the separate financial statements, which we submit for your review and approval, present in 2022 “Total revenues” of Euro 694.3 million and a net profit of Euro 15.9 million, after current and deferred taxes for a net total of Euro 3.6 million.

The Board of Directors of the parent company Aquafil S.p.A., in accordance with the accounting rules, prepared also the Aquafil Group financial statements for 2022, which present “Total revenues” of Euro 684.1 million and a Group net profit of Euro 29.1 million.

Both financial statements were prepared in accordance with international accounting standards issued by the International Accounting Standards Board (IASB), endorsed by the European Union as required by Regulation No. 1606/2002 issued by the European Parliament and European Council and adopted with Legislative Decree No. 38/2005.

1 INTRODUCTION

The Parent Company Aquafil S.p.A. availed of the option contained in Legislative Decree 32/2007 which permits companies which must prepare consolidated financial statements to present a single Directors’ Report for the separate and consolidated financial statements and therefore greater attention was focused in the Report, where appropriate, on the most significant matters concerning the companies included in the consolidation scope.

In accordance with Directive 2014/95/EU and as required by Italian Legislative Decree No. 254/2016, the consolidated non-financial report (NFR) is published separately from this Directors’ Report.

Registered Office: Via Linfano, 9 - Arco (TN) - 38062 - Italy

Telephone: +39 0464 581111- Fax: +39 0464 532267

Certified e-mail:[email protected]

E-mail: [email protected]

Website: www.aquafil.com

Share capital (at the approval date of the financial statements at 31.12.2022):

• Approved: 50,522,417.18

• Subscribed: 49,722,417.28

• Paid-in: 49,722,417.28

Tax and VAT number: IT 09652170961

Trento Economic & Administrative Registration No. 228169

There are no changes relating to the name of the entity preparing the financial statements or other means of identification with respect to the end of the previous year.

CONSOLIDATION SCOPE

The Group is composed of 21 companies, consolidated on a line-by-line basis as a result of direct or indirect control by Aquafil S.p.A., in addition to the associated company Nofir AS measured at equity.

Production is carried out at 21 plants located in Europe, the United States, South America, Asia and Oceania.

GENERAL AND ECONOMIC OVERVIEW

Climate change

The Aquafil Group is passionate about its role in the community and is highly cognizant of the effects of its environmental, social and governance policies.

The Group’s organisational structure for many years has considered the environmental impact of its processes and products and continuously assesses possible improvement actions, with an approach firmly focused on sustainability and circularity.

This structure particularly considers the consequences for its activities, processes and local organisations from climate change, whose risk is consistently monitored and assessed. It may be stated that no significant impacts are currently expected on the operating activities carried out in the various regions in which the Group operates.

Covid-19 pandemic

In relation to the COVID-19 pandemic, the Aquafil Group continues to constantly monitor developments, also in terms of the circulation of the range of variants, at all operational locations globally, confirming the key objective of protecting the health of its employees and collaborators.

Thanks to this focus adopted since the beginning of the pandemic, in compliance with the health safety measures, the Group has effectively tackled and limited to a few exceptions infections among employees in the workplace and without significant health impacts.

The very restrictive measures adopted by the Chinese authorities in 2022 and the sudden normalisations introduced before the 2023 Chinese new year had no significant impact on the functioning of the production units and the various departments of the company Aquafil Synthetic and Polymers (Jiaxing).

The Group has constantly monitored the real and potential impact of the COVID-19 emergency on the Group's various business activities, financial position, credit risk, liquidity risk and overall operating performance and it may be stated that the health crisis did not substantially impact the annual results, nor did it gave rise to significant criticalities.

Conflict in Ukraine

With regards to commercial relations with parties located in the countries involved in the conflict, the Group does not have a dependence on particular products and/or suppliers/clients in these areas which may impact upon operations. No direct consequences were therefore felt from the stoppage of import/exports of the products and businesses subject to limitations.

In particular, it should be noted that the Group had only limited business relations with a Russian supply of caprolactam flakes, a supplier that was permanently discontinued in October 2022.

