the Board as the body authorised to issue shares cannot be withdrawn by the
general meeting, unless otherwise provided in the authorisation. The body resolving to issue shares must deter-
mine the issue price and the other conditions of issuance in the resolution to issue. After the five- year term, pre-
emptive rights may be restricted or excluded by a resolution of the general meeting. The general meeting may
designate this competence to the Board for a period not exceeding five years, provided that the general meeting
has also authorised the Board to issue shares. Unless otherwise stipulated at its grant, this authorisation cannot be
withdrawn.
240
The Company is entitled to acquire fully paid-up shares in its capital. The terms and conditions for the acquisition
of shares by the Company in its capital are set out in article 10 of the articles of association.
k)
The Company is not a party to any significant agreements which will take effect, will be altered or will be terminated
upon a change of control of the Company as a result of a public offer within the meaning of section 5:70 of the
Dutch Financial Supervision Act (
Wet op het financieel toezicht
), unless certain of the loan agreements entered into
by the Company contain clauses that, as is customary for financing agreements of similar type, may require early
repayment or termination in the event of a change of control of the Company.
The Company did not enter into any agreement with a director or employee of the Company providing for a pay-
ment upon the termination of employment as a result of a public offer within the meaning of section 5:70 of the
Dutch Financial Supervision Act (
Wet op het financieel toezicht)
.
8. Other Information
Independent auditor’s report
To: the shareholders and audit committee of Ariston Holding N.V.
Report on the audit of the financial statements 2023 included in
the annual report
Our opinion
We have audited the financial statements 2023 of Ariston Holding N.V. based in Amsterdam, the Netherlands.
The financial statements comprise the consolidated and company financial statements.
In our opinion:
•
The accompanying consolidated financial statements give a true and fair view of the financial position of
Ariston Holding N.V. as at 31 December 2023 and of its result and its cash flows for 2023 in accordance
with International Financial Reporting Standards as adopted by the European Union
(EU-IFRSs) and with Part 9 of Book 2 of the Dutch Civil Code
•
The accompanying company financial statements give a true and fair view of the financial position of Aris-
ton Holding N.V. as at 31 December 2023 and of its result for 2023 in accordance with Part 9 of Book 2 of
the Dutch Civil Code
The consolidated financial statements comprise:
•
The consolidated statement of financial position as at 31 December 2023
•
The following statements for 2023: the consolidated income statement, the consolidated statement of other
comprehensive income, the consolidated statement of cash flows and the consolidated statement of
changes in shareholders’ equity
•
The notes comprising material accounting policy information and other explanatory information
The company financial statements comprise:
•
The company statement of financial position as at 31 December 2023
•
The company income statement for 2023
•
The notes comprising a summary of the material accounting policy information and other explanatory infor-
mation
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our respon-
sibilities under those standards are further described in the Our responsibilities for the audit of the financial
statements section of our report.
242
We are independent of Ariston Holding N.V. (the company) in accordance with the EU Regulation on specific
requirements regarding statutory audit of public-interest entities, the Wet toezicht accountantsorganisaties
(Wta, Audit firms supervision act), the Verordening inzake de onafhankelijkheid van accountants bij assurance-
opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and
other relevant independence regulations in the Netherlands. Furthermore, we have complied with the Veror-
dening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opin-
ion.
Information in support of our opinion
We designed our audit procedures in the context of our audit of the financial statements as a whole and in
forming our opinion thereon. The following information in support of our opinion and any findings were ad-
dressed in this context, and we do not provide a separate opinion or conclusion on these matters.
Our understanding of the business
Ariston Holding N.V. and its subsidiaries are a global group primarily active in the business of the production
and distribution of thermal comfort and water and space heating solutions
.
The group is structured in compo-
nents and we tailored our group audit approach accordingly. We paid specific attention in our audit to a num-
ber of areas driven by the operations of the group and our risk assessment.
On 2 January 2023 the company completed the acquisition of Centrotec Climate Systems GmbH (hereinafter:
Centrotec). For further details we refer to our section Key audit matters.
We determined materiality and identified and assessed the risks of material misstatement of the financial state-
ments, whether due to fraud or error in order to design audit procedures responsive to those risks and to ob-
tain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
Materiality
Materiality
€23 million (2022: €9.5 million)
Benchmark applied
Approximately 0.75% of revenues
Explanation
Last year we considered profit before taxes as the appropriate basis for deter-
mining our materiality, because the users of the financial statements of profit
oriented entities tend to focus on operational performance.