The conflict between Russia and Ukraine that began on February 24, 2022 has brought severe repercussions to Europe in terms of economic instability, resulting in significant inflation for the broad range of products, caused particularly by the sudden unavailability of imports from Russia and Belarus of the products subject to sanctions and the high price levels of energy components. The price of TTF natural gas listed on the Amsterdam Stock Exchange on August 26 peaked at Euro 343 per megawatt hour - the oil equivalent of nearly USD 580 per barrel. Gas prices then fell steadily through December and continued the decline in early 2023 to below Euro 50 per megawatt hour. Naval and land transport costs have also been severely impacted by the war crisis and have been further affected by the anti-Covid restrictive measures imposed by Chinese authorities, which have seriously impacted upon carrier availability and the mobility of goods between regions globally. Europe suffered the greatest economic consequences, with slowdown in consumption in most sectors. The Euro-Dollar exchange rate reached a low of 0.95 in the autumn of 2022, then returned above parity and closed the year at 1.06. Inflation also reached very high levels in the U.S., driven by rising import and energy prices.

Against this backdrop, the Aquafil Group in the year reacted promptly by, on the one hand, seeking regional diversification where possible of raw material procurement sources and, on the other hand, by recovering the incremental purchase and service cost components on the products sold within the three product lines. Thanks to a strong competitive positioning and the overall resilience of the fiber markets, it is therefore possible to recover the margin absorbed by the increased costs through relying on the continuity and close collaboration of the entire logistics and production chain and of the markets of the various regions served by the Group.

SIGNIFICANT EVENTS IN 2022

The Group’s key events in the year included:

1. Aquafil Chile SpA : The newly-incorporated company Aquafil Chile S.p.A., based in Santiago, Chile, a wholly-owned subsidiary of Aquafil SLO doo, was acquired with the corporate scope of mainly purchasing fishing nets and other plastic material waste, managing their storage, processing, transport

and sale to third parties, as a raw material for reuse in subsequent ECONYL® recycling and regeneration processes.

2. Bluloop Srl benefit company : On June 22, Bluloop S.r.l. was incorporated as a benefit company, a wholly-owned subsidiary of Aquafil S.p.A., whose main corporate scope is to sell products made with ECONYL® polyamide to end consumers on the e-commerce channels. The company also has communication, training and intervention objectives on environmental and social sustainability issues in the areas in which the Aquafil Group operates.

3. Dividend distribution : On April 28, 2022, the Shareholders' Meeting of Aquafil S.p.A. approved the distribution of dividends totalling Euro 6 million, which were paid out on May 11, 2022.

4. Purchase of treasury shares : as part of the share buy-back plan approved by the Shareholders' Meeting of October 20, 2021, the number of shares purchased and held by the company at December 31, 2022 totalled 1,181,685, equal to 2.3071% of the share capital, for a total value of Euro 8 million. Please also refer in this regard to paragraph 14.2 of this Directors’ Report.

5. Business Alliance Agreement with Itochu: on March 15, 2022, the signing was announced of a Business Alliance Agreement, on a non-exclusive basis, with Japan-based ITOCHU Corporation to promote and expand the circular nylon business.

6. Settlement of registration tax: the relevant Tax Agency Department in May and June fully repaid to Aquafil S.p.A the amount of Euro 0.84 million which was previously disputed.

7. Assessment of 2015-2016 taxes: the company settled the assessment notices for the 2015 and 2016 fiscal years, with the payment of taxes, sanctions and interest, respectively for Euro 0.42 million and Euro 0.29.

8. Joint Audit – Aquafil SpA / Aqualeuna Gmbh: Following the settlement of the tax dispute for the 2016 and 2017 fiscal years, the company Aqualeuna G.m.b.H. was challenged by the “Bundeszentralamt fur Steuern” in terms of the deductibility of the restructuring and closure expenses incurred in 2018 and 2019 totalling Euro 6.4 million. The subsidiary, while formally contesting this charge, has prudently written off deferred tax assets of Euro 1.2 million calculated on the remaining tax losses. It is considered that, consistent with previous years, Aquafil SpA may obtain the authorisation to offset these costs within Italy (as per Article 31- quater Presidential Decree No. 600/73).