Given that the Group is active in a listed environment for a couple of years,
made a significant growth due to an acquisition in the current year and com-
bined with the available communication towards the financial markets and other
stakeholders, we have identified that the Group highlights performance primar-
ily in terms of revenues for showing growth. Next to profitability, investors also
focus on volumes and future growth of revenues of the Group.
Accordingly, we changed our measurement basis from profit before tax to reve-
nues, as it is considered an important and stable indicator for the users of the fi-
nancial statements.
We have also taken into account misstatements and/or possible misstatements that in our opinion are material
for the users of the financial statements for qualitative reasons.
We agreed with the audit committee that misstatements in excess of €1.15 million, which are identified during
the audit, would be reported to them, as well as smaller misstatements that in our view must be reported on
qualitative grounds.
243
Scope of the group audit
Ariston Holding N.V. is at the head of a group of entities. The financial information of this group is included in
the consolidated financial statements.
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and
performing the group audit. In this respect we have determined the nature and extent of the audit procedures
to be carried out for group entities. Decisive were the size and/or the risk profile of the group entities or opera-
tions. On this basis, we selected group entities for which an audit or review had to be carried out on the com-
plete set of financial information or specific items.
Our group audit mainly focused on significant group entities. Group entities are considered significant compo-
nents either because of their individual financial significance or because they are likely to include significant
risks of material misstatement due to their specific nature or circumstances. All group entities (of which 35 full
scopes, 9 specific scopes and 12 limited scopes) were included in the scope of our group audit and 35 compo-
nents have been subject to risk-based analytics.
In establishing the overall approach to the audit, we determined the type of work that is needed to be done by
us, as group auditors, or by component auditors from Ernst & Young Global member firms operating under our
instructions. The group audit team audited the group consolidation, financial statements and disclosures. We
combined remote working with a site visit approach and as a result were able to visit management and compo-
nent auditors in Italy, Germany and the Netherlands as the most significant components reside here. For all
entities in scope, we shared detailed instructions with the component auditors, had regular conferencing calls
with the component auditors and we reviewed their deliverables.
In total these procedures represent 94% of the group’s total assets, 99% of EBIT and 95% of net revenues.
244
Total assets
EBIT
Net revenues
Full scope
Specific scope
Limited scope
Risk-based analytics
By performing the procedures mentioned above at components of the group, together with additional proce-
dures at group level, we have been able to obtain sufficient and appropriate audit evidence about the group’s
financial information to provide an opinion on the consolidated financial statements.
Teaming and use of specialists
We ensured that the audit teams both at group and at component level included the appropriate skills and
competences which are needed for the audit of a listed client in the heating industry. We included specialists
in the areas of IT audit, forensics, sustainability, treasury and income tax and have made use of our own ex-
perts in the areas of valuations and actuaries.
Our focus on climate-related risks and the energy transition
Climate change and the energy transition are high on the public agenda. Issues such as CO
2
reduction impact
financial reporting, as these issues entail risks for the business operation, the valuation of assets (stranded as-
sets) and provisions or the sustainability of the business model and access to financial markets of companies
with a larger CO
2
footprint.
Management summarized Ariston Holding N.V.’s commitments and obligations, and reported these in Section
5. Governance of the board report how the company is addressing climate-related and environmental risks.
As part of our audit of the financial statements, we evaluated the extent to which climate-related risks and the
effects of the energy transition and the company’s commitments and (constructive) obligations are taken into
account in estimates and significant assumptions, especially in the area of impairment of goodwill, as well as in
the design of relevant internal control measures. Furthermore, we read the board report and considered
whether there is any material inconsistency between the non-financial information in Section 5. Governance
and the financial statements.
Based on the audit procedures performed, we do not deem climate-related risks to have a material impact on
the financial reporting judgments, estimates or significant assumptions as at
31 December 2023.
245
Our focus on fraud and non-compliance with laws and regulations
Our responsibility
Although we are not responsible for preventing fraud or non-compliance and we cannot be expected to detect
non-compliance with all laws and regulations, it is our responsibility to obtain reasonable assurance that the
financial statements, taken as a whole, are free from material misstatement, whether caused by fraud or error.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from er-
ror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of inter-
nal control.
Our audit response related to fraud risks
We identified and assessed the risks of material misstatements of the financial statements due to fraud. During
our audit we obtained an understanding of the company and its environment and the components of the sys-
tem of internal control, including the risk assessment process and management’s process for responding to
the risks of fraud and monitoring the system of internal control and how the control and risk committee exer-
cises oversight, as well as the outcomes.