10. Signing of a non-binding Term Sheet for the possible undertaking of a stake in the Indian company Gujarat Polyfilms Private Limited: On August 24, 2022, Aquafil S.p.A. signed a non-binding term sheet covering the possible acquisition of a majority stake in the Indian company Gujarat Polyfilms Private Limited, which produces nylon 6 polymer and textile fibers at its Surat site in Gujarat, India. For the last year ended March 31, 2022, the company reported revenues of Euro 55 million, with a margin in line with the sector. The Indian market currently presents the world’s highest rates of internal growth and the potential acquisition seeks both to provide polymerization capacity on the Asian market and to continue the globalisation of textile fibers. In addition, the geographical positioning and competitiveness of local cost factors may allow the evaluation of a further possible expansion of the Group's activities in the Asian region. Due diligence activities aimed at obtaining a complete understanding and assessment of the company's industrial and commercial activities have been largely completed to allow for a full evaluation and it is believed that in the coming months the process of negotiating and drafting the contractual documents necessary to put the transaction into place can begin.

11. Lapse of the possibility to exercise the Market Warrant option and conversion of class C shares into ordinary shares: on December 4, 2022, the deadline for exercising the financial instruments known as Aquafil Warrants expired, as 60 months had elapsed since the date of listing of Aquafil ordinary shares (ISIN IT0005241192). Following the fulfilment of that indicated at Article 5 of the By-Laws of Aquafil S.p.A., 100% of the class C shares (i.e. 80,000 class C shares), were automatically converted into ordinary shares, according to the conversion ratio of 1 ordinary share for each class C share, without the expression of interest from their respective holders and without any change in the total

amount of the company share capital. As a result of this share conversion, the Group’s share capital remains at Euro 49,722,417.28 while the number of ordinary shares increases from 42,822,774 to 42,902,774, while the class B shares remained unchanged (8,316,020 shares) and consequently the total number of shares remains unchanged (51,218,794 shares). Therefore, the processes of updating and filing the new By-Laws at the company’s registration office began, in order to reflect the new share capital composition.

AQUAFIL ON THE STOCK MARKET

At December 30, 2022, the Aquafil share price (ISIN IT0005241192) was Euro 6.14, decreasing approx. 19% on December 30, 2021 (Euro 7.66), against a decline in the FTSE MIB index during the year of 15%.

The Aquafil share generally declined in the period, between a minimum of Euro 4.885 (on October 12, 2022) and a maximum of Euro 8.01 (on January 5, 2022).

The average traded volume for the year was 36,881 shares, with a maximum daily volume (traded on May 18, 2021) of 291,997 shares and a minimum daily volume (traded on September 9, 2022) of 1,947 shares.

AQUAFIL GROUP AND PARENT COMPANY FINANCIAL HIGHLIGHTS

Definition of alternative performance indicators

This is an alternative performance indicator not defined under IFRS but used by company management to monitor and assess the operating performance as not impacted by the effects of differing criteria in determining taxable income, the amount and types of capital employed, in addition to the amortisation and depreciation policies. This indicator is defined by the Aquafil Group as the net result for the year adjusted by the following components:

• income taxes,

• investment income and charges,

• amortisation, depreciation and write-downs of tangible and intangible assets,

• provisions and write-downs,

• financial income and charges,

• non-recurring items.

Adjusted EBIT

Calculated as EBITDA, to which the accounts “amortisation, depreciation and write-downs” and “provisions and write-downs” are added. Adjusted EBIT differs from EBIT in terms of the non-recurring components and other charges, as specified in the notes to the “Parent Company Key Financial Highlights” table.