We refer to Section 5.2 Non-Financial Disclosure of the Governance report for management’s (fraud) risk as-
sessment.
We evaluated the design and relevant aspects of the system of internal control and in particular the fraud risk
assessment, as well as the code of conduct, whistleblower procedures and incident registration. We evaluated
the design and the implementation and, where considered appropriate, tested the operating effectiveness of
internal controls designed to mitigate fraud risks.
As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to financial report-
ing fraud, misappropriation of assets and bribery and corruption in close co-operation with our forensic spe-
cialists. We evaluated whether these factors indicate that a risk of material misstatement due to fraud is pre-
sent.
We incorporated elements of unpredictability in our audit. We also considered the outcome of our other audit
procedures and evaluated whether any findings were indicative of fraud or non-compliance.
We addressed the risks related to management override of controls, as these risks are present in all compa-
nies. For these risks we have performed procedures among others to evaluate key accounting estimates for
management bias that may represent a risk of material misstatement due to fraud, in particular relating to im-
portant judgment areas and material accounting estimates as disclosed in Note 4 subsection xxi to the finan-
cial statements. We have also used data analysis to identify and address
high-risk journal entries and evaluated the business rationale (or the lack thereof) of significant extraordinary
transactions, including those with related parties.
246
The following fraud risks identified required significant attention during our audit.
Presumed risks of fraud in revenue recognition
Fraud risk
We presumed that there are risks of fraud in revenue recognition. We evaluated that reve-
nues from the divisions Thermal Comfort, Burners and Components in particular give rise to
such risks. These three divisions consist of four revenue streams, being Professional, DIY (Do
it yourself), Business-to-Business and Service.
We describe the details of the fraud risk in the description of the key audit matter:
Risk of improper Revenue Recognition.
Our audit
approach
We describe the audit procedures responsive to the presumed risk of fraud in revenue recog-
nition in the description of our audit approach for the key audit matter:
Risk of improper Revenue Recognition.
We considered available information and made enquiries of relevant executives, directors, legal, compliance,
human resources, regional directors and the audit committee.
The fraud risks we identified, enquiries and other available information did not lead to specific indications for
fraud or suspected fraud potentially materially impacting the view of the financial statements.
Our audit response related to risks of non-compliance with laws and regulations
We performed appropriate audit procedures regarding compliance with the provisions of those laws and regu-
lations that have a direct effect on the determination of material amounts and disclosures in the financial state-
ments. Furthermore, we assessed factors related to the risks of non-compliance with laws and regulations that
could reasonably be expected to have a material effect on the financial statements from our general industry
experience, through discussions with the board of directors, reading minutes, inspection of compliance reports
and performing substantive tests of details of classes of transactions, account balances or disclosures.
We also inspected lawyers’ letters and correspondence with regulatory authorities and remained alert to any
indication of (suspected) non-compliance throughout the audit. Finally, we obtained written representations
that all known instances of non-compliance with laws and regulations have been disclosed to us.
Our audit response related to going concern
As disclosed in section Going concern in Note 3 subsection i to the financial statements, the financial state-
ments have been prepared on a going concern basis. When preparing the financial statements, management
made a specific assessment of the company’s ability to continue as a going concern and to continue its opera-
tions for the foreseeable future.
247
We discussed and evaluated the specific assessment with management exercising professional judgment and
maintaining professional skepticism. We considered whether management’s going concern assessment, based
on our knowledge and understanding obtained through our audit of the financial statements or otherwise, con-
tains all relevant events or conditions that may cast significant doubt on the company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our audi-
tor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to mod-
ify our opinion.
Based on our procedures performed, we did not identify material uncertainties about going concern. Our con-
clusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause a company to cease to continue as a going concern.
Our key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements. We have communicated the key audit matters to the audit committee. The key audit
matters are not a comprehensive reflection of all matters discussed. Following the acquisition, a new key audit
matter Improper accounting related to Centrotec acquisition and underlying Purchase Price Accounting has
been identified.
Risk of improper revenue recognition
Risk
Revenue is one of the key indicators of the company’s performance and considered a fo-
cus of the users of the financial statements.
We considered the following aspects as part of our assessment of the fraud risk in regard
to the three divisions Thermal Comfort (TC), Burners (BUR) and Components (COM):
•
High volume of sales transactions
•
Different revenue streams
•
The year-end bonuses arrangements (YEBs)
•
The management adjustments on cut-off at year-end
•
Other manual journal entries
As mentioned in the section Our audit response related to fraud risks above, we identified
a fraud risk to record primarily revenues and/or other areas impacting earnings in order to
achieve its targets through manual journal entries recorded at or near period-end.