Net Financial Position

On April 29, 2021, Consob issued “Call to attention No. 5/21” in which it highlighted that the new “ESMA Guidelines” of March 4, 2021 replaced on May 5, 2021 those of preceding Consob communications. In particular, guideline No. 39 requires that financial statement disclosure includes the following definition of net financial debt:

A. Liquidity

B. Other liquidity

D. Liquidity (A+B+C)

E. Current financial debt (including debt instruments but excluding the current portion of non-current financial debt)

F. Current portion of non-current financial debt

G. Current financial debt (E + F)

H. Net current financial debt (G - D)

I. Non-current financial debt (excluding current portion and debt instruments)

J. Debt instruments

K. Trade payables and other non-current payables

L. Non-current financial debt (I + J + K)

M. Total financial debt (H + L)

Application of the new definition of debt according to the above format has not resulted in any change to the Group’s Net Financial Position for the period under review or for the preceding comparative periods.

Key Group Financial Highlights

(*) Comprises: (i) financial income for Euro 4.9 million, (ii) interest expense on loans and other bank charges for Euro 8.4 million, (iii) customer cash discounts for Euro 3.8 million and (iv) exchange gains for Euro 2.8 million.

(**) Comprises: (i) non-recurring charges related to the expansion of the Aquafil Group for Euro 0.4 million; (ii) non-recurring costs and revenue for ECONYL ® development for a net cost of Euro - 0.9 million; (iii) restructuring charges of Euro 1.1 million; (iv) costs for fiscal disputes of Euro 0.1 million; (v) other non-recurring costs of Euro 0.5 million and (vi) non-recurring revenue of Euro 0.1 million. Reference should be made to paragraph 8.14 of the notes to the consolidated financial statements.

For an analysis of the highlights indicated above, reference should be made to the paragraph “Group operating performance” below.

Key Group balance sheet and financial indicators

The comments on the movements in the Net Financial Position are reported in the “Group balance sheet and financial position” paragraph.

(*) Comprises: (i) financial income for Euro 5.2 million, (ii) interest expense on loans and other bank charges for Euro 9.3 million, (iii) customer cash discounts for Euro 3.4 million and (iv) exchange gains for Euro 0.5 million.

(**) Comprises: (i) non-recurring charges related to the expansion of the Aquafil Group for Euro 0.4 million, (ii) consultancy costs for tax disputes for Euro 0.1 million and (iii) company restructuring charges of Euro 0.1 million and other non-recurring charges of Euro 0.3 million. For further details, see paragraph 9 of the Notes to the Separate Financial Statements.

The income statement figures of the Parent Company report revenues and acquisition costs which differ from the consolidated financial statements as including inter-company purchase and sales activities undertaken by Aquafil S.p.A. with the investees, which however in the consolidation process are eliminated. Therefore, the margins on revenues are not representative of the company’s actual profitability. Operating income and the net result also do not incorporate the positive income statement results of the subsidiaries, in view of the investments’ valuation method adopted. For all other detailed information, see the section “Group operating performance” below and the Notes to the separate financial statements of the Parent Company.

Key balance sheet and financial indicators of the Parent Company Aquafil S.p.A.

The net financial position of the Parent Company Aquafil S.p.A. does not reflect the real debt of the company as not taking account of liquidity available in the bank accounts of the subsidiaries at year-end (Euro 58 million). Funding from the financial system in fact was undertaken largely by the parent company, which plays a financial support role for all of the subsidiaries. The only funding line undertaken by subsidiaries is the loan taken out in July 2020 by Tessilquattro S.p.A. for a total of Euro 5 million.

For all other detailed information, reference should be made to the separate financial statements of the company.

GROUP OPERATING PERFORMANCE

The 2022 Income Statement compared with the previous year is reported below:

Revenues

2022 Consolidated revenues increased on the previous year by Euro 114.4 million ( 20.1%), from Euro 569.7 million to Euro 684.1 million.

This increase is mainly attributable to the increase in average sales prices, having been adjusted to match the increase in the value of raw materials.

Other Revenue and Income

Other revenues and income increased Euro 8.4 million, compared to Euro 4.6 million in 2021. The increase on the previous year is mainly due to the receivables for government grants received by Aquafil S.p.A. for Euro 6.7 million and by Tessilquattro S.p.A. for Euro 1.1 million, principally due to the tax credits for electricity intensive and natural gas intensive companies meeting the regulations requirements.