Given the focus of users of the financial statements and the identified fraud risks, we con-
sider improper revenue recognition a key audit matter.
Financial statement disclosures related to revenue recognition are reported in Note 4 sub-
section xxi and subsection xvi and Note 6.1 subsection 1.1.
Our audit ap-
proach
The procedures designed to address the matter in our audit included, amongst others:
•
We have obtained an understanding of the significant classes of transactions impacting
revenue (including the manual journals thereof) and performed walkthroughs of each in
order to confirm our understanding of revenue streams.
•
We have verified if a consistent revenue recognition methodology (IFRS 15) with prior
year was applied.
•
We have made inquiries of management.
•
We have performed analytical review procedures and performed a test of detail as to
revenue recorded near or close to period-end.
•
We have performed a test of detail for a sample of year-end bonus contracts to verify
the proper application of the contract conditions in issuing related credit memos.
248
Risk of improper revenue recognition
•
We have performed tests of manual journal entries recorded to verify appropriate busi-
ness rationale, and proper authorization and documentation of approval.
•
We have audited manual journal entries made by people who are entitled to the man-
agement bonus scheme (MBO) and/or long term incentive plan (LTI) to verify appropri-
ate business rationale and documentation of approval.
Lastly, we assessed the adequacy, included in Note 4 subsection xvi and subsection xxi
and Note 6.1 subsection 1.1 of the disclosures in the explanatory notes to the consolidated
financial statements.
Key observa-
tions
Based on the audit procedures performed, we did not identify inappropriate manual jour-
nal entries made nor any material misstatements in the revenue reported.
Improper accounting related to Centrotec acquisition and underlying
Purchase Price Accounting
Risk
As at 2 January 2023 the Group completed the acquisition of Centrotec, after having re-
ceived all necessary approvals. The total consideration paid by the company at the closing
date was €1,024.5 million. In 2023, the company finalized the purchase price allocation of
the net identifiable tangible and intangible assets acquired and liabilities assumed based
on their fair values. Goodwill, for the amount of €587.6 million, was calculated as the ex-
cess of the consideration transferred over the net assets acquired. Auditing the company’s
accounting of the acquired intangible assets of Centrotec was complex, due to significant
estimation uncertainty in determining the fair value of identified intangible assets of ap-
proximately €329.1 million, which primarily consisted of customer relationships, brand-re-
lated assets and
technology-related assets as these values include subjective factors.
Due to the significance and complexity of the identification of assets and liabilities for this
transaction, we consider this a key audit matter.
The company has disclosed the acquisition in Note 2.1.1 of the financial statements.
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Improper accounting related to Centrotec acquisition and underlying
Purchase Price Accounting
Our audit ap-
proach
The procedures designed to address the matter in our audit included, amongst others:
•
We obtained an understanding of the purchase price process, and evaluated the de-
sign of controls in this area relevant to our audit.
•
We reviewed the transaction agreements, meeting minutes and verified the underlying
documentation for the consideration transferred.
•
We evaluated if the accounting method applied is consistent and in compliance with
IFRS 3.
•
EY valuation specialist assisted us with the determination and valuation of the identifia-
ble assets and liabilities in compliance with IFRS 13 and IAS 38.
•
We performed substantive audit procedures that included, among others, assessing
the appropriateness of the valuation methodologies used and testing the significant as-
sumptions used in the valuation model, including the completeness and accuracy of
the underlying data.
•
We performed detailed audit procedures on the existence and completeness of the as-
sets and liabilities identified as part of the acquisition.
Lastly, we assessed the adequacy, included in Note 2.1.1 of the disclosures in the explana-
tory notes to the consolidated financial statements.
Key observa-
tions
Based on the procedures performed, we concluded the acquisition accounting of Centro-
tec and the underlying Purchase Price Allocation is materially correct.
Report on other information included in the annual report
The annual report contains other information in addition to the financial statements and our auditor’s report
thereon. The other information consists of:
•
The board report (which consists of the Sections 2, 3, 4 and 5 of the annual report) for the year ended 31
December 2023
•
Other information as required by Part 9 of Book 2 of the Dutch Civil Code
Based on the following procedures performed, we conclude that the other information:
•
Is consistent with the financial statements and does not contain material misstatements
•
Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the board report and
the other information as required by Part 9 of Book 2 of the Dutch Civil Code and as required by Sections
2:135b and 2:145 subsection 2 of the Dutch Civil Code for the remuneration report
We have read the other information. Based on our knowledge and understanding obtained through our audit
of the financial statements or otherwise, we have considered whether the other information contains material
misstatements. By performing these procedures, we comply with the requirements of Part 9 of Book 2 and
Section 2:135b subsection 7 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures
performed is substantially less than the scope of those performed in our audit of the financial statements.
250
Management is responsible for the preparation of the other information, including the board report in accord-
ance with Part 9 of Book 2 of the Dutch Civil Code and other information required by Part 9 of Book 2 of the
Dutch Civil Code. Management and the audit committee are responsible for ensuring that the remuneration
report is drawn up and published in accordance with Sections 2:135b and 2:14 subsection 2 of the Dutch Civil
Code.
Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the general meeting as auditor of Ariston Holding N.V. on 28 May 2021, as of the audit
for the year 2021 and have operated as statutory auditor ever since that date.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on spe-
cific requirements regarding statutory audit of public-interest entities.
European Single Electronic Reporting Format (ESEF)
Ariston Holding N.V. has prepared the annual report in ESEF. The requirements for this are set out in the Dele-
gated Regulation (EU) 2019/815 with regard to regulatory technical standards on the specification of a single
electronic reporting format (hereinafter: the RTS on ESEF).
In our opinion the annual report prepared in the XHTML format, including the (partially) marked-up consoli-
dated financial statements as included in the reporting package by Ariston Holding N.V., complies in all mate-
rial respects with the RTS on ESEF.
Management is responsible for preparing the annual report, including the financial statements, in accordance
with the RTS on ESEF, whereby management combines the various components into a single reporting pack-
age.
Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting
package complies with the RTS on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard 3950N, “Assurance-
opdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal verantwoordingsdocument”
(assurance engagements relating to compliance with criteria for digital reporting). Our examination included
amongst others:
•
Obtaining an understanding of the entity’s financial reporting process, including the preparation of the re-
porting package
•
Identifying and assessing the risks that the annual report does not comply in all material respects with the
RTS on ESEF and designing and performing further assurance procedures responsive to those risks to pro-
vide a basis for our opinion, including:
•
Obtaining the reporting package and performing validations to determine whether the reporting pack-
age containing the Inline XBRL instance document and the XBRL extension taxonomy files, has been
prepared in accordance with the technical specifications as included in the RTS on ESEF
•
Examining the information related to the consolidated financial statements in the reporting package to
determine whether all required mark-ups have been applied and whether these are in accordance with
the RTS on ESEF
251
Description of responsibilities regarding the financial statements
Responsibilities of management and the audit committee
for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with EU-IFRSs Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such in-
ternal control as management determines is necessary to enable the preparation of the financial statements
that are free from material misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, management is responsible for assessing the company’s
ability to continue as a going concern. Based on the financial reporting framework mentioned, management
should prepare the financial statements using the going concern basis of accounting unless management ei-
ther intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. Man-
agement should disclose events and circumstances that may cast significant doubt on the company’s ability to
continue as a going concern in the financial statements.
The audit committee is responsible for overseeing the company’s financial reporting process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and
appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not de-
tect all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements. The materiality affects the nature, timing and extent of our audit procedures and the eval-
uation of the effect of identified misstatements on our opinion.
We have exercised professional judgment and have maintained professional skepticism throughout the audit,
in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. The
Information in support of our opinion section above includes an informative summary of our responsibilities
and the work performed as the basis for our opinion.
Our audit further included among others:
•
Performing audit procedures responsive to the risks identified, and obtaining audit evidence that is suffi-
cient and appropriate to provide a basis for our opinion
•
Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the company’s internal control
•
Evaluating the appropriateness of accounting policies used and the reasonableness of accounting esti-
mates and related disclosures made by management
•
Evaluating the overall presentation, structure and content of the financial statements, including the disclo-
sures
•
Evaluating whether the financial statements represent the underlying transactions and events in a manner
that achieves fair presentation
Communication
We communicate with the audit committee regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant findings in internal control that we identify dur-
ing our audit.
In this respect we also submit an additional report to the audit committee in accordance with Article 11 of the
EU Regulation on specific requirements regarding statutory audit of public-interest entities. The information
included in this additional report is consistent with our audit opinion in this auditor’s report.
252
We provide the audit committee with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasona-
bly be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the audit committee, we determine the key audit matters: those matters
that were of most significance in the audit of the financial statements. We describe these matters in our audi-
tor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, not communicating the matter is in the public interest.
Rotterdam, 5 March 2024
Ernst & Young Accountants LLP
signed by A.M. Buijs