Raw material costs

Raw materials, ancillaries and consumables amount to Euro 317.8 million, increasing 12.2% on the previous year (Euro 34.2 million). This increase is due both to quantities and the higher price of raw materials.

Service costs and rent, lease and similar costs

Service costs and rent, lease and similar costs amounted to Euro 168.5 million, increasing Euro 55.9 million on 2021 (Euro 112.6 million). Not considering "non-recurring costs”, service costs represented

Labour costs

Labour costs totalled Euro 126.9 million, increasing Euro 12.6 million on 2021 ( Euro 114.2 million). The overall labour costs account for 18.5% of revenues, compared to 20.0% in 2021. Labour costs, net of non-recurring components, amounting to Euro 1.6 million (slightly decreasing on the previous year’s figure of Euro 1.7 million), amounted to Euro 125.3 million. Labour costs net of non-recurring components account for 18.3% of revenues, compared to 19.8% in 2021. The average workforce for the Group decreased by 48 employees, from an average of 2,748 in 2021 to 2,7 96 for 2022.

The increase in labour cost is mainly due to the increase in average cost due to salary increases.

Other Costs and Operating Charges

Other costs and operating charges amounted to Euro 4 million, compared to Euro 3.4 million in 2021, increasing therefore by Euro 0.6 million (+18.0%). Excluding the effects of non-recurring costs, the increase would have amounted to Euro 0.3 million, accounting for 0.5% of revenues (in line with 2021).

Increases for internal work

Increases for internal work amounted to Euro 5.7 million, substantially in line with 2021 (Euro 6.1 million).

EBITDA

EBITDA was Euro 92.3 million, increasing Euro 20.2 million ( 28%) on 2021 (Euro 72.1 million).

The EBITDA Margin in 2022 was 13.5%, compared to 12.7% in 2021.

Amortisation, depreciation and write-downs

Amortisation, depreciation and write-downs of Euro 47.9 million increased by Euro 2.9 million on 2021 (Euro 45 million). This figure, substantially in line with the preceding period, relates to the straight-line amortisation and depreciation of fixed assets.

Provisions and write-downs

“Provisions and write-downs” totalled Euro 0.2 million, substantially in line with 2021 (Euro 0.3 million).

EBIT

The 2022 EBIT was Euro 37.6 million, compared to Euro 21.5 million in 2021 (up Euro 16.1 million). This increase is mainly due to the higher EBITDA.

Financial Management Result

Net financial charges of Euro 0.7 million were reported in 2022, compared to net charges of Euro 6.9 million in 2021. The improvement is mainly due to the fair value measurement of IRS derivatives due to the movement in the interest rate curve, in addition to the benefit from exchange rate movements for Euro 3 million.

Income taxes

Income taxes totalled Euro 7.7 million, increasing on Euro 3.9 million on 2021, due to the increase in the “profit before taxes” of Euro 22.2 million, from Euro 14.6 million to Euro 36.9 million in 2022.

Consolidated Result

The Group net profit was Euro 29.2 million, compared to Euro 10.7 million in 2021.

IFRS 8 defines an “Operating segment” as a component (i) involving business activities generating revenues and costs, (ii) whose operating results are reviewed periodically at the highest decision-making level and (iii) for which separate financial data is available.

The operating segments of the company are identified on the basis of the information analysed by the Board of Directors, which constitutes the highest decision-making level for strategic decisions, the allocation of resources and the analysis of results.

For IFRS 8 purposes, the Group activities are identifiable as a single operating segment whose results are reviewed periodically by the Board of Directors.

In fact, the Group structure identifies a strategic and singular vision of the business and this representation is consistent with the manner in which management takes its decisions, allocates resources and defines the communication strategy. Dividing the business into separate divisions is therefore currently viewed as detrimental to its economic interests. Therefore, the information required by IFRS 8 corresponds to that presented in the consolidated income statement.

The breakdown of consolidated revenues by region and by product line is therefore reported below.

Breakdown of revenues by region and product line

The breakdown of revenues by region and product line is presented in the following table (Euro millions) and also in percentage terms, alongside an analysis of the movements against the previous year: