Annual report
at 31 December
02 Report on operations 13
03 Group annual report
and financial statements
89
Consolidated financial statements: 90
— Consolidated income statement 90
— Consolidated statement
of comprehensive income 91
— Consolidated statement
of financial position 92
— Consolidated statement of cash flows 94
— Consolidated statement
of changes in net equity 95
Explanatory notes 96
External auditors’ report on the
consolidated financial statements 148
Independent auditors’ report on
consolidated Non-Financial Statement 155
04 Report on operations
on separate financial statements
159
05 Separate annual report
and financial statements
176
De’ Longhi S.p.A. - Separate financial
statements: 177
— Income statement 177
— Statement of comprehensive income 178
— Statement of financial position 179
— Statement of cash flow 181
— Statement of changes in net equity 182
Explanatory notes 183
External auditors’ report
on the separate financial statements 221
01 De’ Longhi Group 3
ContentsAnnual report
at 31 December
The Annual report at 31 December 2023 has been translated from the Italian original solely for the
convenience of international readers.
The original version has been issued in Italian in accordance to the Delegated regulation (EU)
2019/815. The Italian version shall always prevail in case of any discrepancy or inconsistency be-
tween Italian version and its English translation.
Due to mechanisms of producing xHTML documents, some narrative blocks extracted from such
documents to an XBRL instance may not maintain the graphic structure that was attributed to them.
The limitations to the transformation mechanisms are known and understood by the XBRL commu-
nity. For a better understanding of the values, it is advisable to refer to the xHTML format.
The De’Longhi Group
De’Longhi Group
|
01 The De’Longhi Group 4
Our vision,
our mission,
our values
Heritage
Passion
Respect
Competence
Ambition
Teamwork
Courage
Our values
The Group has its roots in the early 1900s when the
de’ Longhi family founded a workshop for the pro-
duction of industrial components; over the years it
became a manufacturer of finished goods for third
parties; in 1974 the first De’ Longhi brand appliance
was launched, marking the beginning of the
Group’s history.
Known initially as a manufacturer of portable elec-
tric heaters and air conditioners, over the years the
Company increased the range of products
produced.
Today, the Group offers a range of small domestic
appliances for the preparation of coffee, food-
preparation and cooking, comfort (air conditioning
and heating), as well as home care, and operates
mainly through the three brands, De’ Longhi, Ken-
wood and Braun.
More recently, the product range was increased
thanks to the acquisition of Capital Brands Holding
Inc., an American company active in the personal
blenders segment with the Nutribullet and Magic
Bullet brands and the Eversys Group, active in the
professional espresso coffee machine sector.
The Group, whose main headquarters are in Trevi-
so (Italy), is present worldwide thanks to the direct
commercial branches and a network of distribu-
tors; it also owns six productive plants and a few
stores.
The Group aims to strengthen its global leadership,
reaching consumers worldwide with superior solu-
tions for design, quality and technology.
The strong points that the Group can count on to
achieve these goals include a portfolio comprised
of strong, unique and diversified brands, the ability
to see the new market trends, an extensive global
reach, as well as the diversity and talent of its
people.
The Group’s values reflect who we are, our charac-
ter, and our way of being and working. They are
ideals that guide the Group’s operations through
the day-to-day work of its people and their
projects.
Worldwide,
Every Day,
by your Side
A desiderable object,
An emotion,
An authentic experience
To be lived,
To be shared.
De’Longhi Group
|
01 The De’Longhi Group 5
The business
model
We design
products and
experiences
Each product is born out
of research, development,
and engineering involving
our technical units as well
as the Marketing and
Design divisions.
After defining the solution,
the Group purchases the
required raw materials
and components.
From raw
materials to
products
The purchased raw
materials and
components are shipped
to the Group’s production
sites and to the partners
that manufacture and
assemble the products.
The process is structured
around specialized
centers where a specific
product is always
manufactured inside the
same plant.
Reaching
customers and
consumers
The products are shipped
from the sourcing centers
and logistics hubs to the
various warehouses and
then distributed across
the Group’s entire sales
network.
Test after test,
quality and
safety
At the end of the
manufacturing process all
products, including the
solutions made by the
partners that supply
finished products, are
tested to guarantee the
highest safety and quality
standards.
De’Longhi Group
|
01 The De’Longhi Group 6
In 2023 the Group continued with the gradual inte-
gration of issues relating to environmental and
social sustainability, as well as governance, in the
company’s strategy, risk management, and com-
pensation processes, with a view to promoting a
systematic and transparent approach, consistent
with the standards called for in the Code of Ethics.
Various projects were developed during the year,
aimed at achieving the targets defined in the Sus-
tainability Manifesto published in 2022, thanks to
the constant work done rooted in the three pillars of
our sustainability path: Products, Processes,
People.
More in detail, the results achieved include the
following:
• completion of the “life cycle assessment (LCA)”
of three products chosen in order to determine
their carbon footprint with a view to optimizing
the energy performance, the environmental and
water impact. This target was achieved a year in
advance.
• The adoption of the “Eco-Design Guidelines” for
ten products has been finalized, consistent with
the target included in the Sustainability Manifes-
to as part of the objectives for 2023.
• The Group worked to manage energy resources
responsibly and the target calling for the electricity
used to be derived 100% from self-produced re-
newable energy or from certified renewable energy
networks was achieved two years in advance.
• The audits needed to obtain ISO 45001 certifica-
tion for workplace health and safety manage-
ment continued and certification was obtained
by one of the plants in China.
• With a view to Health & Safety, a campaign
aiming to raise awareness about health and
safety issues was launched by publishing a spe-
cific Manifesto and implementing a robust pro-
gram focused on the prevention of accidents at
the production facilities, including by also ap-
pointing company ambassadors.
• The DEI (Diversity, Equity and Inclusion) program
was launched and top management, along with
Human Resources, defined a program focused
on strengthening the presence of women in
managerial positions and supporting the reduc-
tion of the “gender pay gap”.
• The Sustainability Learning Journey was
launched and had an impactful beginning: with
the introduction of the intranet “Switch on” it was
possible to share topics and updates linked to the
Group’s sustainability path. The program also in-
cluded the “Sustainability Speech” which was
made by Nobel Prize Winner Prof. Joseph Stiglitz
at the Treviso headquarters. It was the source of
great inspiration for the entire company.
• Thanks to the new PULSE platform and the de-
velopment of e-learning the average hours of
training per employee increased (from 23 in
2022 to 24.3 in 2023), consistent with the target
included in the Sustainability Manifesto.
Sustainability was again identified as one of the key
enablers of the Medium-Term Plan 2021-2023,
which confirms the importance that the concept of
“Sustainable Success” has for the De’ Longhi
Group.
In 2023 the Group worked on revising and updating
the original Sustainability Plan approved by the
Board of Directors on 28 July 2022.
This updated Sustainability Plan was included in
the Medium-Term Plan 2024-2026 (approved by
the Board of Directors on 18 January 2024), con-
sistent with its role as one of the key enablers.
The Group is continuing with the work connected
to the tender of the Ministero dell’Università e della
Ricerca (MUR), part of the Piano Nazionale di
Ripresa e Resilienza (PNRR) which calls for the cre-
ation of at least 12 expanded partnerships, includ-
ing the Models for Sustainable Nutrition in partner-
ship with the University of Parma. The targets to
reach involve: prevention of waste, sustainability
and the circular supply chain, improved nutrition
and food sustainability in densely populated areas.
The Group also participated in the Italian Green
New Deal, a nationwide tender focused on
eco-friendly and circular transition projects.
Lastly, in 2023 the Group began its sponsorship of
two PhDs in Sustainable Design offered through
the Design Department at Milan’s Politecnico.
Sustainability
De’Longhi Group
|
01 The De’Longhi Group 7
Board of Directors
Giuseppe de’Longhi Chairman
Fabio de’Longhi Vice Chairman and
Chief Executive Officer
Massimiliano Benedetti** Director
Ferruccio Borsani** Director
Luisa Maria Virginia Collina** Director
Silvia de’Longhi Director
Carlo Garavaglia Director
Carlo Grossi ** Director
Micaela Le Divelec Lemmi ** Director
Maria Cristina Pagni Director
Stefania Petruccioli Director
External Auditors
PriceWaterhouseCoopers S.p.A. ***
Control, Risks, Corporate Governance
and Sustainability Committee
Luisa Maria Virginia Collina ** Chairman
Micaela Le Divelec Lemmi **
Stefania Petruccioli
Remuneration and Appointments Committee
Carlo Grossi ** Chairman
Ferruccio Borsani **
Carlo Garavaglia
Independent Committee
Luisa Maria Virginia Collina ** Chairman and
Lead Independent Director
Massimiliano Benedetti **
Micaela Le Divelec Lemmi **
* The current corporate bodies were appointed during the Shareholders’ Meeting held on 20 April 2022 for the three-year period 2022-2024.
On 21 April 2023, following the resignation of Massimo Garavaglia from his position as Chief Executive Officer and General Manager effective 31 August 2022, the Sharehold-
ers’ Meeting resolved to reduce the number of directors from 12 (twelve) to 11 (eleven) based on the sole proposal submitted by the majority shareholder De Longhi Industrial
S.A. for the remainder of the Board’s current term and, therefore, through the Shareholders’ Meeting convened to approve the 2024 Annual Report.
On 28 July 2022, as part of the Succession Plan Policy adopted by De’ Longhi S.p.A. in accordance with the Corporate Governance Code and applied subsequent to the resig-
nation of Massimo Garavaglia, the Board of Directors appointed the Vice Chairman Fabio de’ Longhi Chief Executive Officer effective as from 1 September 2022, pending the
identification of a new top manager. Effective again as from 1 September, Fabio de’ Longhi was also identified, pursuant to the Corporate Governance Code, as the Chief Exec-
utive Officer charged with the institution and management of De’ Longhi S.p.A.’s and the Group’s internal control and risk management system. On 22 December 2022, the
succession planning ended with the appointment of Nicola Serafin as the new General Manager (effective as from 1 January 2023) and the confirmation of Fabio de’ Longhi
as Chief Executive Officer.
** Independent directors.
*** Assigned by the shareholders’ meeting of 24 April 2018 for the financial years 2019-2027.
Company officers
*
Board of Statutory Auditors
Cesare Conti Chairman
Alessandra Dalmonte Standing member
Alberto Villani Standing member
Raffaella Annamaria Pagani Alternate auditor
Alberta Gervasio Alternate auditor
De’Longhi Group
|
01 The De’Longhi Group 8
Key performance indicators
Consolidated revenues
of €3,075.9 million
2019
2020
2021
2022
2023
2,101.1
2,351.3
3,221.6
3,158.4
Revenues
Growth rate
1.1%
11.9%
37.0%
-2.0%
-2.6%
196.6
6%
4%
4%
3%
1,874.6
56%
1,907.1
59%
623.4
26%
547.0
26%
7%
447.4
174.4
463.9
9%
2022
2022
Consolidated revenues by geographical area
Consolidated revenues by product category
Europe
Americas
Asia Pacific
MEIA
Coffee
Cooking and food preparation
Comfort
Cleaning and ironing
Other
(€/million)
3,075.9
2023
2023
De’Longhi Group
|
01 The De’Longhi Group 9
2022
2023
2022
2023
EBITDA
EBITDA/Net revenues
Operating NWC
Operating NWC/Net revenues
2022 NFP
Curr. op. & NWC mov.
Capex
Dividends
Net equity mov.
2023 NFP
298.8
584.3
(132.3)
(72.1)
(16.1)
662.6
EBITDA before non-recurring/stock option cost
of €444.2 million (14.4% of revenues).
NFP
at €662.6 million.
Operating cash flow and changes in NWC positive for €584.3 million.
Operating NWC
of €61.1 million (2.0% of revenues).
444.2
362.0
61.1
288.8
11.5%
2.0%
14.4%
9.1%
(€/million)
De’Longhi Group
|
01 The De’Longhi Group 10
Results
(€/million) 4th Quarter 2023 % 4th Quarter 2022 % Change Change %
Revenues 1,078.1 100.0% 1.029.8 100.0% 48.3 4.7%
Revenues at constant exchange rates 1,110.4 100.0% 1.027.7 100.0% 82.6 8.0%
Net industrial margin 518.1 48.1% 477.8 46.4% 40.3 8.4%
EBITDA before non-recurring/stock option costs 179.1 16.6% 150.0 14.6% 29.1 19.4%
EBITDA 176.9 16.4% 151.6 14.7% 25.3 16.7%
EBIT 146.8 13.6% 122.4 11.9% 24.4 20.0%
Profit (loss) pertaining to the Group 108.2 10.0% 78.0 7.6% 30.2 38.7%
(€/million) 2023 % 2022 % Change Change %
Revenues 3,075.9 100.0% 3.158.4 100.0% (82.5) (2.6%)
Revenues at constant exchange rates 3,147.7 100.0% 3.153.8 100.0% (6.1) (0.2%)
Net industrial margin 1,504.3 48.9% 1.493.3 47.3% 11.0 0.7%
EBITDA before non-recurring/stock option costs 444.2 14.4% 362.0 11.5% 82.2 22.7%
EBITDA 437.8 14.2% 369.4 11.7% 68.4 18.5%
EBIT 329.6 10.7% 263.5 8.3% 66.1 25.1%
Profit (loss) pertaining to the Group 250.4 8.1% 177.4 5.6% 72.9 41.1%
De’Longhi Group
|
01 The De’Longhi Group 11
Statement of financial position
(€/million) 31.12.2023 31.12.2022
Net operating working capital 61.1 288.8
Net operating working capital/Revenues 2.0% 9.1%
Net working capital (82.8) 142.9
Net capital employed 1,148.5 1,364.6
Net financial assets 662.6 298.8
of which:
- net bank financial position 761.7 389.5
- other financial receivables/(payables) (99.1) (90.7)
Net equity 1,811.1 1,663.4
De’Longhi Group
|
01 The De’Longhi Group 12
Introduction and definitions
This report contains forward - looking statements,
specifically in the “Outlook” section which, by
nature, have a component of risk and uncertainty
as they depend on future events and develop-
ments. At the date of this report, there is a high
level of uncertainty which is constantly changing
and calls for caution when making economic fore-
casts. The actual results could, therefore, differ
from the ones presented due to a number of
factors.
The figures at constant exchange rates are calcu-
lated excluding the effects of converting currency
balances and the accounting of derivative
transactions.
Report on operations
De’Longhi Group
|
02 Report on operations 14
Performance review
2023 was a positive year for the De’ Longhi Group
with gradual improvement in sales, which acceler-
ated in the fourth quarter, and good profitability and
cash flow generation.
Beginning in the second half of the year revenues
resumed a positive trajectory which gradually
gained momentum each quarter. The good perfor-
mance was supported by the expansion of the
coffee segment and personal blenders’ return to
growth.
Rigorous cost control, constant brand develop-
ment and a careful investment strategy made it
possible to improve margins, while good working
capital management, together with the improved
profitability, contributed to excellent cash flow
generation.
Revenues amounted to €1,078.1 million in the
fourth quarter of 2023, an increase of 4.7% com-
pared to the same period of 2022 (+8.0% at con-
stant exchange rates).
Revenues for the full twelve months, which
amounted to €3,075.9 million, were slightly lower
(-2.6%) than in 2022 due to the negative foreign ex-
change effect, net of which revenue would have
been largely in line with the prior year.
The performance posted in the twelve-month
period was impacted by the weakness seen in the
first part of the year linked to a few transitory and
one-off factors which eased or normalized during
the second half of the year that allowed for gradual
and constant recovery in sales in subsequent
quarters.
The performance was also affected by the Group’s
decision to exit the portable air conditioning market
in the United States; net of this discontinuity, 2023
revenues would have been largely in line with 2022.
The above dynamics also impacted the revenues
generated across the different geographies. In the
fourth quarter there was, in fact, an acceleration in
growth at constant exchange rates in all areas, with
the sole exception of America.
In Europe the Group reported revenues of €699.2
million in the fourth quarter, 11.0% higher than in
the same period of 2022; in the twelve-month
period revenues amounted to €1,907.1 million,
slightly higher than in 2022 (+1.7%).
In the fourth quarter Asia Pacific recorded reve-
nues of €150.7 million, slightly lower than in the
same period of 2022 (-1.5%), but higher by 4.8% at
constant exchange rates. In 2023 revenues came
to €447.4 million, a decrease of 3.6% against the
prior year.
MEIA closed the fourth quarter with revenues of
€44.4 million, an increase of 6.2% (+13.4% at con-
stant exchange rates) bringing the total for the year
to €174.4 million (-11.3%, or -7.9% at constant ex-
change rates).
In Americas revenues amounted to €183.7 million
(-10.3%, or -5.7% at constant exchange rates) in the
fourth quarter and €547.0 million in the twelve-
month period, a drop of 12.2% (-9.7% at constant
exchange rates). Net of the discontinuity in porta-
ble air conditioners, a 2.9% decrease in revenues
would have been recorded as consequence of a
negative exchange rates effect.
Looking at business lines, domestic coffee prod-
ucts reported sales growth in the year which accel-
erated in the fourth quarter. The positive results
were driven mainly by fully automatic machines
which benefitted from the launch of new models
and the new “Perfetto” campaign.
The growth trend for professional coffee ma-
chines continued with very positive results in both
revenues and profitability.
Despite closing the year down slightly against
2022, favorable dynamics in the second part of the
year helped food preparation return to growth sup-
ported mainly by NutriBullet personal blenders.
Sales for comfort were impacted noticeably by the
exit from the portable air conditioning market in the
United States, as well as the destocking of retail
distributors; in a few countries results were also
impacted by unfavorable weather conditions and a
weak heating season.
Home care, which includes irons and home care
products, recorded improvement in revenues
thanks to the contribution of Braun brand irons.
There was significant improvement in margins due,
above all, to lower supply chain costs attributable
to both lower unit transport costs and inventory, as
well as containment of operating costs.
The Group continued to pursue its strategy to
invest in advertising and promotional initiatives in
order to support the main brands and products, still
a high focus on optimization of expenditure. The
campaign “Perfetto” continued as did the collabora-
tion with Group ambassador which leds to a new
spot and the development of new initiatives linked
to a three-year partnership.
De’Longhi Group
|
02 Report on operations 15
The net industrial margin amounted to €518.1 mil-
lion or 48.1% of revenues in the fourth quarter of
2023, higher than in the same period of 2022
(€477.8 million, 46.4% of revenues). In the twelve-
month period the net industrial margin came to
€1,504.3 million or 48.9% of revenues (€1,493.3
million or 47.3% of revenues in 2022).
EBITDA before non-recurring income (expenses)/
stock option costs came to €179.1million (16.6% of
revenues) in the fourth quarter of 2023, higher both
numerically and as a percentage of revenue com-
pared to the same period of 2022 (€150.0 million,
14.6% of revenues). EBITDA before non-recurring
income (expenses)/stock option costs showed sig-
nificant improvement in 2023, also, coming in at
€444.2 million (14.4% of revenues) compared to
€362.0 million (or 11.5% in revenues) in 2022. This
positive trend reflects both lower productive and
logistics costs, stemming also from inventory con-
trol, and streamlining of operating costs.
In 2023 a few non-recurring items were recognized
which together generated net expenses of €5.5 mil-
lion (net income of €8.3 million in 2022). This item
reflects advisory fees and consultancies
connected to the La Marzocco/Eversys business
combination and the costs connected to company
reorganizations currently underway.
The Group also recognized €0.9 million in notional
stock option costs.
EBIT came to €146.8 million in the fourth quarter
(13.6% of revenues) versus €122.4 million (11.9%
of revenues) in the same period of 2022; in 2023
EBIT amounted to €329.6 million or 10.7% of
revenues.
Financial expenses amounted to €2.3 million, lower
than in 2022 (€25.3 million), thanks to financial
income from the investment of liquidity and effec-
tive currency management.
After taxes of €76.9 million, the Group’s portion of
net profit came to €250.4 million. (€177.4 million in
2022).
Looking at the balance sheet, there was a decided
decline in operating working capital, which came to
€61.1 million at 31 December 2023, both numerical-
ly (€288.8 million at 31 December 2022) and as a
percentage of rolling revenues (2.0% at 31 Decem-
ber 2023 versus 9.1% at 31 December 2022). The
change reflects effective management of inventory
and receivables, as well as higher trade payables
due to an increase in the volumes purchased.
Net working capital was negative for €82.8 million
(-2.7% of revenues) at 31 December 2023 versus
the positive €142.9 million (4.5% of revenues) re-
corded at the same date in 2022.
The net financial position came to a positive €662.6
million at 31 December 2023 (€298.8 million at 31
December 2022).
Net of a few specific financial items, including
mainly the fair value measurement of derivatives
and lease liabilities, the net financial position with
banks came to a positive €761.7 million (€389.5
million at 31 December 2022).
Operating cash flow and the movements in net
working capital were positive for €584.3 million in
2023 (positive €151.9 million in 2022) due to the
dynamics described above.
Total cash flow was positive for €363.8 million in
2023 after €132.3 million in investments and the
payment of €72.1 million in dividends, versus nega-
tive €126.3 million in 2022.
De’Longhi Group
|
02 Report on operations 16
Group results
The reclassified De’ Longhi Group consolidated income statement is summarized as follows:
(€/million) 2023 % revenues 2022 % revenues
Revenues 3,075.9 100.0% 3,158.4 100.0%
Change (82.5) (2.6%)
Materials consumed & other production costs
(production services and payroll costs)
(1,571.6) (51.1%) (1,665.1) (52.7%)
Net industrial margin 1,504.3 48.9% 1,493.3 47.3%
Services and other operating expenses (801.9) (26.1%) (889.1) (28.2%)
Payroll (non-production) (258.2) (8.4%) (242.2) (7.7%)
EBITDA before non-recurring/stock option costs 444.2 14.4% 362.0 11.5%
Change 82.2 22.7%
Non-recurring expenses/stock option costs (6.4) (0.2%) 7.4 0.2%
EBITDA 437.8 14.2% 369.4 11.7%
Amortization (108.2) (3.5%) (105.8) (3.4%)
EBIT 329.6 10.7% 263.5 8.3%
Change 66.1 25.1%
Net financial income (expenses) (2.3) (0.1%) (25.3) (0.8%)
Profit (loss) before taxes 327.3 10.6% 238.2 7.5%
Taxes (76.9) (2.5%) (58.4) (1.8%)
Net Result 250.4 8.1% 179.8 5.7%
Minority interests - 0.0% 2.4 0.1%
Profit (loss) pertaining to the Group 250.4 8.1% 177.4 5.6%
The net industrial margin reported in the reclassified income
statement differs by €235.7 million in 2023 (€240.2 million in
2022) from the consolidated income statement as, in order to
better represent the period performance, production-related
payroll and service costs have been reclassified from payroll
and services, respectively, and non recurring expenses have
been separately reported.
De’Longhi Group
|
02 Report on operations 17
(€/million)
4th Quarter
2023
%
4th Quarter
2022
% Change Change %
Change at constant
exchange rates %
Europe 699.2 64.9% 630.1 61.2% 69.1 11.0% 12.9%
Americas 183.7 17.0% 204.9 19.9% (21.1) (10.3%) (5.7%)
Asia Pacific 150.7 14.0% 153.0 14.9% (2.3) (1.5%) 4.8%
MEIA (Middle East/India/Africa) 44.4 4.1% 41.8 4.0% 2.6 6.2% 13.4%
Total revenues 1,078.1 100.0% 1,029.8 100.0% 48.3 4.7% 8.0%
(€/million) 2023 % 2022 % Change Change %
Change at constant
exchange rates %
Europe 1,907.1 62.0% 1,874.6 59.4% 32.5 1.7% 3.1%
Americas 547.0 17.8% 623.4 19.7% (76.3) (12.2%) (9.7%)
Asia Pacific 447.4 14.5% 463.9 14.7% (16.5) (3.6%) 2.4%
MEIA (Middle East/India/Africa) 174.4 5.7% 196.6 6.2% (22.2) (11.3%) (7.9%)
Total revenues 3,075.9 100.0% 3,158.4 100.0% (82.5) (2.6%) (0.2%)
In Europe the Group recorded revenues of €699.2
million in the fourth quarter of 2023, an increase of
11.0% compared to the same period in 2022. The
good performance recorded in the second part of
the year made it possible to close the twelve-month
period with revenues at €1,907.1 million, an in-
crease of 1.7% or 3.1% at constant exchange rates
compared to 2022.
Sales in the region’s main markets, above all Ger-
many and Italy, were impacted by the de-stocking
carried out by a few of the main retailers in the first
part of the year, but this trend normalized in subse-
quent quarters.
After a weak 2022, sales in France began to grow
again thanks to the gradual recovery of both
Revenues
Revenues amounted to €1,078.1 million in the
fourth quarter of 2023, an increase of 4.7% or 8.0%
at constant exchange rates.
The good performance is the result of a gradual in-
version in the trend begun in the second part of the
year, after the normalization of the non-recurring
transitory factors already described, which impact-
ed sales during the first few months of the year.
In 2023 the De’Longhi Group, penalized by the
weakness of the first part of the year, recorded rev-
enues of €3,075.9 million, largely in line with 2022
(-0.2%) at constant exchange rates and down
slightly at current exchange rates (-2.6%).
Markets
The overall performance described above was sim-
ilar across the regions which, with the sole excep-
tion of Americas, reported growth in the fourth
quarter at constant exchange rates and gradual re-
covery in the year.
The performance of revenues in the different com-
mercial regions is summarized as follows:
kitchen products, which benefitted from the contri-
bution of Nutribullet personal blenders, and coffee
machines.
In 2023 Germany, which showed greater resilience
in 2022 compared to the rest of the region, was
faced with a general economic slowdown in the
country due to rising inflation and weak consumer
confidence. Beginning in the second part of the
year, revenues began to recover. The main coffee
categories benefitted from the new advertising
campaign “Perfetto”. Sales for Comfort were down
as de-stocking by retailers and a mild summer
weighed on air conditioners.
The Italian market was, in general, impacted by the
factors described (de-stocking of retailers, higher
inflation, drop in demand) which resulted in a gen-
eralized weakness in both cooking and food prepa-
ration and coffee machines.
In the United Kingdom, after a weak 2022, there
was a positive sales trend in 2023. The growth was
fueled by coffee and comfort as air conditioners
benefitted from a favorable summer while heaters
were sustained by a solid fourth quarter which
largely compensated for the weakness seen in the
prior winter. Despite the impact of kitchen ma-
chines, in 2023 cooking and food preparation
posted a positive performance thanks to the contri-
bution of food processors and Nutribullet brand
personal blenders.
In Americas revenues benefitted from the positive
De’Longhi Group
|
02 Report on operations 18
The fully automatic machines confirmed their suc-
cess and three DeLonghi’ models (Eletta Explore,
Magnifica EVO and PrimaDonna Soul) were award-
ed 1st, 2nd and 3rd place by Stiftung Warentest, an
independent German organization which assesses
product performance. The sales for high-end prod-
ucts were good, above all in the third and fourth
quarters, thanks to the new models designed for
new consumer targets like Eletta Explore and
De’Longhi Rivelia. To complete the product range,
new entry level products with an automatic cap-
puccino maker (like Magnifica Start Milk) were
launched.
A positive contribution also came from the innova-
tive bean to cup machine for drip coffee (True
Brew) launched in the United States in the first few
months of 2023.
The La Specialista line played an important role in
supporting sales, particularly in a few countries and
has strengthened the brand’s positioning and
market share globally.
The Nespresso product platform was impacted,
above all in a few European countries, by strong
competitive pressures.
The professional coffee machines, which have
become part of the traditional product families, re-
corded robust growth.
Eversys, leveraging on ever-increasing demand,
grew sales across all the traditional reference mar-
kets, specifically China, the United States and other
Asia Pacific countries, despite a market affected by
exchange rates.
Cooking and food preparation products closed the
year down slightly against 2022. Beginning in the
second half of the year, however, favorable trends
made it possible to offset the weakness recorded
in the third and fourth quarters.
After a weak 2022, in 2023 sales for personal
blenders posted a decided recovery in the United
States, the reference market for the Nutribullet
brand, and noticeable progress in new geographies
where the Group leveraged on its proven distribu-
tion network.
Nutribullet’s new personal blender Ultra was well
received by the market.
Food processors also delivered positive results
thanks to the new models MultiPro Go and Multi-
Pro Weigh XL.
The Kenwood brand kitchen machines, however,
continue to be weak and penalized strongly by
shrinking demand and significant competitive
and heaters were down due to unfavorable weather
conditions. In the second part of the year, specifi-
cally in the fourth quarter, the recovery accelerated.
Revenues for the fourth quarter and the year were
both impacted by the negative exchange effect.
In Japan revenues fell, despite coffee’s good perfor-
mance due to a mild winter which penalized radia-
tor sales.
In the fourth quarter MEIA recorded revenues of
€44.4 million, an increase of 6.2% compared to the
same period of 2022 (+13.4% at constant exchange
rates), despite the tensions in the Middle East mar-
kets due to the conflict which broke out in Gaza in
October. The year closed with revenues of €174.4
million, 11.3% lower (-7.9% at constant exchange
rates). There was a generalized decrease across
the entire region. Saudi Arabia and United Emirates
were impacted by de-stocking. There was a posi-
tive trend in Turkey where revenues benefitted from
reorganized distribution. Egypt recorded recovery
after two years of stagnation due to monetary poli-
cies and import restrictions.
Business lines
Revenues for home coffee products rose in 2023,
showing gradual growth beginning in the second
half of the year. Overall, the segment continues to
benefit from the trend to buy espresso machines
for home use, albeit at a slower pace than during
the pandemic.
The investments made in communication, specifi-
cally in the new “Perfetto” campaign, contributed
significantly to strengthening brand recognition
and the category’s success.
trend of sales of Nutribullet personal blender and
full automatic coffee machines, also thanks to the
launch of an innovative bean to cup machine for
drip coffee (True Brew). In the fourth quarter reve-
nues came to €183.7 million, a decrease of 10.3%
or 5.7% net the impact of the negative exchange
effect; this performance reflects commercial
issues with a client active in the capsule coffee ma-
chine segment and a weak heating season. Reve-
nues in the twelve-month period were also impact-
ed by the discontinuity in portable air conditioners
and dropped 12.2% (-9.7% at constant exchange
rates) to €547.0 million. Net of the discontinuity,
revenues would have been down by 2.9%, mainly
due to a negative exchange rates effect.
In the fourth quarter of the year Asia Pacific re-
corded revenues of €150.7 million, an increase of
4.8% compared to 2022 at constant exchange
rates, largely in line with the same period of 2022 at
current exchange rates (-1.5%). Revenues amount-
ed to €447.4 million in the year, down 3.6% com-
pared to 2022 due to the negative exchange effect
across the region’s main currencies; revenues
would have been 2.4% higher at constant exchange
rates.
Greater China, despite weak demand, recorded
solid growth thanks, in particular, to the good re-
sults for coffee products, including professional
machines. A new model of the fully automatic ma-
chine Rivelia was launched and well received by the
market.
After three years of strong expansion, the small ap-
pliances market in Australia and New Zealand fell
noticeably which weighed heavily on results. In the
first part of the year, revenues for dehumidifiers
De’Longhi Group
|
02 Report on operations 19
pressures, particularly with respect to lower end
models.
In Europe a new Braun brand handblender Mul-
tiQuick 2 was launched in the first part of the year; a
high-end range of Braun brand grills, including its
flagship model MultiGrill9, was also launched in
Europe.
Comfort was impacted mainly by the discontinuity
in the American portable air conditioning market. In
Europe, despite a good sell-out level, the segment
was also impacted by the destocking of distribu-
tors. In a few markets sales were also impacted by
unfavorable weather conditions.
In Europe, portable air conditioners benefitted from
the introduction of the Pinguino A+++ model, but
growing competition resulted in price pressures.
Home care, which includes irons and home care
products, recorded improvement in revenues
thanks to the contribution of Braun brand irons. In
2023 four new models were launched, two for each
product family (irons and ironing systems) in order
to cover the low end and the high end of the market.
The new TextStyle 9, which is primarily for the Euro-
pean market (particularly Germany and Poland),
was launched in September. As for ironing sys-
tems, the CareStyle 7 line was expanded with the
introduction of an innovative ergonomic designed
certified by ErgoCert (an ergonomic certifier).
Profitability
In 2023 the Group showed strong recovery in mar-
gins which was obtained thanks to management
and optimization of industrial, operating and supply
chain costs as consequence of the containment of
the inventory and the decrease of ocean freight
tariffs.
In the fourth quarter of 2023 the net industrial
margin came to €518.1 million or 48.1% of reve-
nues, higher than in the same period of 2022
(€477.8 million, 46.4% of revenues). The net indus-
trial margin was €1,504.3 million or 48.9% of reve-
nues in 2023 (€1,493.3 million or 47.3% of revenues
in 2022).
EBITDA before non-recurring income (expenses)/
stock option costs came to €179.1million (16.6% of
revenues) in the fourth quarter of 2023, higher both
numerically and as a percentage of revenue com-
pared to the same period of 2022 (€150.0 million,
14.6% of revenues). EBITDA before non-recurring
income (expenses)/stock option costs showed sig-
nificant improvement in 2023, also, coming in at
€444.2 million (14.4% of revenues) compared to
€362.0 million (or 11.5% in revenues) in 2022. This
performance benefitted from the reduction of in-
dustrial and logistic costs, as well as from the ra-
tionalization of operating expenses. The Group also
continued to invest in advertising and promotional
initiatives in order to support the main brands, but
paid particular attention to optimizing costs.
In 2023 a few non-recurring items were recognized
which together generated net expenses of €5.5 mil-
lion (net income of €8.3 million in 2022). This item
reflects advisory fees and consultancies connect-
ed to the La Marzocco/Eversys business combina-
tion and the costs connected to ongoing company
reorganizations.
The Group also recognized €0.9 million in notional
stock option costs in the reporting period.
Amortization and depreciation amounted to €30.1
million in the fourth quarter of 2023, largely in line
with the same period of 2022 (€29.3 million); in the
twelve-month period amortization and deprecia-
tion were higher than in the prior year due to the
completion of a few investments made in the
second part of 2022.
EBIT came to €146.8 million in the fourth quarter
(13.6% of revenues) versus €122.4 million (11.9%
of revenues) in the same period of 2022; in 2023
EBIT amounted to €329.6 million or 10.7% of reve-
nues, an improvement with respect to (€263.5 mil-
lion, 8.3% of revenues).
Financial expenses came to €2.3 million, lower
than in 2022 (€25.3 million), thanks to financial
income from the investment of liquidity and effec-
tive currency management.
After taxes of €76.9 million, the Group’s portion of
net profit came to €250.4 million. (€177.4 million in
2022).
De’Longhi Group
|
02 Report on operations 20
Operating segment
disclosures
The De’ Longhi Group has identified three operating
segments which coincide with the Group’s three
main business regions: Europe, MEIA (Middle East,
India and Africa) and APA (Asia, Pacific, Americas).
Each segment is responsible for all aspects of the
Group’s brands and serves different markets.
This breakdown is in line with the tools used by
Group management to run operations, as well as
evaluate the company’s performance and make
strategic decisions.
The results by operating segment can be found in
the Explanatory Notes.
De’Longhi Group
|
02 Report on operations 21
Review
of the statement
of financial position
The reclassified consolidated statement of financial position is presented below:
(€/million) 31.12.2023 31.12.2022
- Intangible assets 878.3 891.2
- Property, plant and equipment 478.0 448.1
- Financial assets 9.7 11.7
- Deferred tax assets 60.4 64.6
Non-current assets 1,426.4 1,415.6
- Inventories 504.7 550.7
- Trade receivables 272.7 278.8
- Trade payables (716.2) (540.7)
- Other payables (net of receivables) (143.9) (145.8)
Net working capital (82.8) 142.9
Total non-current liabilities and provisions (195.1) (194.0)
Net capital employed 1,148.5 1,364.6
(Net financial assets) (662.6) (298.8)
Total net equity 1.811.1 1,663.4
Total net debt and equity 1,148.5 1,364.6
Net financial position as at 31 December 2023 includes € 99.1 million in net financial liabilities (net financial liabilities equal to € 90.7
million at 31 December 2022) relating to the fair value of derivatives and the financial debt connected to business combinations,
pension fund and financial liabilities for leasing.
In 2023, the Group made net investments of €132.3
million (versus €156.2 million in 2022 which includ-
ed the purchase of the new plant in Romania), at-
tributable for €18.7 million to intangible fixed
assets relating mainly to new products and pat-
ents, for €40.1 million to new leases and for €74.7
million to fixed assets, mainly improvements made
in order to expand the capacity of the production
facilities.
There was a decided decline in net operating work-
ing capital, which came to €61.1 million at 31 De-
cember 2023, both numerically (it reached €288.8
million at 31 December 2022) and as a percentage
of rolling revenues (2.0% at 31 December 2023
versus 9.1% at 31 December 2022). After the con-
tainment actions taken in the prior year, in 2023 in-
ventory was largely stable with an increase linked
to year-end sales and closed the year at €504.7
million, lower than at 31 December 2022 (€550.7
million). Despite the increase in sales in the fourth
quarter, collection of trade receivables went well,
while trade payables were higher due to the timing
and increase in procurement.
Net working capital was negative for €82.8 million
(-2.7% of revenues) at 31 December 2023 versus
the positive €142.9 million (4.5% of revenues) re-
corded at the same date in 2022.
De’Longhi Group
|
02 Report on operations 22
The statement of cash flows is presented on a condensed basis as follows:
(€/million) 2023 2022
Cash flow by current operations 446.3 340.0
Cash flow by changes in working capital 138.0 (188.0)
Cash flow by current operations and changes in NWC 584.3 151.9
Cash flow by investment activities (132.3) (156.2)
Cash flow by operating activities 452.0 (4.3)
Dividends paid (72.1) (124.5)
Stock options exercise 5.1 3.4
Cash flow by other changes in net equity (21.2) (0.9)
Cash flow generated (absorbed) by changes in net equity (88.2) (122.0)
Cash flow for the period 363.8 (126.3)
Opening net financial position 298.8 425.1
Closing net financial position 662.6 298.8
The good generation of operating cash flow and the containment of working capital resulted in positive
cash flow in the twelve months of €584.3 million (negative for €151.9 million in 2022).
Total cash flow was positive for €363.8 million in 2023 after €132.3 million in investments and the payment
of €72.1 million in dividends, versus negative €126.3 million in 2022.
Details of the net financial position are shown below:
(€/million) 31.12.2023 31.12.2022
Cash and cash equivalents 1,250.2 770.2
Other financial receivables 172.5 368.4
Current financial debt (289.0) (190.5)
Net current financial position 1,133.6 948.1
Non-current financial receivables and assets 122.0 124.6
Non-current financial debt (593.1) (774.0)
Non-current net financial debt (471.0) (649.3)
Total net financial position 662.6 298.8
of which:
- positions with banks and other financial payables 761.7 389.5
- lease liabilities (98.4) (80.5)
- other financial non-bank assets/liabilities (fair value of
derivatives, financial debt connected to business combinations
and pension fund)
(0.7) (10.2)
The net financial position came to a positive €662.6 million at 31 December 2023 (€298.8 million at 31 De-
cember 2022).
This includes a few specific financial items, including mainly the fair value measurement of derivatives
which had a net negative balance of €0.7 million at 31 December 2023 (at 31 December 2022 this included
the residual debt for business combinations and pension fund transactions which had a negative balance of
€10.2 million).
The item also includes lease liabilities recognized in accordance with IFRS 16 which amounted to €98.4
million at 31 December 2023 (vs. €80.5 million at 31 December 2022).
Net of these items, the net financial position with banks came to a positive €761.7 million (€389.5 million at
31 December 2022).
De’Longhi Group
|
02 Report on operations 23
Operations,
supply chain
and quality control
In 2023 the Group continued with investments on
multiple fronts.
Looking at the supply chain, implementation of the
global Customer Fulfillment Excellence program
continued in order to improve the level of customer
service by redesigning and increasing the transpar-
ency of the processes used in planning and the au-
tomation of production, as well as in distribution
flow and processes.
The Group also continued to implement procure-
ment strategies which focused on more evolved
and complete relationships with suppliers, creating
new synergies, particularly with respect to the
co-designing and development of technological
platforms, consistent with the commitment to pro-
moting sustainability along the supply chain and
the environmental awareness of the suppliers, as
well as encouraging fair behavior.
As for production, the Group sought to improve
flexibility in response to increasingly volatile
demand. Investments were made in increasing the
production capacity in Romania and Cina.
The automation and digitalization of the European
plants begun in the last few years continued.
The ISO 45001 certification process for the Swiss
headquarters of Eversys was also completed.
De’Longhi Group
|
02 Report on operations 24
Research
and development
In 2023 the Group continued to work on the devel-
opment of innovative and sustainable products, in-
corporating environmental criteria in the planning
process in order to minimize the footprint associat-
ed with procurement, production, distribution, use
and obsolescence. The Group was also committed
to reducing the environmental impact of packaging
used during the production processes and for prod-
ucts, to promoting a model based on the use of re-
newable materials and reducing consumption
along the value chain, as well as contributing to the
fight against climate change by using low carbon
emitting and highly energy efficient products.
Looking at the fully automatic coffee machines, in-
novative products with characteristics which are
unique to the market were launched (i.e. Rivelia)
and development of the projects developed to
reduce water consumption and improve descaling
time and efficiency continued in 2023.
All the packaging for the manual machines was
switched from Styrofoam to paper, cellulose paste, etc.
The developments in the cooking and food prepa-
ration products segment involved, above all, as-
pects related to practicality, size and the use of in-
novative, sustainable materials in products and
packaging.
As for comfort, research was focused on the new
A+++ energy efficient portable air conditioner,
made largely out of recycled materials.
With respect to home care, specifically irons, the
Group worked on reliability, durability and the com-
pactness of the product, while also focusing on
high ergonomic standards, optimization of energy
consumption and the use of sustainable materials.
De’Longhi Group
|
02 Report on operations 25
Communication
activities
In 2023 the Group continued to invest in promotion-
al activities and communication, consistent with
the direction taken in previous years, as well as ac-
tions to improve optimization and efficiency.
With regard to the De’Longhi brand, investments in
communication remained solid and involved coffee
machines, in particular.
In September the new fully automatic machine
Rivelia was presented to a few markets. Rivelia has
an innovative design, size and Bean Switch System
which makes it possible to use different coffee
beans, along with an intuitive touch screen display.
At the same time, the “Perfetto 2.0” campaign was
launched which, once again, stars Brad Pitt as part
of an ongoing, three-year collaboration. The cam-
paign, which focuses on four different models
(Eletta Explore, Rivelia, La Specialista Arte and La
Specialista Maestro), aims to strengthen the posi-
tioning of the De’Longhi brand in the premium
segment.
As for the social networks, there was a significant
increase in the followers, contacts and content,
both locally and globally; key messages were
posted which, through local channels, were inter-
preted based on the target audience.
The Coffee Lounge platform was launched in five
more markets which, together with the prior
launches, makes it possible to reach an increasing
number of coffee roasters.
Lastly, with regard to sustainability, the Group sup-
ported the World Coffee Research and the Slow
Food Coffee Coalition; this collaboration gave birth
to De’Longhi’s first specialty coffee which came
from a Slow Food Community source which con-
tributes to the development of sustainable practic-
es in the coffee industry.
As for the Kenwood brand, in 2023 the Group con-
tinued to invest in the “Kenwood Can” campaign,
which focused on kitchen machines and food
processors.
With the launch of the MultiPro Go food processor,
in order to reach a younger audience the Group in-
troduced a new approach to communication
based, above all, on platforms like TikTok and Insta-
gram. The success of the “Kenwood Club” contin-
ued. It is now operative in more than ten European
markets.
Lastly Kenwood’s commitment to reducing food
waste continued through a dedicated campaign
which aims to promote sustainable consumption
by educating the consumer with the recipes to be
made using the Group’s products.
With respect to Braun, during the year all the new
model launches were supported by a specific com-
munication campaign. “The Grillwhisperer” cam-
paign was developed specifically for the launch of
the MultiGrill line. The Sustainability Manifesto was
also shared with the public through the continuous
development of content in which the quality and
durability of the Braun products is stressed as part
of a lifestyle informed by a lower environmental
impact.
In 2023 further investments were made in increas-
ing the global brand awareness of the Nutribullet
brand with a focus on the core category of personal
blenders; the activities contributed to increase the
impact on the product’s target customers.
De’Longhi Group
|
02 Report on operations 26
Human Resources
Here follows a detail of the average workforce in
2023:
2023 2022
Blue collars 6,437 5,928
White collars 3,185 3,226
Managers 304 296
Total 9,926 9,450
The Group had an average of 9,926 employees in
2023, an increase of 476 heads compared to 2022
which is attributable mainly to personnel at produc-
tion facilities and the recovery in production follow-
ing a temporary slowdown in 2022 and the devel-
opment of the professional coffee machines
segment.
The Group’s Human Resources division was active
on multiple fronts in 2023.
Firstly, with regard to health and workplace safety, a
global campaign was launched which aims to
strengthen and spread a safety culture. The
initiative involved both the headquarters and com-
mercial branches, as well as the production facili-
ties. A few employees were chosen and trained to
act as ambassadors in order to encourage and
spread greater awareness about how to contribute
to the prevention of possible accidents.
The Talent Attraction and Employer Branding activi-
ties also continued. In Italy relationships with uni-
versities were strengthened which made it possible
to begin specific recruiting campaigns, attract re-
sources with a solid academic background and ex-
pertise consistent with business needs, as well as
plan and implement specific training programs for
employees.
Numerous Diversity, Equity & Inclusion initiatives
continued. More specifically, a quantitative and
qualitative analysis of the Group’s people was car-
ried out in order to understand areas in need of
improvement.
For more information on Human Resources man-
agement refer to the specific section of the Non-Fi-
nancial Statement.
De’Longhi Group
|
02 Report on operations 27
Report
on corporate governance
and ownership structure
De’ Longhi S.p.A.’s Report on Corporate Governance
and Ownership Structure drawn up in accordance
with art.123 - bis of Legislative Decree n. 58/98
(“TUF”) can be found in a report not included in the
Report on Operations, published at the same time as
the latter and available on the company’s website
www.delonghigroup.com (section Home > Govern-
ance > Corporate bodies > Shareholders’ Meeting
2024).
Pursuant to art.16.4 of the Market Regulations
please note that De’ Longhi S.p.A. is not subject to
the direction and control of the parent company De
Longhi Industrial S.A., or of any other party, pursuant
to and in accordance with articles 2497 et seq of the
Italian Civil Code, insofar as (i) the Group’s business,
strategic and financial plans, as well as the budget,
are approved independently by De’ Longhi S.p.A.’s
Board of Directors; (ii) the financial and funding poli-
cies are defined by De’ Longhi S.p.A.; (iii) De’ Longhi
S.p.A. conducts its relationships with clients and
suppliers in full autonomy; and (iv) in accordance
with the principles of the Corporate Governance
Code, important strategic, economic, equity and fi-
nancial transactions are examined by the board and
approved exclusively by the Board of Directors.
De’Longhi Group
|
02 Report on operations 28
Risk management
and internal control system
relating to the financial
reporting process
Introduction
The Issuer’s and the De’ Longhi Group’s Internal
Control System consists in the set of rules, proce-
dures and organizational structures set in place to
ensure that company strategies are adhered to
and, based on the corporate governance standards
and model included in the COSO report (Committee
of Sponsoring Organizations of the Treadway Com-
mission), to guarantee:
a. efficient and effective company operations (ad-
ministration, production, distribution, etc.);
b. reliable, accurate, trustworthy and timely eco-
nomic and financial information;
c. compliance with laws and regulations, as well
as the corporate articles of associations, rules
and company procedures;
d. safeguarding of the company’s assets and pro-
tection, to the extent possible, from losses;
e. identification, assessment, management and
monitoring of the main risks.
The executive administrative bodies of the Parent
Company De’ Longhi S.p.A. (Board of Directors, the
Risk and Control, Corporate Governance and Sus-
tainability Committee, Director in Charge of the In-
ternal Control and Risk Management System), the
Board of Statutory Auditors, the Director of Internal
Audit, the Supervisory Board, the Chief Financial
Officer/Financial Reporting Officer and all De’
Longhi personnel, as well as the Directors and Stat-
utory Auditors of the Issuer’s subsidiaries, are in-
volved in the controls, with different roles and in
function of their expertise and adhere to the recom-
mendations and principles found in the guidelines.
The Internal Control System that is subject to ex-
amination and periodic audits, taking into account
changes in the company’s operations and refer-
ence context, makes it possible to address the
main risks to which the Issuer and the Group are
exposed to over time, in a timely manner, as well as
to identify, assess and control the degree of the ex-
posure of the Issuer and all the other companies of
the De’ Longhi Group - particularly the strategically
important subsidiaries - to the different types of
risk, and also makes it possible to manage the
overall exposure taking into account:
i. the possible correlations between the different
risk factors;
ii. the probability that the risk materializes;
iii. the impact of the risk on the company’s
operations;
iv. the overall impact of the risk.
The internal control and risk management system
relating to the financial reporting process (adminis-
trative and accounting procedures used to draft the
separate and consolidated annual financial state-
ments and the other economic and/or financial re-
ports and disclosures prepared in accordance with
the law and/or regulations, as well as ensuring cor-
rect implementation) coordinated by the Chief Fi-
nancial Officer/Financial Reporting Officer, is an inte-
gral and essential part of the De’ Longhi Group’s
Internal Control and Risk Management System.
The Director of Internal Audit - who is in charge of
verifying that the internal control and risk manage-
ment system works efficiently and effectively - pre-
pares a work plan each year that is presented to the
Board of Directors for approval, subject to the posi-
tive opinion of the Risk and Control and Corporate
Governance and Sustainability Committee and after
having consulted with the Board of Statutory Audi-
tors and the Director in Charge of the Internal Con-
trol and Risk Management System, based also on
the comments made by the Chief Financial Officer/
Financial Reporting Officer, as well as pursuant to
Legislative Decree 262/05. Discusses the steps
taken to resolve any problems, to make the improve-
ments agreed upon, as well as the results of the test-
ing activities with the Risk and Control and Corpo-
rate Governance and Sustainability Committee.
Provides the Chief Financial Officer/Financial Re-
porting Officer, as well as the administrative body
assigned, with a summary report based on which
they can assess the adequacy and application of
administrative procedures to be used to prepare
the consolidated financial statements.
Description of main characteristics
The De’ Longhi Group uses a system of risk man-
agement and internal control for the financial re-
porting process that is part of the wider system of
internal controls as required under art. 123-bis par.
2.(b) of TUF.
For the purposes of ensuring reliable internal con-
trols over its financial reporting, the Group has im-
plemented a system of administrative and ac-
counting procedures and operations that include
an updating in order to comply with the law and
changing accounting standard, rules for consolida-
tion and interim financial reporting, as well as coor-
dination with subsidiaries as needed.
The Group’s central corporate functions are re-
sponsible for managing and communicating these
procedures to other Group companies.
The assessment, monitoring and continuous up-
dating of the internal control system relating specif-
ically to financial reporting is carried out in accord-
ance with the COSO model and, where applicable,
Law 262/2005. Critical processes and sub-pro-
cesses relating to the principal risks have been
identified in order to establish the principal controls
needed to reduce such risks. This has involved
identifying the strategically important companies,
based on quantitative and qualitative financial pa-
rameters (i.e. companies that are relevant in terms
of size and companies that are relevant just in
terms of certain processes and specific risks).
Having identified these companies, the risks have
been mapped and assessed and the key manual
De’Longhi Group
|
02 Report on operations 29
and automatic controls have been identified and
rated as high/medium/low priority accordingly;
these controls have then been tested.
The perimeter of the companies included in the
mapping for the purposes of Law 262/2005 has
changed over the years to reflect the changes in the
Group, both quantitative and qualitative, and this
perimeter was also considered for the definition of
companies viewed as strategic.
The general managers and administrative heads of
each Group company are responsible for maintain-
ing an adequate internal control system and, given
their roles, must certify that the internal control
system works properly.
Internal Audit must also include verification of the
internal controls through the use of a self-assess-
ment check list in its Audit Plan.
With regard to compliance with Consob Regulation
20249 of 28 December 2017 and subsequent
changes relating to market regulations (“Regola-
mento Mercati”), De’ Longhi S.p.A. controls, directly
or indirectly, seven companies formed and regulat-
ed by the law of countries that are not part of the
European Union considered relevant pursuant to
art. 151 of the issuer regulations (“Regolamento
Emittenti”).
With reference to the requirements of art. 15 of the
Market Regulations, it is reported as follows:
• in the issuer’s opinion, these companies have
suitable accounting and reporting systems for
regularly providing management and the audi-
tors of De’ Longhi S.p.A. with all the financial in-
formation needed to prepare the consolidated fi-
nancial statements and perform the audit of the
accounts;
• these companies provide the auditors of De’
Longhi S.p.A. with the information needed to
audit the parent company’s interim and annual
financial statements;
• the issuer keeps the articles of association of the
aforementioned companies and details of their
company officers and related powers, which are
constantly updated for any changes in the same;
• the financial statements of such companies, pre-
pared for the purposes of the De’ Longhi Group’s
consolidated financial statements, have been
made available in the manner and terms estab-
lished by existing law. Please note that the identi-
fication and analysis of the risk factors con-
tained in this report were carried out including in
light of the change in strategic companies as re-
solved by the Board of Directors.
In order to identify and manage the Company’s
main risks, with regard particularly to corporate
governance and compliance with the law and regu-
latory standards (including, specifically the recom-
mendations found in the Corporate Governance
Code for Listed Companies), the De’ Longhi Group
undertook to develop and monitor a structured En-
terprise Risk Management model.
The purpose underlying the implementation and
deployment of the Enterprise Risk Management
(ERM) system is to strengthen the risk control and
management system by mapping the main risks to
which the Group is exposed along its value chain,
identifying the inherent and relative residual risk, as
well as defining and implementing the actions
needed to eliminate and/or mitigate them.
The ERM system also includes a list of risks con-
nected to sustainability.
De’Longhi Group
|
02 Report on operations 30
This reflects the gradual integration of environmen-
tal and social sustainability, as well as governance,
in the corporate strategy, risk management and
compensation processes, promoting a systemic
and transparent approach, respectful of the stand-
ards found in the Code of Ethics, with a view to also
guaranteeing diversity, equal opportunity, fairness
and no discrimination of any kind. These risks also
include climate change.
In 2023 the on-boarding process was completed at
all the branches acquired in the prior year. In a con-
text characterized by an uncertain and complex
business landscape, periodic changes were made
to the risk scenarios in the main markets and the
production plants. A large group of international
managers was involved in revisiting and updating
the most imminent and impactful risks. At the
same time, the Management Teams of the compa-
nies involved revised the risk map and determined
what they viewed as the most critical risks.
Similar to the prior year, concerns about the global
market conditions continued to dominate in vari-
ous markets. Moving toward a period of post-pan-
demic normalization, the Group faced changes in
the business environment, including the transfor-
mation of the consumers’ preferences, supply
chain difficulties and challenges associated with
technological innovation.
From 2021 to 2023, the operational progress fueled
significant advantages, facilitating timely decisions
in response to global uncertainties. Crucial initia-
tives like the digitalization of the supply chain, di-
versification of the suppliers and centralization of a
few activities at corporate headquarters made it
possible to improve estimates, made the integrated
planning process more efficient, made procure-
ment more flexible and intensified automation of
operations. These measures strengthened the
Group’s operating resilience considerably, as
proven by the quick reaction to the risks associated
with recent logistics issues, like problems in the
Suez Canal.
In order to further strengthen the monitoring of
risks, Internal Audit will monitor exogenous risk fac-
tors closely, deepen the understanding of the ERM
principles and will make ad hoc revisions to risk to-
gether with headquarter departments and local
management during the year. This goal will be
achieved by improving specific tools and launching
new initiatives destined to increase risk
awareness.
Risk factors for the De’ Longhi Group
The risk factors to which the Group is exposed and
that could have a material impact on the De’ Longhi
Group’s business are summarized below.
These risk factors also take into account the above
mentioned ERM project and the assessments car-
ried out in current year and in prior years including
through more in-depth analyses shared with the
Risk, Control, Corporate Governance and Sustaina-
bility Committee and De’ Longhi S.p.A.’s Board of
Statutory Auditors.
With regard to the main risks highlighted below, the
De’ Longhi Group constantly monitors any situa-
tions and changes in macroeconomic and market
trends, as well as demand, in order to implement
any necessary and timely strategic actions.
In addition to the risk factors and uncertainties
identified in this report, other risks and events not
currently foreseeable or thought unlikely, could also
influence the business, the economic and financial
conditions and prospects of the De’ Longhi Group
1 - Risks relating to macroeconomic trends:
the De’ Longhi Group’s economic perfor-
mance and financial position are also affect-
ed by macroeconomic trends such as:
The main risk factors relate to:
• consumer trends;
• the cost of raw materials;
• interest rates and the foreign exchange markets;
• any policy changes made in a few key markets;
• any disturbances, riots and strikes or other types
of demonstrations;
• any epidemics and/or serious health related situ-
ations (like the prolonged coronavirus
emergency).
The current situation of general instability material-
ized at the same time in the world’s main developed
economies, albeit to varying degrees and for differ-
ent reasons. In Europe, the conflict in Ukraine and
logistical disruptions due to the crisis in the Red
Sea impact investments and the availability of
products in the markets, as well as influencing the
on-time delivery of components to European pro-
duction plants. In China, a slowdown in economic
growth is observed combined with a crisis in the
real estate sector. In the USA, intense inflationary
pressures, due to fiscal policies, and the risk of a
recession triggered by significant increases in inter-
est rates. The conflict in Gaza also contributed to
the deterioration of a situation of great instability in
countries in the Middle East.
The Group monitors these economic trends period-
ically in order to take quick strategic action as
needed.
The Group is also subject to the risks stemming
from local conflicts which can also affect key mar-
kets, as was the case in Ukraine.
These events are not foreseeable, but as a result of
past experiences the Group is able to react and im-
plement all the measures needed to limit the con-
sequences, as was the case in 2020/2021 when,
due the global health crisis, the Group had to face
an unprecedented level of market uncertainty.
The persistence of these situations, however, could
interrupt and/or limit the Group’s activities which
would have an impact on economic and financial
results.
2 - Socio-political risks relating to market
trends and demand, and to the Group’s pres-
ence in emerging markets. The De’ Longhi
Group does business in many foreign mar-
kets, primarily on a direct basis and through
agreements in certain emerging countries
like China.
The Group has therefore long had the characteris-
tics typical of a multinational company and this in-
evitably exposes it to a number of risks relating to
economic conditions and policies of the individual
countries in which it operates.
De’Longhi Group
|
02 Report on operations 31
These risks not only affect consumption trends in
the various markets concerned, but may also be
relevant in terms of concentration of the Group’s
production sites in foreign markets if polices were
introduced that limit or restrict foreign investment,
imports and exports or capital repatriation.
These are systemic risks, common to all business-
es, for whom the ability to generate value depends
first on the dynamics and size of the market and
only second, on their ability to compete and consol-
idate/acquire the largest possible market share.
The Group, in the persons of the Chief Executive
Officer, and the division and market managers, con-
stantly monitor market trends in order to promptly
seize opportunities to increase business and to
assess the likelihood of any risks (and their poten-
tial effects on the Group’s results).
Any political and econonmic events that occur in
the markets where the De’ Longhi Group operates
(particularly in emerging markets) could have an
unfavorable economic and financial impact.
3 - Risks relating to strong competition in the
sectors in which the De’ Longhi Group op-
erates: the business in which the De’ Long-
hi Group operates is highly competitive and
there is a tendency for the business to be con-
centrated in a few important players which
puts strong pressure on margins.
The Group competes with other major international
industrial groups. The target markets are highly
competitive in terms of product quality, innovation,
price, energy saving, reliability, safety and assis-
tance. The market is also impacted by any consum-
ers habits/preferences change.
The preferred sales channel (the trade) is, further-
more, becoming increasingly more concentrated in
a few international players in several of the main
markets, including due to the exponential growth of
e-commerce.
The Group, therefore, must adopt effective strate-
gies to offset this risk. Toward this end, the strength
of the brands and ability to have an adequate retail
offering are key.
The inability to address its external environment ef-
fectively could have a negative impact on the
Group’s business prospects, as well as on its eco-
nomic results and financial position.
4 - Risks involved in relation to supply agree-
ments and strategic alliances: the Group also
operates through agreements with strategic
partners that foresee the development, pro-
duction and marketing of products, particu-
larly coffee makers sold in international mar-
kets.
Consequently, the Group’s failure to maintain or
renew these agreements could impact consolidat-
ed economic results and the financial position.
These agreements, which are generating very posi-
tive results in terms of growth and development as
well as full satisfaction both for De’ Longhi Group
and for strategic partners, are carefully managed
and monitored by top management.
De’Longhi Group
|
02 Report on operations 32
5 - Risks relating to the De’ Longhi Group’s
ability to achieve continuous product inno-
vation: the De’ Longhi Group’s ability to gen-
erate value also depends on the ability of its
companies to offer technologically innovative
products that respond to market trends.
In this respect, the Group is still proving to be a
leader in technological innovation and in creating
new in-vogue designer products, also thanks to the
importance it places on those working in product
development and design, which it intends to main-
tain in the future.
In particular, if the Group were unable to develop
and continue to deliver innovative, competitive
products relative to its major competitors in terms
of price, quality and functionality, amongst others,
or if there were delays in the market launch of
models strategic to its business, the Group could
lose market share, with an adverse impact on its
business prospects, as well as on its economic per-
formance and/or its financial position.
6 - Risks relating to patents and trademarks.
Given the importance of developing products
that are innovative in both technology and
design (see point 5 above), the Group pursues
a policy of protecting its research and devel-
opment by registering patents for inventions,
utility models and designs in the various mar-
kets concerned; similar protection must be
assured for the Group’s trademarks.
The Group’s legal offices are responsible for the
legal protection of industrial property rights (pat-
ents for inventions, utility models, designs and
models as well as trademarks) and constantly
monitor and control the situation around the world,
using the services of specialist consultants in the
various countries concerned.
Such actions cannot absolutely guarantee that the
Group’s products will not be imitated and further-
more, certain jurisdictions (such as China and the
United Arab Emirates) do not protect property
rights to the same extent as European law.
The Group’s policy is nonetheless based on incur-
ring the necessary costs to ensure that its property
rights have the greatest possible global protection
in the various markets where it operates.
Moreover, there is no guarantee that protection of
the industrial property rights still in the registration
process (and, in particular, patents for inventions
and utility models) will be actually granted as filed,
since the extent of protection may be reduced -
even significantly - not only as a result of technical
examination by the competent office but also as a
result of opposition to the registration and licensing
of the rights that might be presented by third
parties.
Lastly, although the Group does not believe that its
products infringe third-party property rights, it is
not possible to exclude that third parties might suc-
cessfully claim that such infringements exist, in-
cluding through legal proceedings.
7 - Exchange rate fluctuation risks: The Group
does business in many foreign markets and is
exposed to the risk of fluctuations in currencies.
The unfavourable trend as well as the aforemen-
tioned exposure to the currency risk, might lead to
unexpected loss in margins, especially in some
specific markets where the subsidiaries of the
Group operate.
For the purposes of protecting its income state-
ment and statement of financial position from such
fluctuations, the Group adopts a suitable hedging
policy and tools, free from speculative
connotations.
Hedging is carried out centrally by a special team
on the basis of information obtained from a de-
tailed reporting system, using instruments and pol-
icies that comply with international accounting
standards. The hedging activity is planned each
year when the annual budget is approved (or when
the three-year plan is approved) and updated peri-
odically based on the exposures and the definition
of an effective hedging horizon, in order to mini-
mize the volatility of the currency portfolio and
maximize the benefit of the hedge; the financial and
trade receivables/payables are also protected. As
for the hedging of the economic risk of costs and
revenues, the degree of hedging is defined based
on market performance and a cost/benefit
analysis.
The main currencies to which the Company is ex-
posed are the Chinese renminbi and the currencies
of the main export markets (the British sterling, the
Japanese yen, the Australian dollar, the Polish zloty,
the Canadian dollar, etc). The US dollar is a curren-
cy which is basically a natural hedge insofar as
sales in the USD have increased in the past few
years to the extent that purchases can be offset in
the same currency. Significant fluctuations in the
main currencies could also increase the translation
risk stemming from the conversion of financial
statements of the Group’s foreign subsidiaries, re-
sulting in higher financial charges.
Despite the Company’s effort to minimize these
risks, sudden currency fluctuations could have an
adverse impact on the Company’s results and busi-
ness prospects.
8 - Risks relating to manufacturing, commod-
ity prices and supplier relationships.
Production is carried out at facilities in Italy, Roma-
nia and China and, therefore, balanced across three
different geographic regions which reduces the risk
that operations will be interrupted.
The Group’s production costs are influenced by the
prices and the availability of the most important
raw materials like steel, plastic and copper. Energy
costs may also have a significant impact on pro-
duction costs, as happened recently when strong
inflation, exacerbated, in Europe, by the conflict in
Ukraine, drove energy prices higher.
A significant portion of the purchases are made in
China; the related risks are associated with produc-
tion by Chinese subsidiaries that serve as suppliers
to the Group, by the network of key third-party sup-
pliers and by suppliers of parts to the Group’s man-
ufacturing subsidiaries (see point 2 for the strate-
gic risks of manufacturing in China).
The Group manages these risks through:
a. a permanent evaluation system for the various
suppliers, used for decision-making purposes
and to identify the reliability of each recurrent
supplier in terms of quality and price of the
products supplied;
b. assessment of the risk of fluctuation by the Chi-
nese currency against the US dollar, the Group’s
reference currency which is protected by the
De’Longhi Group
|
02 Report on operations 33
Group’s hedging policies;
c. review of the financial status of suppliers and
hence of the allocation of appropriate produc-
tion volumes to each supplier;
d. evaluation of the services provided by suppliers
in terms of logistics and timeliness of deliveries
and of the consequent decisions adopted each
time;
e. a network of reliable and trustworthy key suppliers;
f. inspections, prior to product shipment by sup-
pliers, intended to prevent any defects in the
quality of products acquired.
g. periodic assessment of the buy/make strate-
gies for the Group’s main products taking into
account any global market conditions that
could result in the need to change the strategy.
Lastly, the Group defends its reputation with suppli-
ers in their dealings with employees. Such caution
is duly reflected in contractual dealings and further-
more, every supplier is given a copy of the De’
Longhi Ethical Code governing all its activities.
In 2022 a Group Supplier Code of Conduct, which
describes the ethical, social and environmental
standards that Group suppliers must comply with,
was also finalized and shared with suppliers. The
“Group Responsible Sourcing Guidelines”, which
contain the risk assessment principles to be used
to evaluate and monitor suppliers’ social risk cor-
rectly, were also issued and periodically updated.
Nevertheless, it is conceivable that a breach of con-
tract by one or more suppliers to Group companies
could have adverse effects on the Group’s opera-
tions, economic performance, assets and liabilities
and financial position.
The price of these raw materials and parts can fluc-
tuate significantly, depending on several factors, in-
cluding the cyclical nature of the markets con-
cerned, supply conditions and other factors beyond
the Group’s control and difficult to predict.
The trend in the price of these raw materials and
parts is constantly monitored in order to take nec-
essary action to keep the Group competitive. At the
date of the present report the Group doesn’t hedge
the risk of floating of raw materials prices.
There is also a potential risk stemming from the de-
pendence on one supplier for a few types of parts
used for strategic products: in the face of this risk the
Group has begun looking for secondary suppliers and
defining an alternative purchase/production strategy.
Lastly, the risk stemming from market situations
characterized by anomalies in the supply of raw
materials and parts, as well in the market condi-
tions, is addressed by the Group in a timely manner
in order to preserve margins and supply chain
continuity.
9 - Risks relating to organization and human
resources management: The Group’s success
largely depends on the ability of its executive
directors and other members of management
to effectively manage the Group and the in-
dividual areas of business and on the profes-
sionalism of the human resources that it has
been able to attract and develop.
The principal risks relating to human resources are
linked to the Group’s ability to attract, develop, moti-
vate, retain and empower staff who have the nec-
essary talent, values, and specialist and/or mana-
gerial skills to satisfy the Group’s changing needs.
The loss of such individuals or other key employees
without adequate replacement, or the failure to at-
tract and retain new qualified resources could
therefore adversely affect the Group’s business
prospects, as well as its economic performance
and/or financial position.
In terms of being able to attract quality resources,
the Group’s principal companies plan actions to im-
prove the quality of working environment for its
employees and staff as well as the Group’s external
image (communication, contact with schools and
universities, testimonials, internships, etc.), in some
cases using the services of specialist professional
firms with a proven track record.
In terms of motivating and developing personnel,
actions taken include the strengthening of mana-
gerial, specialist, business and regulative compe-
tencies, with initiatives that involve managers and
staff from different areas of the business.
The salary review process also includes reward
systems for employees at various levels in the
organization - from the plant worker through to
top management and key people - which are
linked to the achievement of short-term and/or
medium/long term targets.
As far as plant personnel is concerned, the Group
De’Longhi Group
|
02 Report on operations 34
operates in China and Italy and in Romania. Having
a production facility in Eastern Europe has made it
possible to diversify the Group’s industrial platform,
so as to partly restore the balance in production
between the previously dominant China.
With regards to the Chinese platform, certain risks
exist associated with macroeconomic factors, high
turnover of the manufacturing workforce and the
difficulty in finding production personnel. More in
general, there are many countries in which it is hard
to find personnel with adequate professional skills
when there is a strong recovery in demand; in a few
instances, the gradual aging of the population and
the exit from the workforce as a result of retire-
ment, have increased these difficulties.
These risks are managed through the development
of incentive systems to foster staff retention (pro-
duction bonuses and retention bonuses spread
over time for workers, wage increases linked to
length of service, and incentive schemes for man-
agement), policies for recruiting and managing pro-
duction staff, investment in training and developing
more qualified internal resources, improvements in
living and working conditions within the various
factories (canteens, recreational and leisure activi-
ties, internet access).
As for Romania, where the Group has gradually in-
creased its presence over the last few years, cur-
rently there are two production plants operating in
two distinct areas, also to maximize access to
human resources.
In a business context characterized by complexity
and considerable uncertainty, the need to maintain
flexibility in managing production volumes and,
consequently, the necessary workforce has in-
creased. The lack of adaptability to external factors
could cause slowdowns in production and nega-
tively impact operations, as well as the Group’s eco-
nomic and financial situation.
10 - Risks relating to product quality and
product liability: The Group’s products have
to meet different quality standards according
to the different jurisdictions in which they are
marketed.
The main risk is that products do not meet the qual-
ity standards required by the different regulations
in such jurisdictions. This could justify the return of
such products, with increased costs of production
and an impact on the Group’s image that could
harm its reputation.
The activities of the De’ Longhi Group involve it as-
suming typical producer liability for damage
caused by defective products: part of its sales take
place in jurisdictions (like the USA) where the rules
governing liability for damage caused by products
to people or things are particularly strict.
The Group therefore applies strict standards of
control to its products: it has a protocol for manag-
ing quality risk that involves a series of activities
and procedures in defence of product quality; there
is also a special team that controls quality directly
in manufacturing units and at supplier locations.
In addition, the Group has product liability insur-
ance that is deemed adequate to cover these risks.
Nonetheless, it is conceivable that such insurance
coverage could be inadequate for manufacturing
defects in some of the Group’s products or in other
circumstances. The initiation of significant product
liability claims, or the identification of defects in the
Group’s products, could harm the Group, with ad-
verse consequences for the management and de-
velopment of its business.
11 - Risks relating to inventory levels and de-
livery punctuality: In view of the importance
of inventory and supply chain management
within the Group’s organization, certain risks
can be hypothesized: in fact, the Group is
exposed to a stock level risk, associated with
correctly predicting product quantities and
assortment for subsequent sale.
In the event the Group did not have an adequate
quantity of products available, it could run the risk
of failing to adequately and promptly meet custom-
er demand; if, however, the quantity of products ex-
ceeds orders, the Group might face the risk of
unsold stock or higher than expected stock result-
ing in charges which could affect working capital
and cash flow absorption.
Another risk stems from supply chain manage-
ment inefficiencies which could compromise cus-
tomer service.
The Group currently has a supply chain division and
procedures developed to manage forecasting and
planning are integrated in the IT systems which en-
sures the planning and management of every stage
of the supply chain; recently an important program
was launched which aims to improve the supply
chain procedures. It is in the process of being
implemented.
As for the standard of customer service, the
Group’s procedures require that each customer’s
individual needs are taken into account.
If the Group is unable to predict and/or respond to
issues that could give rise to these risks, there
could be adverse consequences for the Group’s
business, economic performance, assets and liabil-
ities and financial position.
12 - Risks relating to IT systems: The infor-
mation systems of a complex international
group are an important and delicate part of
the company’s processes.
The risks involved include events that could jeop-
ardise the ability to provide continuous service, the
safekeeping of data, obsolescence of telecommu-
nications and data processing technologies.
Cyber-attacks are a threat to any sector and there
has been a general, gradual increase in cy-
ber-crimes. Cyber Risk, namely the risk of financial
losses, interruptions or damages to an organiza-
tion’s reputation, stemming from accidents (for ex-
ample, shutting down servers) or intentional acts
(for example, theft of sensitive data) which damage
the IT system, has, therefore, become increasingly
important.
The Group has taken the steps needed to limit the
above mentioned risks which include the standard
security devices used to protect systems and hard-
ware (from the use of back-up devices to
De’Longhi Group
|
02 Report on operations 35
outsourcing with specialized companies). Continu-
ous technological updates are assured by the prev-
alent use of the SAP platform. While the Group has
taken all the steps needed to minimize these risks,
catastrophic events that could compromise the in-
formation systems cannot be excluded.
The Group has launched a multi-year Cyber Risk
Management project in order to analyze any prob-
lem areas and take the actions needed to safe-
guard against this type of risk.
13 - Credit risk: The Group is exposed to credit
risk on its trading activities.
The socio-political (or country) risks discussed ear-
lier (see point 2) could also have an impact on
credit risk; the same applies to the market risks in
relation to the ongoing concentration in the retail
business and to the strengthening of the e-com-
merce channel that may cause the crises of some
retailers (see point 3).
Trade credit risk is monitored using the procedures
developed for the selection and assessment of the
client portfolio, the determination of credit limits,
for tracking payment inflows and any credit collec-
tion activities. Insurance policies with major insur-
ers must be stipulated and, in a few instances, cli-
ents must provide additional guarantees, mainly
bank guarantees.
However, these procedures might not be sufficient
to prevent losses related to the credit risk, that
could affect the Group’s result.
14 - Risks arising from the seasonality of sales:
The De’ Longhi Group’s sells, amongst others,
seasonal products as air conditioners and
portable radiators.
These products, which represent approximately 7%
of the total revenues, are typically seasonal with their
sales concentrated in a limited period of the year.
Seasonality of sales could adversely affect the
Group’s business prospects, as well as its economic
performance and/or financial position.
15 - Risks relating to changes in the regulatory
framework, particularly concerning environ-
mental protection: The Group is subject, in
the various jurisdictions in which it operates,
to the national and international legal re-
quirements and technical standards applica-
ble to the type of products sold.
Particularly important are safety and energy con-
sumption standards for domestic electrical appli-
ances and regulations on consumer contracts, de-
fective products, minimum warranty periods,
recyclability and environmental compatibility.
Although De’ Longhi S.p.A. considers that the
Group’s organization and production comply with
current regulations and that the Group has demon-
strated over time its ability to anticipate regulatory
changes when designing new products, the enact-
ment of additional regulatory requirements applica-
ble to the Group or its products or changes to the
legislation currently in force in the sectors in which
the Group operates, including at an international
level, could require it to adopt stricter standards or
affect its freedom of action or strategic decisions
in various areas of business.
This could result in compliance costs for its pro-
duction facilities or products or even limit the
Group’s operations, with a consequently adverse
effect on its business, economic performance,
assets and liabilities and financial position.
In particular, any changes in environmental regula-
tory standards or requirements currently in force
and the occurrence of unforeseen or exceptional
circumstances, could require the Group to incur un-
anticipated costs. Such costs could therefore have
an adverse impact on the Group’s business, eco-
nomic performance, assets and liabilities and fi-
nancial position.
16 - Risks relating to environmental dam-
age: The industrial production carried out by
the Group with its factories and equipment
could, in certain cases of serious faults or
breakdown in such equipment, cause dam-
age to third parties, accidents or environmen-
tal damage.
Such accidents and damage could also occur in
view of the structural characteristics of certain pro-
duction facilities for which assessments and work
are in progress to make them comply with current
laws and regulations.
Although the Group has taken the necessary safety
precautions and complies with the applicable regu-
lations for preventing these types of risks, if there
was an accident or damage to the environment, the
Group could be held liable, including criminally, by
the people harmed and by the competent authori-
ties, and its production activity could be disrupted,
with consequent adverse effects on the company’s
and/or Group’s economic performance, assets and
liabilities and financial position.
Although Group companies have taken out insur-
ance policies against environmental damage, with
the related coverage considered reasonable in rela-
tion to the estimated risk in question, it is nonethe-
less not possible to exclude the occurrence of
damage, in which the compensation payable ex-
ceeds the maximum coverage provided by such
policies.
17 - Liquidity and financing risks - Interest
rate risk: The liquidity risk possibly faced by
the Group is the risk of not having the funds
needed to fulfil payment obligations arising
from operating and investment activities and
from the maturity of financial instruments.
The Group holds assets and liabilities that are
sensitive to interest rate changes and that are
necessary to manage its liquidity and finan-
cial needs.
It is the Group’s policy to maintain a sufficiently
large portfolio of counterparties of international
repute for the purposes of satisfying its financing
and hedging needs.
The Group uses specific policies and procedures for
the purposes of monitoring and managing this risk,
including the centralized cash management (financial
debt and cash management, the raising of medium
De’Longhi Group
|
02 Report on operations 36
term loans from fluctuations in the interest rates
and has also created a natural hedge by matching
the duration of financial investments with that of fi-
nancial liabilities.
18 - Compliance and corporate reporting risks:
A. Financial reporting: Risks associated with the re-
liability of financial reporting, particularly that the
information contained in the annual and interim fi-
nancial reports might not be correct, warrant par-
ticular attention, especially for a listed company.
In 2023, the effective application of the risk man-
agement system for financial reporting was moni-
tored continuously, as well as assessed periodical-
ly, under the guidance of the functions in charge.
For the purposes of ensuring reliable internal finan-
cial reporting controls, the Group implemented a
system of administrative and accounting proce-
dures which include the accounting policy instruc-
tions, principles and updates, as well as other pro-
cedures for preparing the consolidated financial
statements and the periodic financial reports.
The Group’s Corporate functions are responsible
tion of collection flows.
In 2023 there was a sudden change in monetary
policies which resulted in a significant increase in
interest rates.
The management of this risk is centralized and
done using the same structure used to manage for-
eign exchange risk. Nevertheless, sudden fluctua-
tions in interest rates could have an adverse impact
on the Group’s business prospects, as well on its
economic results and/or financial position.
At the date of this report, the Group has one hedg-
ing agreement which protects the medium/long
and long-term finance on capital markets and the ob-
taining of short-term credit lines that allow wide room
for manoeuvre when managing working capital and
cash flows). In relation to the interest rate risk, the
Group as of 31 December 2023 has a positive net fi-
nancial position and is exposed, mainly on the
medium/long term, in order to benefit from the finan-
cial market trends. The Group also has short-term
bank credit lines (typically with annual renewal), to
cover any financing or other operational needs.
Lastly, a revolving agreement for factoring without
recourse is also in place which allows for optimiza-
De’Longhi Group
|
02 Report on operations 37
for ensuring that other Group companies are aware
of and adhere to these procedures.
The control bodies (internal and external) carry out
the related audits to the extent of their
responsibilities.
Any failure to maintain adequate processes, as well
as adequate administrative-accounting and man-
agement controls, may result in erroneous financial
reporting.
In addition to financial reports, the Group also pre-
pares a Non-Financial Statement based on the GRI-
2021 principles and each year instructs the branch-
es and the competent functions as to which
non-financial indicators should be reported on.
B. Risks relating to the administrative liability of
legal: In compliance with EU directives, Decree
231/2001 has introduced into Italian law special
rules applying to the liability of entities for certain
offences, where “entities” mean limited liability
business enterprises, partnerships or associa-
tions, including those without legal status.
Under this legislation and amendments and addi-
tions thereto, the Group’s main Italian companies
have adopted, in accordance with art. 6 of Decree
231/2001, the “Model of organization, manage-
ment and control” suitable for avoiding the occur-
rence of such liability at their own expense and the
related “Ethical code”, intended to apply not only to
the Group’s Italian companies but also, as far as
applicable, to its foreign subsidiaries, since De’
Longhi S.p.A. is also answerable, under art. 4 of
Decree 231/2001, for offences committed abroad.
Therefore, the company’s administrative liability
under Decree 231/2001 could exist when this is ef-
fectively established as a result of an action
brought against one of the Group companies,
including the foreign subsidiaries; in such a case, it
is not possible to exclude, in addition to the result-
ing application of penalties, adverse consequences
for the company’s and/or Group’s operations, eco-
nomic performance, assets and liabilities and fi-
nancial position.
19 - Related parties: The Group has had and
continues to have transactions of a commer-
cial nature with related parties. Such trans-
actions carry conditions that are in line with
market ones.
The Company adopted a new set of procedures to
govern the Group’s transactions with related par-
ties, in compliance with the standards set by the
supervisory authorities in CONSOB Regulation
17221 dated 12 March 2010.
The procedures identify those related party trans-
actions subject to specific examination and ap-
proval rules, which change according to whether
such transactions are above or below defined
thresholds. The procedures place particular impor-
tance on the role of the independent directors, who
must always issue a prior opinion on the proposed
transaction (if the transaction qualifies as material,
this opinion is binding on the Board of Directors);
the independent directors must also be involved in
the preliminary examination of material transac-
tions prior to their approval.
These procedures are considered to represent an
additional guarantee of the transparency of the De’
Longhi Group’s operations.
De’Longhi Group
|
02 Report on operations 38
Annual
remuneration report
Reconciliation of net equity
and profit (loss) for the year
Please refer to the Annual Remuneration Report for all relevant information not contained in the present
report.
Below is a concise reconciliation between net
equity and profit of the parent company, De’ Longhi
S.p.A., and the figures shown in the consolidated fi-
nancial statements:
Net equity
31.12.2023
Profit for 2023
Net equity
31.12.2022
Profit for 2022
De' Longhi S.p.A. financial statements 557,569 36,578 588,531 100,808
Share of subsidiaries' equity and results for period attributable to the Group,
after deducting carrying value of the investments
834,186 218,905 649,687 59,442
Allocation of goodwill arising on consolidation and related amortization and
reversal of goodwill recognized for statutory purposes
464,525 (444) 465,679 5,308
Elimination of intercompany profits (45,425) (4,613) (40,820) 14,286
Other adjustments 284 (14) 314 (1)
Consolidated financial statements 1,811,139 250,412 1,663,391 179,843
Minority - 35 4,274 2,415
Consolidated financial statements-Group portion 1,811,139 250,377 1,659,117 177,428
De’Longhi Group
|
02 Report on operations 39
Treasury shares
At 31 December 2023 the Group, through the
parent company De’ Longhi S.p.A., held 595,000
treasury shares for a total of €9,658 thousand, pur-
chased in previous years. The change versus the
value as at 31 December 2022 (De’ Longhi S.p.A.,
held 895,350 treasury shares for a total of €14,534
thousand) is due to the exercise of n.300,350 op-
tions within the “2020-2027 Stock Option Plan”.
During the Shareholders’ Meeting held on 21 April
2023, shareholders approved the renewal - after re-
voking the previous authorization granted by share-
holders - of the authorization to purchase and sell
treasury shares for up to a maximum of 14.5 mil-
lion ordinary shares or for an amount which does
not exceed one fifth of the share capital, including
any shares held by the Company or any of its
subsidiaries.
The buyback program was approved, in accord-
ance with the law, for a period of up to a maximum
of 18 months (namely through 21 October 2024).
De’Longhi Group
|
02 Report on operations 40
Tax consolidation
Related party transactions
The Parent Company De’ Longhi S.p.A. and a few of the Italian subsidiaries exercised, jointly with the consol-
idator De Longhi Industrial S.A., the option to adhere to group taxation, referred to as “Domestic Tax Consol-
idation”, as permitted under articles 117 - 129 of the Consolidated Income Tax Act (TUIR) as per Presidential
Decree n. 917 of 22 December 1986, and the Decree of the Ministry of Economy and Finance of 1 March
2018, for the three-year period 2022-2024.
Related party transactions fall within the normal course of business by Group companies.
Information on related party transactions is summarized in Appendix 3 to the Explanatory notes.
De’Longhi Group
|
02 Report on operations 41
Alternative
performance indicators
In addition to the information required by IFRS, this
document presents other financial measures
which provide further analysis of the Group’s per-
formance. These indicators must not be treated as
alternatives to those required by IFRS.
More in detail, the non-GAAP measures used
include:
• Net industrial margin and EBITDA: the Group
uses these measures as financial targets in in-
ternal presentations (business plans) and in ex-
ternal presentations (to analysts and investors),
since they are a useful way of measuring operat-
ing performance by the Group and its individual
divisions besides EBIT.
Net industrial margin is calculated as total reve-
nues minus the cost of materials consumed and of
production-related services and payroll.
EBITDA is an intermediate measure that derives
from EBIT after adding back depreciation, amorti-
zation and impairment of property, plant and equip-
ment and intangible assets. EBITDA is also pre-
sented net of non-recurring items, which are
reported separately on the face of the income
statement.
• Net working capital: this measure is the sum of
inventories, trade receivables, current tax assets
and other receivables, minus trade payables, tax
liabilities and other payables.
• Net operating working capital: this measure is
the sum of inventories and trade receivables,
minus trade payables.
• Net capital employed: this measure is the sum of
net working capital, intangible assets, property,
plant and equipment, equity investments, other
non-current receivables, and deferred tax assets,
minus deferred tax liabilities, employee sever-
ance indemnity and provisions for contingencies
and other charges.
• Net financial position: this measure represents
financial liabilities less cash and cash equiva-
lents and other financial receivables; the position
with banks, net of non-banking items, is also re-
ported. The individual line items in the statement
of financial position used to determine this
measure are analysed later in this report.
The figures contained in this report, including some
of the percentages, have been rounded relative to
their full euro amount. As a result, some of the
totals in the tables may differ from the sum of the
individual amounts presented.
De’Longhi Group
|
02 Report on operations 42
Consolidated
Non-Financial Statement
2023
Introduction
This consolidated Non-Financial Statement (NFS) of
the De’ Longhi Group was prepared in accordance
with Articles 3 and 4 of Legislative Decree n.254/2016,
which is the Italian law implementing the provisions
of the “Barnier Directive” (Directive 2014/95/EU)
based on which large public entities are required to
publish a Non-Financial Statement (NFS).
In fulfilling these obligations above, De’ Longhi’s
NFS 2023 identifies and describes a group of
topics which are deemed material for both the
Group and its stakeholders. The information rela-
tive to these topics is included in this report which
aims to describe the risks, policies, practices, ob-
jectives, the organizational structure, along with the
main performance indicators relating to environ-
mental and social topics, as well as human re-
sources, respect for human rights and the fight
against corruption and fraud. This reporting
method guarantees the company’s transparency
with respect to its stakeholders and the most rele-
vant non-financial topics. Furthermore, Budget
Law n.145/2018, which took effect as of 31 De-
cember 2018, introduced paragraph 1073 which
amended Legislative Decree 254/2016 and in addi-
tion to disclosing the main risks, entities are also
required to describe how the risks are managed.
This report, which has reached its seventh edition,
refers to the reporting period 1 January 2023
through 31 December 2023; at the same time, the
report provides the reader with a comparison of the
results reported in 2021 and 2022. The process in-
volved in identifying important impacts and the rela-
tive material topics, introduced in the 2021 GRI
Standards, is described in the Note on Methodology.
This report also incorporates the recommenda-
tions which are provided each year by the European
Securities and Markets Authority (ESMA), which for
this year were published on 25 October 2023. The
recommendations included for non-financial re-
porting focus on three main areas: European taxon-
omy; the targets, actions and progress made rela-
tive to climate change; and information relating to
Scope 3 emissions.
With regard to the European Taxonomy, reference
should be made to the chapter European Taxonomy
which includes the details of the qualitative and
quantitative information related to the three KPI and
the environmental targets referred to in the Taxono-
my. The “Mitigation of environmental impact” chap-
ter provides details of the Group’s performance rela-
tive to climate change: the report examines the
actions taken and the progress made in this regard.
Without making any disclosures, the Company does
monitor the Scope 3 emissions along the value
chain: the possibility of expanding the information
provided to include climate change and indirect
emissions, consistent with the new reporting direc-
tive, in future reporting periods is being assessed.
On 5 January 2023 the new “Corporate Sustainabili-
ty Reporting Directive” (CSRD) took effect which
substitutes the “Non-Financial Reporting Directive”
(NFRD) implemented in Italy by Legislative Decree
in 254/2016 which requires all listed companies, as
of the 2024 reporting period, to prepare a renewed
sustainability statement. Based on the most rele-
vant changes, the report must be based on the con-
cept of “double materiality” which calls for the iden-
tification of environmental and social impacts is
generated along the value chain, as well as the
Group’s risks and opportunities. This new regulato-
ry framework will make it necessary to adopt the
new reporting standards, the “European Sustaina-
bility Reporting Standards” (ESRS), instead of the
GRI Standards. In 2023, De’ Longhi began working
on compliance with the Directive’s new requirement
in preparation for the next reporting year.
Description of the Business Model
A brief description of the De’ Longhi Group’s busi-
ness model is included below in order to provide a
general overview which will help the reader to
better understand the information provided in the
report and the material topics identified under Leg-
islative Decree n.254/2016.
De’ Longhi S.p.A. (hereinafter also referred to as the
De’Longhi Group
|
02 Report on operations 43
“Company” or “Group”), was born in 1974 and listed
in 2001 on the Borsa Italiana’s Euronext market.
The Company is one of the world’s leading players
in small domestic appliances associated with the
world of coffee, the kitchen, air conditioning, as well
as home care, and distributes its products in more
than 120 markets worldwide. Lastly, it is the hold-
ing of a portfolio of companies which control seven
brands: De’ Longhi, Kenwood, Braun, Ariete, Ever-
sys, Nutribullet, Magic Bullet (the last two belong to
the American group Capital Brands).
De’ Longhi’s sustainability path
The De’ Longhi Group has built its sustainability
path over the years with a view to understanding
and analyzing its economic, social and environ-
mental role in an increasingly in-depth manner, gen-
erating more value for the company and its stake-
holders. This objective is pursued through the
implementation of concrete actions, like the adop-
tion of a sustainability strategy which aims to miti-
gate any impacts generated and improve the sus-
tainability performances, which guarantee
transparent, reliable and continuous
communication.
2023 was a year of stabilization for the Group in the
wake of the changes made in prior years during
which the composition and management of its
sustainability governance changed. Currently the
corporate bodies and individuals charged with pur-
suing the sustainability goals continue to be:
1. the Control, Risk, Corporate Governance and
Sustainability Committee, already operational
in 2019, is a Board committee which provides
preliminary, proactive guidance, as well as advi-
sory, functions in relation to sustainability;
2. the Sustainability Steering Committee, formed
in 2019, comprised of top management and dif-
ferent department managers, endorses and
supports the Group’s sustainability strategy;
3. Group Sustainability Director.
2023 marked another and important milestone in
the De’ Longhi Group’s sustainable path. During the
reporting year the Company worked on updating the
prior Sustainability Plan (approved by the Board of
Directors in July 2022). This updated Sustainability
Plan was included in the Medium Term Plan 2024-
2026 (approved by the Board of Directors during the
meeting held on 18 January 2024), thus continuing
to be one of the key enablers.
The Value Chain
Design, quality, and functionality are the elements
which characterize the De’ Longhi Group’s brands and
that have led the Group be recognized worldwide as
leaders in the coffee, food preparation, and comfort
segments. The Company is committed to guarantee-
ing high standards for its consumers, applying an op-
erational approach which begins with Group-wide re-
search, development and design. Marketing, Design
and product line technicians work together with these
divisions. More in detail, R&D takes a transversal ap-
proach, focusing on the business units rather than the
single brands in order to guarantee consistency in the
application of knowhow across the Group. In the
Hong Kong branch, there is also a technical office re-
sponsible for research projects developed in partner-
ship with local providers.
The Group’s operational approach is based on the
concept “local for global” which translates into the
creation of specialized hubs across the different
product lines located inside the six production facil-
ities found in Italy, Switzerland, Romania and China
1
, which focus on specific market segments and
supply about 60% of the products sold.
In order to purchase raw materials and semi-fin-
ished goods, the Group establishes and maintains
relations with qualified partners, selected based on
the quality standards defined in its purchasing poli-
cies or “Original Equipment Manufacturers” (herein-
after also referred to as “OEM”).
The production phase is followed by product test-
ing during which the Group guarantees that the
highest standards for product safety have been ap-
plied to every product going to market. This pro-
cess is managed by specialized technical teams
that are part of the Quality division; the latter,
through internal audits, carries out specific quality
controls of the products and their suppliers. More
in detail, the Company uses a vendor rating to audit
suppliers which focuses on parameters identified
for this purpose. These aspects will be examined
further in the chapter “Supply Chain Management”.
Once certified as ready for sale, the product is
transferred to specific warehouses, located world-
wide, which also act as strategic logistic hubs.
These centers are owned by the Group and facili-
tate the organization of logistics and delivery of
products to all the markets served and to all the
stakeholders involved in De’ Longhi’s distribution
network.
1 In 2023, work began on opening a new Group plant in Satu
Mare, Romania. While it is a pre-existing asset, currently no
production is carried out there and, therefore, it was not in-
cluded in the reporting perimeter, but will become relevant
as of 2024.
De’Longhi Group
|
02 Report on operations 44
Lastly, the Company is committed to guaranteeing
the best service during and after the sale, providing
technical assistance to everyone who purchases a
Group product. This activity is carried out by a Cus-
tomer Care team which, in the past few years, has
taken steps to improve and has adopted new tech-
nologies to respond to market needs.
The Group’s Stakeholders
The De’ Longhi Group recognizes that the success
of a company is based also on its ability to gener-
ate value for itself and all its stakeholders. The
Group interacts with the latter in accordance with
its Code of Ethics, guaranteeing active listening
and an exchange of information based on princi-
ples of fairness, completeness and transparency.
In order to standardize its decision-making pro-
cesses and embrace changes in the market more
effectively, De’ Longhi is committed to listening and
understanding the needs of its stakeholders, antici-
pating their expectations. Toward this end, the
Group continues to manage and maintain relations
with its stakeholders through more effective com-
munication channels and actively involving compa-
ny management. These mechanisms are the prod-
uct of an analysis which took into account the
aspects which are relevant to the company’s struc-
ture, the value chain, the business and other activi-
ties, but which characterize and are an integral part
of the company’s mission. The ten categories of
stakeholders identified, broken down based on the
relation with the Group and the relative types of in-
terests, expectation and needs are reported:
Stakeholders Communication/listening channel Main topics that emerged
Trade associations Annual meetings, periodic meetings Consumer rights, workers’ rights, environmental performance
Shareholders Corporate documents /Shareholders’ meetings/ Events Economic performance, business strategies
Communities and ONG Periodic meetings, sponsorships of specific initiatives
Sponsorships, social impact, contribution to the community,
raising awareness of specific problems
Consumers
Satisfaction questionnaires, panel test, Contact Centers (voice
channels, e-mail, chat and social), advertising campaigns,
cultural events, Youtube “How to” channel
Customer assistance, product safety and quality, product
availability, feedback about ease of use and product satisfac-
tion, privacy
Employees
Employee Engagement Survey, annual performance reviews,
periodic meetings to share results, corporate intranet used to
access Group information, Group house organ, new HRMS
Organizational clarity, improved management of resources by
managers, appreciation of individual contributions to the
company, improvement in internal communications and
access to information
Suppliers Contracts, qualifications, assessments and periodic meetings Way in which supplier relationships are managed
Future generations - Reduce emissions and fight climate change
Financial analysts, media Interviews, meetings, road shows, press conferences
Economic performance, new products/ services/organization-
al models, specific social initiatives
Commercial partners Sales meetings, audit
Product safety and quality, flexibility and adaptability to
requests
Universities/research
institutions
Dedicated meetings, partnerships on different research
projects
Recruiting and talent acquisition, recruiting support
De’Longhi Group
|
02 Report on operations 45
The European
Taxonomy
significant harm (Do No Significant Harm –
DNSH) to any of the above environmental
targets;
– is carried out in way which guarantees the
minimum safeguards, namely the controls
implemented by the Group to guarantee re-
spect for human rights and international laws
governing labor organization along the supply
chain.
Since it took effect in 2020, the Regulation has
been amended on several occasions which have
gradually introduced new sectors and activities.
In 2021, the European Commission approved the
Climate Delegated Act
3
, which governs the first two
climate targets: climate change mitigation and cli-
mate change adaptation. The Climate Delegated
Act has already been amended twice. Firstly, the
Complementary Delegated Act
4
included the gas
and nuclear sectors. Subsequently, with the publi-
cation of Delegated Regulation (EU) 2023/2485 in
2023, other changes were made to the Climate Del-
egated Act, in terms of both new economic activi-
ties and technical screening criteria.
The last change to the perimeter of the Regulation
was enacted in the Environmental Delegated Act
5
,
approved in June 2023, which lists the activities
which contribute to the environmental activities
outside the scope of the climate: sustainable use
and protection of water and marine resources; tran-
sition to a circular economy; pollution prevention
and control; and protection and restoration of biodi-
versity and ecosystems.
2024 marks the third year of Regulation
The European Union Taxonomy, introduced with EU
Regulation 2020/852 (hereinafter the “Regulation”),
adopted by the European Commission on 12 July
2020, is part of an EU strategy for achieving the Eu-
ropean Green Deal targets and making Europe cli-
mate neutral by 2050. The EU taxonomy, which is
applicable to all companies who are required to pre-
pare a Non-Financial Statement pursuant to Direc-
tive 2014/95/EU provides a single classification
system based on which it is possible to define the
economic activities that meet certain eco-sustain-
ability criteria.
More in detail, based on the Regulation economic
activities are broken down as follows:
• Eligible: an activity is eligible
2
if it is listed as one
of the acts recognized in the Regulation as part of
one or more of the six Taxonomy’s environmental
targets. More specifically: climate change mitiga-
tion and adaptation, the sustainable use and pro-
tection of water and marine resources, the transi-
tion to a circular economy, pollution prevention
and control, the protection and restoration of bio-
diversity and ecosystems. If eligible, the activity
has the potential to make a substantive contribu-
tion to the relative target;
• Aligned an economic activity is aligned if, in ad-
dition to being eligible:
– is carried out in accordance with the technical
criteria defined by the European Commission.
More in detail, the economic activity must
make a substantial contribution to one or
more of the environmental objectives de-
fined in Article 9 of the Regulation and do no
application: consistent with the prior year, in 2023
the companies subject to an obligation to publish a
Non-Financial Statement, like the De’ Longhi Group,
shall include in this statement the proportion of
Turnover, CapEx and OpEx pertaining to the eligible
and non-eligible activities referred to in the first two
environmental targets relating to Climate Change.
For the first year of application, the Environmental
Delegated Act requires that non-financial compa-
nies disclose solely the eligible portion of the three
KPIs mentioned above.
The assessment of the Group’s compliance with
the Regulation and the statement with the required
quantitative KPI are provided in the following
paragraphs.
As this regulation is updated constantly, all the cri-
teria and assumptions used are based on informa-
tion and requirements available to date, which
could be revised in the future.
The Analyses Conducted
In light of the changes referred to above which
relate primarily to the publication of the Environ-
mental Delegated Act, the De’ Longhi Group updat-
ed the analysis of its revenue-generating activities
in order to identify, based on the UE Taxonomy,
which could be classified as eligible or potentially
capable of contributing substantially to the six envi-
ronmental targets. Based on this analysis, the eco-
nomic activity “1.2 -Manufacture of electrical and
electronic equipment” of the “Transition to a circu-
lar economy” target was viewed as consistent with
2 Eligible economic activity under the Taxonomy: an eco-
nomic activity described in the delegated acts adopted
pursuant to Article 10, paragraph 3, Article 11, paragraph 3,
Article 12, paragraph 2, Article 13, paragraph 2, Article 14,
paragraph 2, and Article 15, paragraph 2, of EU Regulation
2020/852, independent of the fact that this economic ac-
tivity satisfies one or all of the technical criteria established
in the delegated acts.
3 Delegated Act (EU) 2021/2139
4 Delegated Act (EU) 2022/1214
5 Delegated Act (EU) 2023/2486, adopted on 27 June 2023
and effective as from 1 January 2024.
De’Longhi Group
|
02 Report on operations 46
its core business. The description of this activity
also makes specific reference to the code NACE
(Nomenclature statistique des activités économi-
ques dans la Communeauté européenne) “C27:
Manufacture of electronic equipment”, which coin-
cides with the De’ Longhi Group’s NACE code.
Furthermore, based on Annex 1 of the Delegated
Act (EU) 2021/2178, paragraphs 1.1.2.2 (c) and
1.1.3.2 (c)
6
relating to investments and the pur-
chase of output from eligible economic activities
and individual measures which make it possible for
the activities to maintain low levels of carbon emis-
sions, the Group identified the economic activity
“6.5 - Transport by motorbikes, passenger cars
and light commercial vehicles” as an eligible activ-
ity tied to the “Climate Change Mitigation” target.
The steps taken to assess the alignment of these
activities are described below.
As reported above, for the reporting year 2023 the
alignment analysis refers solely to the activities
listed in the Climate Delegated Act and relative to
the climate target. The analysis of the alignment of
the activities included in the Environmental Dele-
gated Act will be carried out as of the next reporting
year.
Activity 6.5 - Transport by motorbikes, passen-
ger cars and light commercial vehicles – align-
ment assessment
With regard to the investments made by the Group
in the reporting year 2023, the analysis looked at
“6.5 Transport by motorbikes, passenger cars and
light commercial vehicles” of the Climate Delegat-
ed Act:
• Criteria: substantial contribution to the mitiga-
tion of climate change: the assessment aimed
to establish whether or not the single economic
activity identified contributes substantially to
reaching the climate change mitigation goals
based on specific quantitative and/or qualitative
parameters defined in a) and b) defined in the
Regulation;
• Do Not Significant Harm (DNSH): in order to the
aligned with DNSH, the regulation requires com-
pliance with the following criteria:
– Climate change adaptation: based on the criteria
listed in Annex A, the organization must identify
and assess the physical climate change risks
that impact the activity using a specific proce-
dure defined in the Delegated Act;
– Transition toward a circular economy: based
on the criteria outlined at least 85% of the
weight of the vehicles must be reusable or re-
cyclable and measures must be in place for
the management of waste during mainte-
nance and at the end of the fleet’s life cycle;
– Pollution prevention and control: the criteria
outlined require that the vehicles:
– comply with the requirements in the most
recent Euro 6 standards for the emissions
of light vehicles established pursuant to
regulation (EC) n. 715/2007;
– respect the emission thresholds for light
vehicles referred to in Table 2 of the annex
to Directive 2009/33/EC
7
of the European
Parliament and the Council;
– are equipped with tires which comply with
6 Related to the purchase of output from Taxonomy-aligned
economic activities and individual measures enabling the
target activities to become low-carbon or to lead to green-
house gas reductions, notably activities listed in points 7.3
to 7.6 of Annex I to the Climate Delegated Act, as well as
other economic activities listed in the delegated acts
adopted pursuant to Article 10(3), Article 11(3), Article
12(2), Article 13(2), Article 14(2) and Article 15(2) of Regu-
lation (EU) 2020/852 and provided that such measures are
implemented and operational within 18 months.
7 Directive 2009/33/EC of the European Parliament and
Council of 23 April 2009, relating to the promotion of clean
and energy-efficient road transport vehicles.
8 Regulation (EU) 540/2014 of the European Parliament and
Council of 16 April 2014, on the sound level of motor vehi-
cles and of replacement silencing system.
the requirements for rolling noise of the
highest tire class and the rolling resistance
coefficient in the two highest classes as es-
tablished in Regulation (EU) 2020/740 (for
M and N class motor vehicles);
– comply with Regulation (EU) 540/2014
8
of
the European Parliament and the Council;
• Guarantees of the minimum safeguards: the
criteria detailed in the Regulation refer to the or-
ganization’s practices to ensure compliance with
the OECD guidelines for international compa-
nies and the United Nations principles relative to
companies and human rights, including the prin-
ciples and rights established in the eight basis
conventions identified in the ILO Declaration on
Fundamental Principles and Rights at Work and
the Universal Declaration of Human Rights.
The analysis made showed that a portion of the in-
vestments made by the Group is aligned with the
substantial contribution criteria listed in the Cli-
mate Delegated Act, as part of the motor vehicles,
classified as M1 (Vehicles used to transport people,
with 8 seats in addition to the driver’s seat) and N1
(Vehicles used to transport merchandise, of not
more than 3.5t), have emissions of less than 50
gCO
2
/km.
The specificity of the available data, however, is not
sufficient to allow for a complete assessment as to
the compliance with the criteria outlined above for
DNSH. Based on a conservative and prudential ap-
proach, the Group finds that that activity is not
aligned with the DNSH criteria for the reporting
year 2023.
With regard to the guarantees of the minimum
De’Longhi Group
|
02 Report on operations 47
safeguards, the De’ Longhi Group pays great attention
to topics relating to consumer protection, corruption,
competition, tax issues and respect of human rights.
With regard to the latter, the Group is committed to
guaranteeing ethical business practices which comply
with the applicable regulations in all the countries in
which it operates, carrying out its activities in accord-
ance with the principles of the Group’s Code of Ethics
which, as of 2022, is applicable also to all its suppliers.
In addition to this document, the Group also published
“Responsible Sourcing Guidelines” which define the
criteria to be used when assessing and monitoring
new supplier risks over time. The De’ Longhi Group also
audits its suppliers of finished products periodically in
order to assess different social aspects, like the free-
dom of association and collective bargaining, hours
and work conditions, health and safety, child or forced
labor, discrimination and training of personnel. For fur-
ther information refer to the chapters “Ethics and Com-
pliance” and “Supply Chain Management”.
The Group pays particular attention to gender
equality, attested to by the launch of specific initia-
tives relating to DE&I (Diversity Equity and Inclu-
sion). Further information on ongoing initiatives
and indications relative to the workforce (refer to
the “Breakdown of the workforce” and “Composi-
tion of the Parent Company’s BoD” tables) can be
found in the section “Policies and objectives” of the
“Human Resources Management” chapter.
With regard to protection of consumers, competi-
tion, anti-corruption and tax, the Group works con-
stantly to prevent and mitigate any potentially neg-
ative impact. The Group’s Code of Ethics has a key
role in this regard, as great attention is paid to con-
sumers and customers, to fair competition, the
condemnation of corruption and compliance with
the law, regulations and provisions of the
competent tax authorities. For further information
refer to the chapter “Ethics and Compliance”.
Despite what is described above and in light of the
fact that, with regard to the investments made in
the activity analyzed which must take into account
the practices and procedures of the supplier, based
on a conservative and prudent approach, the Group
concluded that the current practices are not suffi-
cient to consider the activity aligned with the mini-
mum safeguards criteria.
Contextual information relative to the
KPI calculation
The assumptions and methodologies used to cal-
culate the KPI for the activities deemed eligible and
possibly aligned, as defined in the Annexes of the
Disclosure Delegated Act
9
, are provided below. The
methods of calculation, the composition in relation
to the different activities provided for in the EU Tax-
onomy and the quantification process are provided
for each of the KPI. In accordance with the Regula-
tion the revenue generated and the costs incurred
for intercompany transactions are not taken into
account.
Group administrative and accounting divisions, rel-
ative to both headquarters and the individual pro-
duction plants, were involved in the KPI calcula-
tions. Based on the indications found in Annex 1 of
the Disclosure Delegated Act, they identified the
accounting items to be associated with the differ-
ent KPI (numerator and denominator), beginning
with the items found in the consolidated financial
statements.
Furthermore, to date no investment plans for
CapEx and OpEx which satisfy the requirements
set out in paragraph 1.1.2.2 have been drafted. For
this reason, the two KPI do not include any plans
for expanding the Taxonomy-aligned economic ac-
tivities or allowing eligible economic activities to
become aligned with the Taxonomy.
Please note that as there are currently no eligible
activities under the Complementary Delegated Act,
the relative tables are not included in this report.
Turnover
The calculation of the denominator was based on
the net sales figure reported in the De’ Longhi’s
Annual Report for 2023 which amounted to
€3,043,086 thousands. The items used specifically
to determine the denominator include the revenue
from the sale of goods and services, net of dis-
counts, VAT or any other direct tax, which reflects
the revenue generated by the Group’s core busi-
ness: more specifically, the item included refers to
“Revenues from client contracts”.
The numerator was calculated based net of the
total revenues included in the denominator ob-
tained from the sale of IT services to third parties
and the sale of accessories net of discounts, re-
bates, VAT and additional taxes. The eligible turno-
ver generated by the Group is associated with Ac-
tivity 1.2 – Manufacture of electrical and electronic
equipment.
CapEx
The denominator was determined based on the in-
creases in value of tangible, intangible and right of
use of assets (as per IFRS 16) recorded during
2023 which amounted to €136,338 thousands.
9 Delegated Regulation (EU) 2021/2178
De’Longhi Group
|
02 Report on operations 48
The numerator was based on the asset additions
reported during the year: investments relative to (a)
10
and (c)
11
as defined in item 1.1.2.2 of Annex I of
the Disclosure Delegated Act were identified. More
in detail, for Activity 1.2 Manufacture of electrical
and electronic equipment – summary of the
Group’s core business– these include investments
in plant, property and equipment, intangible assets
or right of use assets of the production companies
deemed essential to the business activities, which
were, therefore, allocated entirely to the numerator,
with the exception of the portion of fixed assets
classified under (c) of the Regulation.
With reference to (c), the Group identified invest-
ments in IFRS 16 “right of use” assets for Activity
6.5 Transport by motorbikes, passenger cars and
light commercial vehicles. This activity reflects the
investments made in property, plant and equip-
ment (leasing of motor vehicles), the calculation of
which was made using the data provided by the
single legal entity included in the scope of
consolidation.
In light of the allocation of these items to (c), in
order to avoid double counting, the items registered
as “Right of use” for this activity was excluded from
the calculation of the numerator for (a) which refers
to Activity 1.2 Manufacture of electrical and elec-
tronic equipment.
OpEx
The denominator was calculated based on the con-
solidated operating figures which amounted to
€90,564 thousands for the categories referred to in
the regulations including R&D which was not capi-
talized, short-term maintenance and leasing, rec-
ognized in the income statement.
The OpEx numerator was determined using a
method consistent with the one used for the CapEx
KPI. More in detail, R&D and Leasing were
considered instrumental to the core business activ-
ities, as they refer to product development and the
logistics spaces used by the Group companies for
distribution. The portion of these categories was
allocated entirely to the numerator beginning with
the Group’s consolidated figures.
Accounting Policy for the KPI
The Group, after having identified its eligible activi-
ties and assessed any consistency with the align-
ment criteria, calculated the three KPI.
The following paragraphs provide the details of the
accounting items used to calculate the KPI called
for in the Annexes to the Disclosure Delegated Act.
Turnover
The Turnover KPI was calculated as the portion of
the net sales deriving from the services associated
with activities identified as eligible (numerator) di-
vided by net sales (denominator). Net sales is de-
fined as the amount generated by the rendering of
services net discounts and any value added tax di-
rectly associated with the turnover. With a view to
avoiding any double counting, the intercompany
transactions were not included in the KPI calcula-
tion. Consequently, the KPI denominator corre-
sponds to “Revenues from customer contracts”
found in Note 1 of the Group’s consolidated finan-
cial statements – and is in line with the provisions
of IAS 1, par.82(a), mentioned in item 1.1.1. of
Annex I of the Disclosure Delegated Act.
CapEx
The denominator of the CapEx KPI was calculated
based on the asset additions made in the reporting
period to tangible assets (investments in plant,
property and equipment) and intangible assets
(investments in intangible assets) and right-of-use
assets (investments in leased assets).
The approach used to extract the data was based
on an analysis of the consolidated reports. In ac-
cordance with the international accounting stand-
ards and the provisions of Annex 1 of the Disclo-
sure Delegated Act, IAS 16 was used to calculate
the tangible assets, IAS 38 for the intangible assets
– excluding goodwill and IFRS 16 for the right-of-
use assets - as was the case in the consolidated
annual report.
OpEx
The denominator of the OpEx KPI was calculated
based on the Group’s consolidated operating re-
sults and the costs associated specifically with
categories referred to in Annex I of the Disclosure
Delegated Act:
• the technical costs, which include the R&D ex-
penses stemming from internal and external
projects which were not capitalized;
• rental and leasing costs, which include all the
leasing items recognized in the income state-
ment, exempt from IFRS 16 application;
• third party maintenance which includes routine
maintenance of assets and building
renovations.
10 Capital expenditure included in the denominator relative to
assets or processes associated with economic activities
included in the taxonomy.
11 Capital expenditure relating to the purchase of products
derived from economic activities aligned with the taxono-
my and the single measures which consent the target ac-
tivity to lower carbon emissions or reduce greenhouse
gases.
De’Longhi Group
|
02 Report on operations 49
FY 2023 Year Criteria for the sustainable contribution Criteria for “does no significant harm“
Economic activity (1)
Code/s (2)
Turnover (3)
Portion of expenses
invoiced 2023 (4)
Climate change
mitigation of (5)
Climate change
adaptation (6)
W
ater and marine
resources (7)
Circular economy (8)
Pollution (9)
Biodiversity and
ecosystems (10)
Climate change
mitigation (11)
Climate
change adaptation
(12)
Water and marine
resources (13)
Circular economy (14)
Pollution (15)
Biodiversity and
ecosystems (16)
Guarantees minimum
safeguards (17)
Portion of turnover aligned
(A.1.) or eligible (A.2.)
under the taxonomy, 2022
(18)
Category (enabling)
(19)
Cate
gory (transitional)
(20)
k € % Yes;No;N/AM Yes;No;N/AM Yes;No;N/AM Yes;No;N/AM Yes;No;N/AM Yes;No;N/AM Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No % A T
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1 Eco-sustainable activities (taxonomy aligned)
Turnover from eco-sustainable
activities (taxonomy aligned) (A.1)
- 0% 0% 0% 0% 0% 0% 0% No No No No No No No 0,00%
of which enabling 0% 0% 0% 0% 0% 0% 0% No No No No No No No 0% A
of which transitional 0% 0% No No No No No No No 0% T
A.2 Eligible taxonomy activities but not eco-sustainable (not taxonomy aligned)
Manufacture of electrical and
electronic equipment
CE 1.2 2,957,175.00 97.18% N/AM N/AM N/AM AM N/AM N/AM 0,00%
Manufacture of devices for
energy efficient buildings
CCM 3.5 - 0.00% N/AM N/AM N/AM N/AM N/AM N/AM 4.06%
Turnover from taxonomy eligible
activities but not eco-sustainable
(activities not aligned with the
taxonomy) (A.2)
2,957,175.00 97.18% 0% 0% 0% 97.18% 0% 0% 4.06%
Total (A.1 + A.2) 2,957,175.00 97.18% 0% 0% 0% 97.18% 0% 0% 4.06%
B. INELIGIBLE TAXONOMY ACTIVITIES
Turnover from ineligible taxonomy
activities (B)
85,911.00 2.82%
Total (A + B) 3,043,086.00 100.00%
Portion of turnover/Total turnover
Taxonomy alignment by objective Taxonomy eligibility by objective
CCM 0.00% 0.00%
CCA 0.00% 0.00%
WTR 0.00% 0.00%
CE 0.00% 97.18%
PPC 0.00% 0.00%
BIO 0.00% 0.00%
De’Longhi Group
|
02 Report on operations 50
Criteria for the sustainable contribution Criteria for “does no significant harm“
Economic activity (1)
Code/s (2)
Turnover (3)
Portion of expenses invoiced
2023 (4)
Climate change mitigation
of (5)
Climate change
adaptation (6)
Water and marine
resources (7)
Circular economy (8)
Pollution (9)
Biodiversity and
ecosystems (10)
Climate change
mitigation (11)
Climate change adaptation
(12)
Water and marine resources
(13)
Circular economy (14)
Pollution (15)
Biodiversity and ecosystems
(16)
Guarantees minimum
safeguards (17)
Aligned portion of capital
expenditure (A.1.) or
taxonomy eligible (A.2.)
2022 (18)
Category (enabling) (19)
Category (transitional) (20)
k € % Yes;No;N/AM Yes;No;N/AM Yes;No;N/AM Yes;No;N/AM Yes;No;N/AM Yes;No;N/AM Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No % A T
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1 Eco-sustainable activities (taxonomy aligned)
Capital expenditure for eco-sustainable
activities (taxonomy aligned) (A.1)
- 0% 0% 0% 0% 0% 0% 0% No No No No No No No 0%
of which enabling 0% 0% 0% 0% 0% 0% 0% No No No No No No No 0% A
of which transitional 0% 0% No No No No No No No 0% T
A.2 Eligible taxonomy activities but not eco-sustainable (not taxonomy aligned)
Manufacture of electrical and
electronic equipment
CE 1.2 85,626.39 62.80% N/AM N/AM N/AM AM N/AM N/AM 0.00%
Manufacture of devices for
energy efficient buildings
CCM 3.5 - 0.00% N/AM N/AM N/AM N/AM N/AM N/AM 0.12%
Transport by motorbikes,
passenger cars and light
commercial vehicles
CCM 6.5 658.61 0.48% AM N/AM N/AM N/AM N/AM N/AM 0.31%
Installation, maintenance and
repair of energy efficiency
devices
7.3 CCM
/ 3.3 CE
- 0.00% N/AM N/AM N/AM N/AM N/AM N/AM 0.08%
Installation, maintenance and
repair of EV charging stations
in buildings
CCM 7.4 - 0.00% N/AM N/AM N/AM N/AM N/AM N/AM 0.01%
Capital expenditure for taxonomy
eligible activities but not eco-
sustainable (activities not aligned with
the taxonomy) (A.2)
86,285.00 63.29% 0.48% 0% 0% 62.80% 0% 0% 0.52%
Total (A.1 + A.2) 86,285.00 63.29% 0.48% 0% 0% 62.80% 0% 0% 0.52%
B. INELIGIBLE TAXONOMY ACTIVITIES
Capital expenditure for ineligible
taxonomy activities (B)
50,053.00 36.71%
Total (A + B) 136,338.00 100.00%
De’Longhi Group
|
02 Report on operations 51
Portion of CapEx/Total CapEx
Taxonomy alignment by objective Taxonomy alignment by objective
CCM 0.00% 0.48%
CCA 0.00% 0.00%
WTR 0.00% 0.00%
CE 0.00% 62.80%
PPC 0.00% 0.00%
BIO 0.00% 0.00%
De’Longhi Group
|
02 Report on operations 52
Criteria for the sustainable contribution Criteria for “does no significant harm“
Economic activity (1)
Code/s (2)
Turnover (3)
Portion of expenses
invoiced 2023 (4)
Climate change mitigation
of (5)
Climate change
adaptation (6)
Water and marine
resources (7)
Circular economy (8)
Pollution (9)
Biodiversity and
ecosystems (10)
Climate change
mitigation (11)
Climate change adaptation
(12)
Water and marine
resources (13)
Circular economy (14)
Pollution (15)
Biodiversity and
ecosystems (16)
Guarantees minimum
safeguards (17)
Aligned portion of capital
expenditure (A.1.) or
taxonomy eligible (A.2.)
2022 (18)
Category (enabling) (19)
Category (transitional) (20)
k € % Yes;No;N/AM Yes;No;N/AM Yes;No;N/AM Yes;No;N/AM Yes;No;N/AM Yes;No;N/AM Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No % A T
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1 Eco-sustainable activities (taxonomy aligned)
Operating expenses for eco-
sustainable activities (taxonomy
aligned) (A.1)
- 0% 0% 0% 0% 0% 0% 0% Sì Sì Sì Sì Sì Sì Sì 0%
of which enabling 0% 0% 0% 0% 0% 0% 0% Sì Sì Sì Sì Sì Sì Sì 0% A
of which transitional 0% 0% Sì Sì Sì Sì Sì Sì Sì 0% T
A.2 Eligible taxonomy activities but not eco-sustainable (not taxonomy aligned)
Manufacture of electrical and
electronic equipment
CE 1.2 85,418.00 94.32% N/AM N/AM N/AM AM N/AM N/AM 0.00%
Manufacture of devices for
energy efficient buildings
CCM 3.5 - 0.00% N/AM N/AM N/AM N/AM N/AM N/AM 0.81%
Installation, maintenance and
repair of energy efficiency
devices
7.3 CCM
/ 3.3 CE
- 0.00% N/AM N/AM N/AM N/AM N/AM N/AM 0.03%
Operating expenses for taxonomy
eligible activities but not eco-
sustainable (activities not aligned with
the taxonomy) (A.2)
85,418.00 94.32% 0% 0% 0% 94.32% 0% 0% 0.84%
TOTAL (A1+A2) 85,418.00 94.32% 0% 0% 0% 94.32% 0% 0% 0.84%
B. INELIGIBLE TAXONOMY ACTIVITIES
Operating expenses for ineligible
taxonomy activities (B)
5,146.00 5.68%
Total (A+B) 90,564.00 100%
Portion of OpEx/Total OpEx
Taxonomy alignment by objective Taxonomy alignment by objective
CCM 0.00% 0.00%
CCA 0.00% 0.00%
WTR 0.00% 0.00%
CE 0.00% 94.32%
PPC 0.00% 0.00%
BIO 0.00% 0.00%
De’Longhi Group
|
02 Report on operations 53
Ethics and compliance
Risk scenario
For information on the ethics and compliance risks,
as well as the relative risk management, please
refer to the section “Risk management and Internal
Control System relating to the financial reporting
process” found in the Report on Operations.
For information on the management of the risks
connected to ethics and compliance, please also
refer to the table “The main risks associated with
non-financial issues and management methods” in
the Note on Methodology.
Business and organizational model
Based on the Group’s management and organiza-
tional model, the Legal and Internal Audit divisions
work with the Financial Reporting Officer, to guar-
antee compliance with the law and regulations.
Both divisions also work with the Quality Division in
order to ensure adequate control of the products
and the qualification, as well as the assessment, of
suppliers (refer to the chapter “Product quality and
innovation”).
Internal Audit, together with the Financial Reporting
Officer, also check and assess the control system
in all the Group’s branches and audit the account-
ing processes and procedures, as well as
compliance with Law 262 relating to financial re-
porting processes. The purpose of these periodic
audits is to ensure that the company documents
are reliable, complete, accurate and timely, as well
as compliant with the Group’s operating, adminis-
trative and accounting policies. The audits are car-
ried out with a view to gradually covering all the
companies, paying particular attention to the most
relevant ones based on the audit plan coordinated
with the Director in charge and the Control, Risk,
Corporate Governance and Sustainability
Committee.
Internal Audit, together with the Financial Reporting
Officer also supervise the Enterprise Risk Manage-
ment (ERM) model, a management system devel-
oped and perfected by the Group over the years,
which focuses on the assessment and monitoring
of company risks. As part of this project, a number
of activities were carried out over the last few years
in order to integrate the ERM matrix with the risks
identified in each area by the Group’s management.
These include the implementation of a dynamic
risk management platform, which was rolled out
over the first few months of 2021 at the Group’s
most relevant companies. Consistent with the plan
forecasts, the rollout of the platform continued in
2022 and involved a growing number of compa-
nies; in 2023 Capital Brands and Eversys were in-
cluded, as planned.
In 2022 the risks linked to sustainability included on
the platform were updated in order to include the
risks linked to climate change identified in 2021.
More specifically these include: circularity, product
sustainability, compliance with health and safety
measures, environmental damage caused by oper-
ations, human rights, energy management, impact
on the stakeholders’ sustainability interests, local
communities, involvement of the communities in
sustainability initiatives and fair trade practices. In
2023, this mapping was confirmed and no further
additions were needed. At the same time work on
the risks identified continued in collaboration with
the heads of the divisions involved.
This platform is dynamic and allows selected users
to update the selection of risks in a timely and inde-
pendent manner, under the strict supervision of In-
ternal Audit and the Financial Reporting Officer, as
well as make changes to the risk map based on the
user profile in order to guarantee the utmost con-
trol and separation of roles. In 2022 the ERM plat-
form was also integrated directly with the SAP Suc-
cess Factor system which made it possible for all
personnel involved in assessments to access ade-
quate training in accordance with the law, which
was facilitated by a specific e-learning module.
In order to guarantee compliance with internal reg-
ulations and the current law in the various coun-
tries where the Group is active, as of 2015
additional control measures have been adopted in
order to identify potential episodes of abuse of
office and corruption. These initiatives are solely
preventive as Company does not maintain any
commercial relationships with the public
administration.
The Group also ensures that, in addition to trans-
parency and compliance, models of conduct have
been defined and implemented with a view to mini-
mizing the risk associated with illicit behavior, sub-
ject to sanctions under the law and regulations.
Toward this end as of 2018, the “Corporate Gov-
ernance Guidelines” were implemented at all the
Group companies. The administrative directors of
the different branches were responsible for the ap-
plication of these guidelines, which call for not only
the adhesion to the Group’s Code of Ethics, but also
define a system for the delegation of spending au-
thority. Lastly, the De’ Longhi Group’s Italian compa-
nies also adopted an “Organizational, Manage-
ment and Control Model” pursuant to and in
accordance with Legislative Decree 231/2001
which calls for the appointment of a Supervisory
Board charged with ensuring, independently, that
the directives and procedures of the Model are ap-
plied correctly. In 2019 the Group had already
adopted an internal control system which automat-
ically monitors the flow of information and the pro-
cesses controlled by the system used to prevent
De’Longhi Group
|
02 Report on operations 54
send an anonymous report. In order to do this, a
dominion outside the company systems was creat-
ed which sends the information directly to the
Whistleblowing Committee, a body comprising
three Company members charged with analyzing
the reports and carrying out further investigations,
if necessary, of the reports received. No significant
reports have ever been received since the imple-
mentation of the system.
With regard to cyber security, the Group developed
a master data protection policy in 2020. During the
prior reporting year new security systems were in-
troduced to strengthen security and an automated
alert system was implemented which helps to
monitor, identify, analyze and prioritize any notices
received. The system also makes it possible to
send personalized messages to recipients.
The work group charged with the management of
this system comprises IT personnel, as well as
members of the legal team. With a view to further
increasing cyber security, the Company carried out
a campaign focused on increasing awareness in
this regard and training in the prevention and man-
agement of phishing was included in the training
plan. These activities continued in 2023, confirming
the Group’s commitment to preventing potential
problems relating to cyber security issues.
Key figures
No violations of the anti-corruption laws were re-
corded in the three-year reporting period (2021-23)
Information relating to persons apprised of the
company policies and procedures, as well as the
employees who received anti-corruption training is
shown below. There was a noticeable increase in
the figures thanks to the results achieved in 2023
by the Group. There was, in fact, an increase in the
number of employees and their training hours.
In 2023 the Board of Directors did not receive any
anti-corruption training or information about poli-
cies and procedures in this regard.
No legal complaints relating to anti-competitive,
anti-trust and monopolistic practices were filed in
the three-year period 2021-23. On 23 February
2023, however, the French competition authority
(the “FCA”) notified a few Group companies of a
complaint filed to the French company (and other
French sector companies, mentioned in the com-
plaint) which refers to certain acts that occurred
between 2009 and 2014 which were allegedly in vi-
olation of rules governing anti-competitive
conduct.
More specifically, the complaint alleges that the
Group entered into horizontal agreements which
consisted in the exchange between competitors of
privileged information relating to small appliances
in France in the period referred to above.
the crimes indicated in Legislative Decree 231.
In order to monitor transactions with related par-
ties and the relative risk, the Parent Company also
adopted a specific procedure which makes it possi-
ble to identity the transactions subject to specific
rules and approval, in accordance with the princi-
ples established by the Supervisory Authorities in
CONSOB Regulation n. 17221 of 12 March 2010.
Policies and objectives
The De’ Longhi Group’s Code of Ethics defines the
ethical standards that must be adhered to by em-
ployees and in the course of all the relationships
between the company and third parties, which
aspire to legality, transparency, fairness, integrity
and professionalism, as well as protection of priva-
cy. In order to allow new hires to familiarize them-
selves with these standards, as of 2020 short in-
duction sessions are held during which the
highlights of the Code of Ethics and the 231 Model
are illustrated. All new employees in Italy must pro-
vide signed confirmation of having received and
read the Code of Ethics.
As part of the Anti-Fraud Program defined based
on the guidelines of the Association of Certified
Fraud Examiners (ACFE), in 2023 the Group moved
forward with the improvements called for in prior
years.
With regard to the whistleblowing platform, in 2023
the platform was again fully operative, and may be
used by employees, suppliers and customers to
De’Longhi Group
|
02 Report on operations 55
Category
Europe* America & Asia-Pacific** MEIA
12
De’ Longhi Group
2021 2022 2023 2021 2022 2023 2021 2022 2023 2021 2022 2023
Number of people with whom the company’s anti-corruption procedure and policies were shared
Managers 177 162 214 67 82 78 4 4 4 248 248 296
White collars 1,745 1,829 2,014 511 598 531 25 25 23 2,281 2,452 2,568
Blue collars 4,481 918 4,170 3,820 1,771 3,746 - - - 8,301 2,689 7,916
Total employees 6,646 2,909 6,398 4,398 2,451 4,355 29 29 27 11,073 5,389 10,780
Commercial partners - - 285 - - - - - - - - 285
Employees who received anti-corruption training
Managers 22 44 22 9 7 10 - - - 31 51 32
White collars 326 340 121 114 108 135 - - - 440 448 256
Blue collars - 2 - 9,355 2,090 5,837 - - - 9,355 2,092 5,837
Total employees 348 386 143 9,478 2,205 5,982 - - - 9,826 2,591 6,125
12
MEIA refers to the countries located in the Middle East, India and Africa.
* The figures for Italy are included in Europe.
** The hours of training for new hires, which addresses business ethics and anti-corruption, are taken into consideration for America & Asia-Pacific.
The French Competition Authority concluded that
the practice of exchanging information, to the
extent that it restricted market competition, consti-
tutes an anticompetitive agreement prohibited by
the Art. 420-1 of the French Commercial Code and
Art. 101, paragraph 1, TFUE.
The complaint is currently being analyzed carefully
by the Group which is preparing its defense with
the support of premiere legal counsel and sector
consultants. It is not yet possible to assess the
possibility or the size of any sanctions. The Group
believes that there are sound arguments to be
made in its defense.
Similarly, no economic or in-kind contributions
were made to political parties, elected
representatives or people looking to hold political
office in the three-year period subject to
examination.
As for the number of complaints relating to dis-
crimination, two incidents of sexual harassment
were reported at De’Longhi Australia PTY LTD. The
Group does not tolerate any behavior that could
compromise the respect, diversity, rights and
safety of its employees at the workplace. For this
reason, after quick and in-depth internal investiga-
tions, the Company decided to terminate the em-
ployment of the individuals involved.
Furthermore, in 2023 a case of possible discrimina-
tion was reported at De’Longhi Kenwood A.P.A. LTD;
subsequently, upon further investigation the
discriminatory nature of the episode was not
confirmed.
Lastly, consistent with full disclosure in tax matters,
the Group operates in complete transparency and
in accordance with local and international tax laws.
De’Longhi Group
|
02 Report on operations 56
Human resources
management
Risk scenario
People are one of the elements that lie at the foun-
dation of the De’ Longhi Group’s identity and suc-
cess. Aware of their key role and the multicultural
environment that it operates in, the Group is com-
mitted to guaranteeing a dynamic and engaging
workplace, which respects the highest health and
safety standards and, at the same time, takes the
personal and professional needs of all its people
into account. In order to achieve this objective,
each individual of the Group needs to own the com-
pany values, contributing directly to the construc-
tion of a positive environment which implicates
that each resource acts with ambition, courage,
passion, expertise and teamwork, guaranteeing
mutual respect both inside the company and in the
interactions with customers, suppliers and other
stakeholders.
For more detailed information on the risks connect-
ed to human resources management and risk man-
agement, please refer to the paragraph 9 of the
section “Risk factors for the De’Longhi Group” (ref-
erence should be made to the chapter “Risks relat-
ing to the organization and management of human
resources”).
With regard to the measures used to mitigate and
manage human resource risks please also refer to
the table “The main risks associated with non-fi-
nancial issues and management methods” in the
Note on Methodology.
De’Longhi Group
|
02 Report on operations 57
Business and organizational model
The Chief People Officer coordinates the Human
Resources Division which is responsible for the
management and development of human resourc-
es for the entire Group. On a local level, this respon-
sibility is entrusted to specific structures, which are
found in the main geographical areas and the
Group’s more structured branches. These struc-
tures have many duties which include, mainly, all
administrative aspects of employee relationships,
the management and development of internal re-
sources, talent acquisition, training and retention,
as well as internal communications, labor union re-
lations, development of important initiatives tied to
both employee engagement and the organization
of workplace safety.
The corporate HR structure was defined based on
the organizational changes made by the Group
over the years and is broken down based on four
main macro-clusters, dedicated to four specific
areas:
• Brand Headquarters and commercial organiza-
tion Europe
• Corporate Staff, Services and Organization, Op-
erations Europe
• Commercial organization Asia Pacific and Oper-
ations China
• Commercial organization Americas and MEIA
The Chief People Officer is responsible for the su-
pervision of the remaining commercial units.
The employee journey begins with the attraction
phase which is managed globally by Talent Acquisi-
tion and Employer branding. The latter is crucial to
the Group’s activities and allows for a structured
and integrated approach to the recruiting of new
resources. A number of initiatives were developed
in association with the employer branding strategy
focused on increasing the recognition of the Group
globally. These include updating the People section
of the corporate website and the introduction of a
new global Linkedin page, which substituted the
previous pages dedicated to single countries which
resulted in a significant increase in the number of
followers and visits in 2023, also. The number of
page followers, in fact, rose from 58.3 thousand at
year-end 2022 to 66 thousand at year-end 2023
(+14%). The most successful social strategies re-
sulted in the publication of 107 posts, 2 each week,
relating to 5 topics: Sustainability, Training, Career,
Business and Innovation, consistent with what hap-
pened in 2022. More in detail, new multimedia for-
mats were created, focused primarily on video con-
tent. This approach made it possible to reach a
total of 752,882 impressions (+10% compared to
the prior year). The most successful posts include
the one of the Smart Design project, completed in
partnership with Milan’s Politecnico and the one of
a few students from Oradea University visiting the
Salonta plant. Even though the Group’s main audi-
ence is still Italian, in 2023 there was a significant
increase in the European (+83%) and North Ameri-
can (+127%) audience, a sign of the Group’s grow-
ing international presence.
With respect again to talent attraction, for years De’
Longhi has cultivated strategic relationships with
Italy’s best universities, like Milano’s Politecnico
and Bocconi University: in order to strengthen the
tie with the academic world structured partner-
ships were established with a view not only to at-
tract the best talents, but also to increase research
and training in collaboration with the two schools.
The partnership with Politecnico, for example, calls
for the Group’s participation in events and training
courses tied to innovation, research and develop-
ment. During these courses, Group management
dedicate time and expertise in order to interact di-
rectly with youth, involving them in training projects
and activities related to De’ Longhi’s business. A
relevant event in this regard was the participation
of the Company’s General Manager in Transforma-
tive Sustainability master’s program at Bocconi Uni-
versity where the sustainability path undertaken by
the Group was presented and the commitment that
companies must have to become key players in the
creation of a sustainable future was discussed.
Similar to prior years, in 2023 one of the strategic
choices made by the De’ Longhi Group was to en-
hance and increase the knowhow of its company
resources, investing in the improvement of soft
skills and technical expertise, including as a result
of the noticeable increase in employees. Conse-
quently, there was an increase in both the number
of training hours (+20%) and the number of
participants.
This result was achieved also and above all thanks
to the projects and training tools developed over the
last few years including, specifically, with regard to
e-learning. More in detail, the PULSE platform, which
has already been used by Human Resources for sev-
eral years, also allows Group employees to create
personalized learning plans based on specific needs,
as well as access an on-line catalogue and e-learn-
ing courses. As in 2022, the Group continued to use
the Speex and Of Course Me platforms in 2023: the
first provides language courses and the second pro-
vides information and useful materials on a vast
range of topics in a single digital platform. This
allows employees to get to know more about topics
they are interested in and are relevant to their profes-
sional development by creating a personalized train-
ing course. In 2023, the Global Catalogue proposed
23 courses focused on managerial, communication
and digital skills, as well as relating to digital think-
ing. This initiative had wide participation, as well as
an enthusiastic reception: the average satisfaction
rating was 4.3 out of 5.
In 2023 the Digital Lab continued. Digital Lab is an
ad hoc training initiative conceived to improve the
digital expertise of employees working in the Mar-
keting and Commercial divisions and sustain the
growth of the Group’s e-commerce channel.
Looking again at digital expertise, in April 2023, 117
employees working in the IT division from Italy,
Germany, the United Kingdom and Romania partic-
ipated in an assessment organized by the Human
Resources division. The main objective was to
assess the digital skills of IT department employ-
ees, focusing mainly on hard skills, soft skills and
understanding of the main innovation topics. The
results obtained by the assessment allowed the
team responsible for the project to build a training
path called “Innovation Breakfast”, series of morn-
ing webinars focused on exploring emerging
trends in innovation. These meetings, comprised of
4 sessions of around 1 hour each, were launched in
November 2023 and ended in January 2024.
In 2023 the Group also launched the Sustainability
Learning Journey, which is part of a broader sus-
tainability strategy and provides training on topics
related to this topic: De’ Longhi’s goal is to render its
employees more knowledgeable as to the impact
that their positive actions could have on promoting
a better future. The Group, therefore, structured a
training course focused on this topic: the first event
involved an exceptional guest, renowned
De’Longhi Group
|
02 Report on operations 58
economist and Nobel Prize Winner Prof. Joseph
Stiglitz who focused his speech on sustainable de-
velopment of businesses. The presentation was
held at the Treviso headquarters and colleagues
from the international branches could connect via
streaming.
Subsequently, courses and content were published
on the Pulse platform which made it possible for
employees to learn more about the topics dis-
cussed. In 2024, the path just described will move
toward a call to action phase during which employ-
ees will be invited to share the best sustainability
practices.
Over the last few years, the Group has also actively
promoted the Diversity Equity and Inclusion
(DE&I) project, which aims to guarantee equal op-
portunity and the lack of discrimination. The pro-
ject can be broken down into four phases:
1. Diagnosis: the objective of this phase is to let
the DE&I decisions be shaped by the analysis
made of the data gathered by the Group. More
specifically, the internal population was mapped
and information was gathered through inter-
views and surveys;
2. Commitment and involvement: Human Re-
sources involved top management through ded-
icated interviews and, subsequently, organized
a workshop during which the results obtained
were shared and the Group’s priorities were de-
fined together with the company’s leadership
team;
3. Action: in this phase, the De’ Longhi Group de-
velops a roadmap of the long-term goals and
the actions that need to be taken to achieve
them, through DE&I projects, policies and
practices. While the drafting of the roadmap
was completed in 2023, beginning in 2024 the
Company will begin to share the strategies and
guidelines adopted with all the Group’s person-
nel; and lastly will proceed to define local plans
of action.
4. Monitoring and accountability: the actions un-
dertaken and the goals defined in the roadmap
will be monitored over time by Human Resourc-
es, in order to assess the project’s performance,
the results achieved and define any needed cor-
rective strategies.
Human Resources guides the global performance
appraisal process conceived to promote growth
and the development of employees. This program
is based on a dedicated system which fosters an
open and constructive dialogue between managers
and employees. The path, called FORWARD, was
tested for the first time in 2021 and used Group-
wide in 2022. In 2023 employees and managers
were more familiar with the process than in the
prior year and the completion rate, in fact, rose to
up to 85% of the total (+5%) and there was an in-
crease in the feedback shared which went from
2,500 to almost 5,000.
The performance appraisal cycle can be broken
down into three main phases:
1. Set Up: individual targets are defined and
growth strategy consistent with the company
strategy and the team goals is defined;
2. Sync: regularly scheduled checkpoints for feed-
back and self-reflection are organized in order
to render the employee’s growth part of an on-
going and interactive process.
3. Wrap Up: the comments made by employees
are gathered so the manager can provide a
complete, objective and constructive assess-
ment of target achievement. These targets typi-
cally focus on employee enhancement, under-
standing of what can be improved and
recognition of the talents that emerged.
The actions taken to protect the
Group’s personnel
For the De’ Longhi Group, the sustainability of a suc-
cessful manufacturing project is based largely on
the ability to address and protect the health and
safety of its employees: in order to achieve this ob-
jective, Human Resources leverages on the support
of people charged with promoting worker health and
safety like the Head of the Prevention, Protection
and Environment Department in Italy, Switzerland,
China and Romania where the Group’s production
plants are located. Their responsibilities include as-
sessing the risks inherent in the activities carried out
by the Group employees and defining plans for im-
provement. Particular attention is paid to ergonomic
work stations, both in the plants and the offices, in
order to guarantee a safe and comfortable work
environment.
In 2022 the Group had already begun work on a plan
for risk mitigation and further improvement in work-
place safety. The initiative, carried out by a
cross-functional HR/Operations team which fo-
cused on the analysis of risks relating to production
organization and the supply chain. The goal is to
define a multi-year, step-by-step path which reinforc-
es a “Zero accident mindset”. The team developed a
monitoring system which assesses the progress
made toward achieving the “zero accident” goal. In
2023 the global “I am Safety” campaign was also
launched: the initiative, part of the sustainability
strategy, has three main objectives: strengthen and
spread a safety culture throughout the Group, in-
volve and make employees responsible for issues
linked to safety and, at the same time, improve effi-
cacy and productivity through initiative focused on
“new ways of working”, with a particular focus on
smart working.
In the production plants the initiative was realized
through the “Safety Ambassadors” campaign, based
on which a few employees were appointed safety
ambassadors. The project, which for now has been
implemented in the Company’s production facilities,
was structured based on three phases:
1. Appointment of the ambassadors: the ambas-
sadors are employees who are chosen to safe-
guard aspects of Health, Safety and the Environ-
ment (HSE) in each production facility. In order
to identify the best people for the assignment,
the work team developed an identikit of the
characteristics needed to cover this role;
2. Training of the ambassadors: the ambassa-
dors selected completed a dedicated training
course in order to understand the role and re-
sponsibilities involved;
3. Identification of any equipment needed: in this
phase any investments needed to improve the
health and safety inside the plants are quanti-
fied, along with the anticipated benefits.
In light of the success of this first test of the Am-
bassador campaign inside the plants, the Group
plans on expanding this initiative in the branches,
as well.
De’Longhi Group
|
02 Report on operations 59
In the branches and at headquarters the focus of
the campaign will be on the white collar workers
and the “new ways of working”, as well as wellbe-
ing in the workplace in order to support a positive
work experience.
Policies and objectives
The Group’s focus on its people is fully expressed in
its Code of Ethics which dedicates an entire section
to this topic. The Code of Ethics condemns undoc-
umented working relationships, any form of ex-
ploitation (including child labor) and any undue ad-
vantage over workers. Equal opportunities are
promoted throughout the professional cycle, from
selection through career advancement, avoiding
any and all forms of discrimination.
With regard specifically to the workplace health
and safety, the Code of Ethics also requires that
each employee pay the utmost attention to adher-
ing to all of the safety and preventive measures,
while also complying with all the instructions and
directives in effect. In particular, health and safety
aspects are particularly relevant at production
plants where workers are exposed to greater risks
and, therefore, accident prevention and mitigation
procedures have been adopted. Toward this end,
the Mignagola plant in Treviso, Italy and the facili-
ties in Cluj and Salonta, Romania developed operat-
ing system in preparation for adoption of ISO
450001:2018, the most widely known international
standard for work and safety. This certification was
obtained at the plants in Sierre (Switzerland) and
Dongguan (China); as of February 2024 this certifi-
cation is also in place in OnShiu (China).
Lastly, the Company formalized a policy dedicated
to the integrated management of HR topics which
also includes the compensation of the Board of Di-
rectors and the executives. In 2019 a Group MBO
policy was introduced which aims to create a link
between compensation and results and strengthen
the sense of belonging and De’ Longhi’s identity.
Key figures
The Group had 9,837 employees at 31 December
2023, an increase of 15% compared to the prior
year. The reporting year was characterized by a re-
covery in production which resulted in an increase
in the number of Group employees.
Women represent 50% of the De’Longhi Group’s
workforce, in line with the prior year. This reflects
De’ Longhi’s commitment to strategies to promote
equal opportunities. 90% of the employees have
permanent contracts, in line with the prior reporting
year (93% in 2022).
De’Longhi Group
|
02 Report on operations 60
Employees by contract type
Italy Europe America & Asia-Pacific MEIA De’ Longhi Group
2021 2022 2023 2021 2022 2023 2021 2022 2023 2021 2022 2023 2021 2022 2023
Number of employees by contract type
Permanent positions 1,708 1,710 1,658 4,624 3,837 4,477 2,710 2,387 2,637 58 52 54 9,100 7,987 8,826
women 676 684 676 2,776 2,271 2,573 1,273 1,110 1,201 23 21 22 4,748 4,086 4,472
men 1,032 1,026 982 1,848 1,566 1,904 1,437 1,277 1,436 35 31 32 4,352 3,901 4,354
Temporary positions 31 22 15 417 171 567 803 374 429 1 1 - 1,252 568 1,011
women 17 15 8 211 61 253 358 200 210 - 1 - 586 277 471
men 14 7 7 206 110 314 445 174 219 1 - - 666 291 540
Total 1,739 1,732 1,673 5,041 4,008 5,044 3,513 2,761 3,066 59 53 54 10,352 8,555 9,837
Number of employees by contract type
Full-time 1,637 1,635 1,581 4,784 3,778 4,738 3,484 2,751 3,062 58 52 53 9,963 8,217 9,434
women 594 604 595 2,789 2,155 2,602 1,613 1,301 1,407 23 21 21 5,019 4,081 4,625
men 1,043 1,031 986 1,995 1,623 2,136 1,871 1,450 1,655 35 31 32 4,944 4,136 4,809
Part-time 102 97 92 257 230 306 29 10 4 1 1 1 389 338 403
women 99 95 89 197 180 224 18 9 4 - 1 1 314 285 318
men 3 2 3 60 50 82 11 1 - 1 - - 75 53 85
Total 1,739 1,732 1,673 5,041 4,008 5,044 3,513 2,761 3,066 59 53 54 10,352 8,555 9,837
Number of employees by gender
Total women 693 699 684 2,987 2,332 2,826 1,631 1,310 1,411 23 22 22 5,334 4,363 4,943
Total men 1,046 1,033 989 2,054 1,676 2,218 1,882 1,451 1,655 36 31 32 5,018 4,192 4,894
During the year the Group hired approximately 1,050 contract workers at the production plants.
De’Longhi Group
|
02 Report on operations 61
Breakdown of the workforce
Unit of
measure
De’ Longhi
Group
2021
De’ Longhi
Group
2022
De’ Longhi
Group
2023
Manager
Men
< 30 years % - -
-
>30 < 50 years % 2% 1.9%
1.5%
> 50 years % 1.2% 1.4%
1.2%
Total men % 3.2% 3.3%
2.7%
Women
< 30 years % - -
-
>30 < 50 years % 0.7% 0.7%
0.6%
> 50 years % 0.1% 0.2%
0.2%
Total women % 0.9% 0.9%
0.8%
Total % 4.1% 4.2%
3.5%
White collars
Men
< 30 years % 2.3% 2.8%
2.4%
>30 < 50 years % 10.2% 13.3%
11.6%
> 50 years % 3.4% 4.2%
3.9%
Total men % 15.9% 20.3%
17.9%
Women
< 30 years % 2.4% 3.0%
2.3%
>30 < 50 years % 9.1% 11.2%
9.8%
> 50 years % 2.1% 2.5%
2.5%
Total women % 13.5% 16.8%
14.6%
Total % 29.4% 37%
32.4%
Blue collars
Men
< 30 years % 7.7% 4.5%
6.9%
>30 < 50 years % 15.5% 14.6%
15.6%
> 50 years % 6.2% 6.4%
6.7%
Total men % 29.4% 25.5%
29.2%
Women
< 30 years % 6.7% 4.6%
5.7%
>30 < 50 years % 22.5% 20.8%
20.6%
> 50 years % 7.9% 7.8%
8.6%
Total women % 37.1% 33.2%
34.9%
Total % 66.5% 58.7%
64.1%
In 2023, the De’Longhi Group’s BoD comprised 6 men and 5 women, of which around 90% over the age of 50.
Composition of the Parent
Company’s BoD
U.M. 2021 2022 2023
Men
< 30 years n - - -
>30 < 50 years n - - -
> 50 years n 8 6 6
Total men n 8 6 6
Women
< 30 years n - - -
>30 < 50 years n 1 1 1
> 50 years n 3 4 4
Total women n 4 5 5
Total n 12 11 11
In order to foster the knowledge and expertise of its people, as well as ensure adequate training in terms of
health and safety, in 2023 the De’Longhi Group provided an average of 24 hours of training to each employee
(+ 6% compared to 2022).
Training U.M.
De’ Longhi Group
2021 2022 2023
Average hours per employee Average hours 21.7 23.0 24.3
Training U.M.
De’ Longhi Group
2021 2022 2023
Training by job level
Average hours for managers Average hours 14.3 15.5 21.7
Average hours for white collars Average hours 17.6 19.9 22.9
Average hours for blue collars Average hours 23.9 25.5 25.1
Training by gender
Average hours for women Average hours 20.3 21.8 22.1
Average hours for men Average hours 23.1 24.3 26.4
De’Longhi Group
|
02 Report on operations 62
With regard to workplace health and safety, the
Group recorded a total of 56 accidents over a total
of more than 20 million hours worked in 2023. This
figure, lower with respect to the trend seen in the
last two years, attests to the efficacy of the
Injuries and rate of injury by geographic area
Italy Europe America & Asia-Pacific MEIA
2021 2022 2023 2021 2022 2023 2021 2022 2023 2021 2022 2023
Total hours worked h.000 2,887 2,799 2,820 8,285 7,356 8,073 9,935 8,595 9,410 119 121 117
Injuries n. 13 16 8 20 10 31 49 26 17 - 2 -
In transit using means organized by the Group n. - - - 4 - 4 - - - - - -
Serious injuries n. - - - - - - - - - - - -
Fatal injuries n. - - - - - - - - - - - -
Occupational disease n. 1 2 2 - - - 1 - - - - -
Frequency rate
13
- 4.5 5.7 2.8 2.4 1.3 3.8 4.9 3.0 1.8 - 16.4 -
Severity rate
14
- - - 0.7 - - - - - - - - -
Mortality rate
15
- - - - - - - - - - - - -
Rate of occupational disease
16
- 0.3 0.7 0.7 - - - 0.1 - - - - -
13 The frequency rate is the total number of injuries expressed as a percentage of the total number of labor hours worked in the
same period, multiplied by 1,000,000, excluding commuting accidents.
14 The severity rate is the total number of serious accidents expressed as a percentage of the total number of labor hours worked in
the same period, multiplied by 1,000,000.
15 The mortality rate is the total number of fatalities expressed as a percentage of the total number of labor hours worked in the
same period, multiplied by 1,000,000.
16 The rate of occupational disease is the total number of occupational disease expressed as a percentage of the total occupational
disease and the number of labor hours worked in the same period, multiplied by 1,000,000.
measures adopted by the company and is a clear
demonstration of how the level of attention paid to
these issues is producing positive, tangible results.
De’Longhi Group
|
02 Report on operations 63
Injuries and rate of injury
De’ Longhi Goup
2021 2022 2023
Total hours worked h.000 21,227 18,873 20,420
Injuries n. 82 54 56
In transit using means organized by the Group n. 4 - 4
Serious injuries n. - - -
Fatal injuries n. - - -
Occupational disease n. 2 2 2
Frequency rate - 3.9 2.9 2.7
Severity rate - - - -
Mortality rate - - - -
Rate of occupational disease - 0.1 0.1 0.1
Injuries and rate of injury for contract workers at the production
facilities
De’ Longhi Goup
2021 2022 2023
Total hours worked h.000 5,343 2,120 3,046
Injuries n. 12 14 18
In transit using means organized by the Group n. 7 5 7
Serious injuries n. - - -
Fatal injuries n. - - -
Frequency rate - 2.2 6.6 5.9
Severity rate - - - -
Mortality rate - - - -
De’Longhi Group
|
02 Report on operations 64
Quality
and product innovation
Risk scenario
The De’ Longhi Group applies a business model
which focuses high quality products, key to main-
taining consumer confidence and a solid market
reputation, as well as essential to long-term profita-
bility and business continuity. As it operates inter-
nationally, the Group must continuously address a
complex and ever-changing regulatory environ-
ment; therefore, it systematically allocates signifi-
cant resources to ensuring compliance with the
different requirements applied in the different juris-
dictions it interacts with. Toward this end, based
on the local for global approach adopted by the
Company, all the products distributed must comply
with the most stringent standards applicable in the
numerous countries where the Group is present.
Examples of the most well-known international reg-
ulations include EU Regulation n. 1907/2007 or
REACH (Registration, Evaluation, Authorization and
Restrictions of Chemicals) and the RoHS (Restric-
tions of Hazardous Substances) directive 2002/95/
EC, both of which the Group’s companies comply
with across all geographies even though the scope
of application is strictly European.
Furthermore, the law also requires that the Group
assumes the manufacturers’ responsibilities for
damages caused by defective products, which en-
tails certain obligations above all in jurisdictions
like the United States, the United Kingdom and
Australia.
The manufacturer is also responsible for providing
detailed product information which may vary based
on specific laws and local regulations. In the United
States, for example, the De’Longhi Group is subject
to “Proposition 65” based on which the presence of
any hazardous substances must be indicated
clearly on the labels.
The adequacy and effectiveness of the practices
mentioned above are guaranteed by the Group’s
Product Safety&Liability team. The latter collabo-
rates with both the technical departments and the
branches, working proactively to prevent product
risks, as well as manage any market complaints or
reports generated internally. In 2023 the Group
continued with its monitoring activities and man-
aged any reports received more effectively.
For more information about the risks connected to
quality and product innovation, as well as risk man-
agement, please refer to the section “Risk factors
for the De’Longhi Group”, specifically paragraphs 5
(“Risks relating to the De’Longhi Group’s ability to
achieve continuous product innovation”), 6 (“Risks
relating to patents and trademarks”) and 10 (“Risks
relating to product quality and product liability”).
For more information on the measures used to mit-
igate and manage risks relating to product quality
and innovation, please refer to the table “The main
risks associated with non-financial issues and
management methods” in the Note on
Methodology.
Business and organizational model
The De’ Longhi Group’s Quality Division, formed by
more than 500 specialized personnel, is dedicated
to the supervision of everything that concerns
compliance with current laws and regulations re-
lating to product and food safety. The different
teams include Regulatory Affairs which monitors
any changes in international regulations and laws
relating to products and contributes to develop-
ment also by working with the Group’s different
technical divisions. The Quality Division also de-
fines the guidelines for product control. The corpo-
rate provisions defined are adopted and applied lo-
cally by dedicated teams which operate on two
levels: on the one hand, they work to monitor the
quality of both the products which come from ex-
ternal suppliers and the ones made internally; on
the other they monitor the quality of product cate-
gories being developed and when market com-
plaints are received. The controls are carried out
already during the design phase in order to prevent
any anomalies or product malfunctions, as well as
ensure that the highest safety standards are
achieved.
With regard to the production plants, the organiza-
tional model adopted by the Group is ISO 9001 cer-
tified, which calls for a product quality manage-
ment system.
Looking at food safety, at the Mignagola and Cluj
plants an ISO 22000 certified management model,
De’Longhi Group
|
02 Report on operations 65
which relates specifically to hygiene and food
safety, was implemented. This standard, which is
based on the HACCP (Hazard Analysis and Critical
Control Points
17
) principles and the Codex Alimen-
tarius
18
makes it possible to identify and manage
possible risks, prevent accidents along the entire
production chain, as well as assess the compliance
of products with current regulations. In all the other
production facilities, the Group adopted an organi-
zational model which, in addition to the same
standard, is informed by the Good Hygienic Prac-
tices (GHP) and the ISO 1672-2
19
standard for
food safety which also takes into account the ISO
22005
20
product traceability standards and re-
quirements in order to provide, for each component
and market product, information relating to the
origin and recipient of the product.
During the pre-production phase, through a particu-
larly granular verification process, all the Group’s
products are certified by independent bodies in
order to further guarantee compliance with all ap-
plicable regulations and laws. Furthermore, the
Quality division also carries out specific audits (see
the “Supply chain management” section) in order to
control and monitor the suppliers’ compliance with
the production standards.
With regard to product information, the technical
departments work with the Marketing Division to
ensure that the labels and booklets created comply
with the regulations specific of all the countries
where the products are distributed. The Group pays
careful attention to the product booklets and labels
which, in order to meet the legal obligations must
comply with specific requirements, including, for
example, the need to include the product’s country
of origin and the presence of any refrigerants in the
household appliances. It is extremely important
that the instructions relating to how to safely use
and dispose of the product at the end of its life
cycle is also provided in the product manuals.
The Operations and Technology Division promotes
innovation and oversees design. Its main objective
is to develop well designed products that are easy
to use and versatile, characterized by a distinctive
design which is ergonomic, safe and easy to disas-
semble. The use of high quality materials and tech-
nologies which are energy efficient and promote
food safety is also essential.
Looking once again at design, the Group refers to
Specific NPD (New Project Development) proce-
dures, which provide transversal guidelines for the
development of new products. These procedures
are followed by the Marketing and Design divisions,
as well as the technicians, which comprise a team
of people spread out between the offices in Italy,
Germany, the United Kingdom and the Dongguan
plant in China. These offices, together with the
Quality Division’s Regulatory Team, are dedicated
to designing solutions which comply with applica-
ble laws. The Group’s local for global approach, re-
ferred to above, ensures that products are devel-
oped in compliance with the standards applicable
in the countries in which the Group operates.
The constant development of innovative products
is also the result of the effective partnerships be-
tween Operations and Technology, several prestig-
ious Italian and international universities, as well as
a few commercial partners for which the De’Longhi
Group designs and manufactures a collection of
coffee products. In 2022, as part of these partner-
ships with the academic world, “Eco-Design
Guidelines” were developed for a specific range of
De’ Longhi products in collaboration with Milan’s
Politecnico. More in detail, the goal of these strate-
gic guidelines is to develop the expertise, for the
entire product development community, needed to
reduce the environmental impact of products
across the entire life cycle in a regulatory environ-
ment that changes constantly. In 2023 the imple-
mentation of these practices was focused on ten
pilot products which will be analyzed as deemed
opportune to ensure a more organic and complete
integration of Eco-design standards in the develop-
ment process of all De’ Longhi products. Three
Life Cycle Assessments were also carried out in
order to measure and classify the most significant
sources of any environmental impacts.
Policies implemented and objectives
The Group’s commitment to making high quality
products is supported by ongoing research and de-
velopment, focused on safety and consumer wellbe-
ing – this commitment is formalized in the Compa-
ny’s Code of Ethics which emphasizes the goal of
maintaining high quality standards for consumers
and clients.
Lastly, some time ago the Company adopted a
group-wide Quality Policy.
Key figures
One of the key performance indicators that the
Group uses to monitor quality, the First Time Quali-
ty Indicator (FTQ) assesses the qualitative efficien-
cy of the production process. This indicator is used
to identify any functional or esthetic defects of the
products and expresses the number of perfect
products as a percentage of total production. In the
three-year period 2021–2023, the overall FTQ was
stable (98% in 2023) confirming the Group’s excel-
lent performance. The Service Call Rate (SCR),
rather, measures the percentage of machines re-
paired in the first year under warranty: in this in-
stance, also, the SCR was unchanged with respect
to the prior reporting year.
In 2023 there were no instances of non-compliance
related to product safety. With regard to product
information and labeling, in 2023 notice was
17 The hazard analysis and critical control points or HACCP, is
a systematic preventive approach relating to food safety
and protection from production related biological, chemi-
cal, and physical hazards.
18 The Codex Alimentarius is a collection of standards, codes
of practice, guidelines, and other recommendations adopt-
ed by the Food and Agriculture Organization of the United
Nations to protect the health of consumers and promote
equitable and practices in the food business.
19 This standard establishes the requirements for common
hygiene practices for machines used to prepare food for
human consumption in order to eliminate or reduce the risk
of contagion, infection, sickness or food induced
damages.
20 This standard incorporates regulations relative to traceabil-
ity systems for food products and applies them across the
agri-food sector. By adopting this standard, the company
guarantees the product history will be document and then
places it in the relative food chain.
De’Longhi Group
|
02 Report on operations 66
received of one instance of noncompliance. More
specifically, the CCIAA (Camera di Commercio, In-
dustria, Artigianato e Agricoltura) of Trento identi-
fied a non-compliance connected to the lack of a
safety warning in the instruction manual for an
Ariete tea kettle, Model 2877. The Group then up-
dated the labeling of the products still in stock.
Lastly, as in prior years, the Company continued
with its investments in research and development
aiming to enhance its capacity for innovation
(please refer to the section “Research and develop-
ment – quality control” for more information). A
few of the product designs which exemplify
De’Longhi Group’s characteristic innovation are de-
scribed below:
Durable and detachable products
In order to ensure durability, the Group carries out
numerous resistance tests during the development
process. For example, the tests involving coffee
machines are applied to both single components,
as well as the finished product, by making thou-
sands of drinks. Similar initiatives are underway for
the Kenwood kitchen machines.
De’ Longhi is committed to making products that
are easy to repair, thanks to the work done on im-
proving the ease of disassembly and the standardi-
zation of a few key mechanical parts that are
shared across product families. The continuous
dedication to creating products with these charac-
teristics has made it possible for different Braun
brand products, like the new TexStyle 7 Pro, the
PowerBlend 9 and the MultiQuick MQ 7, to receive
the prestigious Red Dot prize – clear recognition of
the high quality of these products.
Lastly, as already pointed out in prior years, the fully
automatic coffee machines are equipped with pat-
ented systems which facilitate washing with water,
without having to use detergents and lubricants.
The milk system is cleaned using steam and hot
water at the end of each use, and any remaining
milk can be stored in the refrigerator and used
again.
Energy efficient and low GHG emissions
products
The De’ Longhi Group is deeply committed to the
energy efficiency of its products.
This is demonstrated by the fact that the entire
range of fully automatic coffee machines, as well
as the Lattissima and electronically controlled
manual machines, are at least energy class A
21
.
The development of systems which reduce the
time needed for automatic shutdowns, the optimi-
zation of consumption during the stand-by phase
(reaching levels which are half the regulatory mini-
mum) and the development of an innovative heat-
ing system for the filter cup, are just a few exam-
ples of the work down in this regard.
Also, for many years all the fully automatic ma-
chines have been available in “Ecomode” which
makes it possible to save energy during the warm-
up phase.
With regard to comfort, the migration of the whole
range of European portable air conditioners to re-
frigerant propane gas was completed several years
ago. This refrigerant has significant environmental
advantages as it is a natural gas which has a lower
impact on global warming (Global Warming Poten-
tial – GWP). In the US market, where the use of this
gas is illegal, in 2021 the Group completed the mi-
gration of all the air conditioners to refrigerant
synthetic R32 gas, which has a lower GWP impact
compared to the gases used previously; while it is
not as efficient as propane, it represents the best
possible solution allowed under US law. Currently,
the laws in this regard are subject to continuous
change and the Group is already working on the de-
velopment of technologies which will make it pos-
sible to keep up with the relative legislative context.
Healthy lifestyle products
The De’ Longhi Group’s strategies for new product
development include promoting healthy lifestyles.
The Group aims to preserve the nutritional ele-
ments of foods through its products: toward this
end, Kenwood developed a line of Pure Juice ex-
tractors. Thanks to scrolling technology, the Pure
Juice line is able to reduce the overheating and oxi-
dation of ingredients making it possible to preserve
the nutritional properties of the fruits and vegeta-
bles. The Multifry fryers also cook with hot air
which reduces the use of vegetable oils.
All the De’Longhi brand coffee machines, fully auto-
matic and manual, are also equipped with electron-
ically controlled boiler temperatures which makes
it possible to maintain conditions that are ideal for
the ground coffee, safeguarding its organoleptic
properties and enhancing its aroma.
21 Beginning in 2009, the FEA (Swiss Association of the do-
mestic appliances industry) in agreement with the Swiss
authorities, introduced the energy label for espresso ma-
chines, which became mandatory in 2014 for all machines
sold in the Swiss market. In this context, the De’Longhi
Group has decided to extend the certification in accord-
ance with the standard EN 60661/2014 “Methods for
measuring the performance of domestic coffee machines”
to all coffee machines, regardless of the distribution
market. The energy label proposed in the Swiss agreement
classifies espresso machines on the basis of their energy
efficiency on a scale that goes from class D to A +++.
De’Longhi Group
|
02 Report on operations 67
Consumer
relations
Consumer relations
The De’ Longhi Group’s brand reputation is rooted
in the high quality of its products and customer loy-
alty that has been built over time. Different factors
and activities contribute to promoting the Compa-
ny’s reputation, including clear communication
which anticipates and guides the purchase, a post-
sales service which is focused on the consumer, as
well as the constant commitment to privacy and
data protection. The Group, in fact, works to safe-
guard the data of its customers in accordance with
the law and is committed to mitigating the risks
associated with obsolete telecommunications and
data processing technologies. Toward this end, the
Group monitors changes in the regulatory frame-
work constantly, paying particular attention to the
Artificial Intelligence Act, a regulation proposed by
the European Union which soon could have an
impact on the extended liability of the
manufacturer.
With regard, again, to regulation, the main regula-
tions shaping the Group’s efforts to satisfy the
needs of consumers relate, specifically, to empow-
ering consumers for the green transition by work-
ing to improve protections against unfair practices
and information, product guarantees and the right
to repairs.
For more detailed information on the management
of risks linked to consumer relations, refer to the
table “The main risks linked to non-financial topics
and management methods”, specifically the item
“Consumer Relations”, in the Note on Methodology.
Business and organizational model
The De’ Longhi Group’s external communication is
managed by the Marketing and Communication Di-
vision, which coordinates both the centralized ac-
tivities and the ones at the marketing offices of the
local branches, in order to enhance the identity of
the each of the Group’s brands. each brand. The
Customer Care division is responsible for support-
ing the end consumer in the various phases of the
customer journey. Customer support is, lastly, also
guaranteed by the contact center and technical as-
sistance centers which are located in all the mar-
kets in which the Group operates. These organiza-
tions, primarily outsourced, provide a service which
is essential to customer care, working, on the one
hand, to increase customer satisfaction and, on the
other, to maximize product durability.
One of Customer Care’s main activities is to devel-
op processes which guarantee that the Group is
aligned with customer expectations. More specifi-
cally, in the last few years one of the trends that has
impacted Customer Care is the increase in e-com-
merce sales volumes. The disintermediation is, in
fact, having a significant impact on the relationship
between the Company and consumers, increasing
the number of direct sales (B2C) which, in turn, re-
quires that increasing attention be paid to the direct
relationship with customers.
Given the continuous contextual change, and in
light of the communication opportunities created
by the use of digital instruments, already in 2022
Customer Care had decided to renew its strategy
based on two key elements: on the one hand, the
involvement of stakeholders in order to understand
the different needs, on the other, the study of cus-
tomer care best practices. This resulted in the defi-
nition of guidelines for the redesign of the Group’s
strategy which was renewed in 2023.
From an operational standpoint, the Group’s main
CRM (Customer Relations Management) tool
(based on the management system – SAP C4C
(Cloud For Customer) – which makes it possible to
monitor the interactions with the final customer,
guaranteeing the quality of the service provided
and standardizing the traceability of the relations.
A control dashboard equipped with a few key pa-
rameters, developed through the use of the SAP
Analytic Cloud, compiles a vast range of data as
graphics which allows the customer care special-
ists to receive crucial information in order to contin-
uously improve the speed and the quality repairs,
which has a positive impact on the average repair
time.
Another key tool for Customer Care is Wonderflow,
the company’s VoC management (Voice of
De’Longhi Group
|
02 Report on operations 68
Customer) system – which, to date, is the main
means used by the Group to analyze the sentiment
of its customers and, consequently, improve its ser-
vice. More in detail, this system not only makes it
possible to examine consumers’ product reviews
submitted through the more than 70 online retail
channels, but also to cross-reference these reviews
with the feedback of customers made directly
through De’ Longhi channels. In this way, by using
Big Data Analysis, year after year the Group has
been able to improve its listening strength, and un-
derstand the needs of consumers, as well involve
all the stakeholders and monitor the performance
of products in the different markets in which it op-
erates. The precision of these analyses and the at-
tention given to them makes it possible to develop
geographic clusters and identify targets for im-
provement which increases the organizational effi-
ciency, the quality of products and service and,
consequently, customer satisfaction.
Together, SAP C4C and Wonderflow make it possi-
ble to define key monitoring indicators and develop
solutions based on objective data. The systems
also allow the Group to gather information on its
products and those of other sector companies,
through tools like text analysis, text mining, senti-
ment analysis and rating breakdown – which pro-
vide a complete and detailed vision of the many
aspects of the needs in the market where the Group
operates.
As part of its customer care services, and specifi-
cally, web self-service
22
, the Group uses a system
that leverages on artificial intelligence to quickly
provide customers with functional replies and solu-
tions. More in detail, the web self-service is able to
analyze the users’ questions and independently
formulate an exhaustive reply which provides a
solution to the problem found. Subsequently, a
group of specialists validate the AI reply and con-
tact the customer in order to guarantee efficient
and quality service. The service, already active in
English-speaking countries and in Italy, in 2023 was
expanded to include Germany, Belgium, France
and the Netherlands. This expansion was
facilitated by the implementation of sophisticated
simultaneous translation systems, which use AI to
translate the content of e-mail and web-chat that
allows the operators to reply efficiently to the cus-
tomers’ needs, regardless of their native language.
With regard to technical assistance, the Group
counts on approximately 1,800 service centers
worldwide, of which 300 in Italy. In the past few
years, despite the geopolitical and global market
difficulties, the service has demonstrated great re-
silience, maintaining high quality standards and
continuously reducing the average repair time.
This success is attributable to the significant in-
vestments made by the Company over the past few
years, like expanding the Group’s largest repair
center in Germany which now has an installed
repair capacity of about 60 thousand machines per
year, 50% higher than the previous structure.
In addition to sharing joint guidelines and stand-
ards, Customer Care constantly monitors the quali-
ty of the service provided by the contact centers
and the repair centers through inspections and
22 The web self-service is an assistance model that allows
users to access information without having to interact with
an operator. It can include tools like a FAQs (Frequently
Asked Questions) section, digital instruction manuals,
video guides, chatbots or support forums.
De’Longhi Group
|
02 Report on operations 69
Policies and objectives
The De’ Longhi Group’s actions are focused on the
improvement of the assistance provided to cus-
tomers and the longevity of its products. While a
specific policy has yet to be formalized, the Group’s
strategy is shaped by the objective of meeting its
customers’ needs and focused primarily on provid-
ing accurate product information and adequate af-
ter-sales care.
The Group’s Code of Ethics has an important role in
internal and external communications. Inside this
document there is, in fact, a specific section in
which the methods to be used in customer interac-
tions are described. In order to provide the highest
quality service, the Group works to guarantee that
relationships with customers are professional,
timely, attentive, open, respectful, collaborative and
passionate.
Based on the Code of Ethics the disclosures made
both inside and outside the Group must comply
with the law, regulations, as well as professional
best practices, and be clear, transparent, timely and
accurate.
Key figures
The work done by Customer Care brought an in-
crease in customer services, which are monitored
through two indicators: the First Time Fix and the
analysis of the KPI. In order to improve service
quality, specific training sessions are offered peri-
odically to employees and specialized partners,
held primarily online thanks to the availability of
e-learning platforms, but also in-person. In 2023
classroom training sessions were offered to cus-
tomer care personnel: the activities were designed
internally, in collaboration with an outside agency,
and then offered to 50 technical the periodic visits
of repair centers, interrupted due to pandemic re-
strictions, continued. Lastly, the assistane employ-
ees and to five employees responsible for the cus-
tomer care networks. The activities combined
theory with practice: in addition to a few classroom
sessions, a practical exercise was held at the
centers, where the interaction abilities and the
commercial expertise acquired were assessed.
Lastly, another important aspect of the relationship
with the consumer is data processing. This topic
has become increasingly important, in light of up-
dated regulations, as well as the quantity of the
data handled by the Group. Toward this end, for
years the Company has been storing the informa-
tion provided by consumers on Google Cloud Plat-
form servers, a platform which guarantees data
protection in compliance with data protection laws
(specifically the General Data Protection Regula-
tion – GDPR 2016/679) and the main international
standards for information security (ISO 27001) and
cloud services (ISO 27017 and ISO 27018).
23 The procedure undertaken by the Trento Chamber of Com-
merce did not result in any fines.
Turnaround Time. Testimony to the quality of the
repair service, the first came close to reaching
100% in 2023: this indicator measures the percent-
age of repaired products which – once repaired -
did not require further repairs. The second, which
measures the average time needed to address the
problems reported by the user and find a definitive
solution, dropped consistently over the last three
years.
Lastly, with regard to marketing and labeling non-
compliance, there was only one case in 2023 when
the Group was notified by the Trento Chamber of
Commerce that a customer had complained about
the lack of a safety manual inside the packaging of
an Ariete product
23
.
With the exception of the above, there were no in-
stances of noncompliance which involved con-
sumer relations, nor in relation to data processing
and protection. There were no data breaches in the
two-year period 2022-2023.
De’Longhi Group
|
02 Report on operations 70
Supply
chain management
Risk scenario
Preventing and managing the risks associated with
the supply chain is essential to ensuring the conti-
nuity of the Group’s business. The De’ Longhi
Group does not limit itself to simply ensuring a
timely distribution of products and highquality
parts, but is committed to making sure that its sup-
pliers adhere to the best practices for working con-
ditions, the health and safety of workers, respect of
human rights and environmental responsibility.
While 2022 was a very complex year for supply
chain management, caused, on the one hand, by
persistent restrictions linked to the pandemic and,
on the other, interruptions in a few market seg-
ments due to the outbreak of the Russian-Ukrainian
conflict, 2023 was a year of transition, character-
ized by uncertainty, but also positive results.
During the year, the global market conditions and
the unstable geopolitical context required that the
Group monitor inflation rates, foreign exchange
rates and tensions in EMEA (Europe, the Middle
East, Africa) constantly. In a year which saw a gen-
eralized increase in production volumes the Group,
however, was able to guarantee the continuity of its
supply chain and minimize its costs, thanks also to
effective inventory management and lower unit
shipping costs.
For more information on the measures used to ad-
dress and manage supply chain risks please refer
to the table “The main risks associated with non-fi-
nancial issues and management methods” in the
Note on Methodology.
Business and organizational model
Supply chain management is carried out by the
Supply Chain Division, together with Quality and
Purchasing, with a view to ensuring business conti-
nuity and compliance of the Group and its suppliers
with the highest quality standards, as well as social
and environmental requirements.
In order to respond to the specific needs of the dif-
ferent markets in which the Group operates effec-
tively and quickly, three offices are involved in mon-
itoring and supporting the providers of finished
products based on product category and proximity
to production. Consequently, the offices focused
on coffee and irons are in Italy; motor-driven prod-
ucts are managed through the UK office and, lastly,
the office in Hong Kong focuses on comfort.
In Europe, Supply Chain is responsible for manag-
ing the volumes and logistics of materials, as well
as semi-finished goods used in production; this
process is carried out through two different operat-
ing locations, located in the Italy and Romania
which work with the offices referred to above. Man-
agement of materials in the Chinese plants is su-
pervised directly by the plant directors with the
support of three purchasing offices broken down
by product category.
The Quality Division is responsible for the periodic
audits of the suppliers of finished products, in order
to assess qualitative, social and environmental per-
formance. More in detail, the audits are carried out
every two years: the audits make it possible, on the
one hand, to that the quality of the products and
materials meet the Group’s needs and, on the other
hand, to guarantee compliance with social criteria
like the protection of human rights and compliance
with the main environmental regulations.
The social audits are carried out in accordance with
the international standard SA 8000 (Social Ac-
countability) which assess aspects including free-
dom of association and collective bargaining, work
hours, work conditions, health and safety, child
labor, forced labor, discrimination and training of
personnel. The assessment criteria take into ac-
count the level of social risk associated with the
different countries; for this reason, most of the
audits are made in China as the social risk is gener-
ally higher compared to other countries where the
Group’s suppliers are located. Along with these
social criteria, there also indicators used to audit
the environmental performance which include
emissions, water and waste disposal, as well as
verification of a management system compliant
with the ISO 14001 standard.
The Code of Ethics is another tool used to monitor
the activities of suppliers. This document is shared
with all the Group’s commercial parties through a
dedicated vendor portal, where the Code’s original
text is available in English, Italian and Chinese. This
makes it possible for suppliers to fully understand
the Code, comply with obligations, adhere to the
principle and adjust its activities in order to comply
with any requests made as a result of the audits.
The same portal houses the “Responsible sourc-
ing guidelines”, which define the associated risk
criteria and determine a specific control regime for
all the Group’s vendors based on three factors: type
of provider, geopolitical area of origin and impor-
tance of the business. Thanks to the constant up-
dating of the assessment criteria, the Group is able
to carry out a complete assessment of the suppli-
er’s situation and guarantee effective monitoring of
the risks.
This entire assessment process is monitored and
formalized in a procedure based on which all sup-
pliers of finished products are subject to SCOC
(Social Accountability Code of Conduct). This pro-
cess is broken down in different phases, which
begins with gathering data and continues with re-
porting and monitoring of any corrective actions,
as well as specific follow-up. All these activities are
recorded in a specific system which makes it possi-
ble to trace the commitments made by suppliers
over time.
With the lifting of restrictive measures
De’Longhi Group
|
02 Report on operations 71
implemented as a result of the Covid-19 pandemic,
the vendor audits are now done entirely in person,
in order to ensure more accurate audit outcomes,
The digital instruments are now used exclusively
for complementary activities, like receiving and
sending any follow-up which do not require on-site
verification and checking the information provided
in documents which can be done via e-mail. This
mechanism is valid for audits of historic suppliers,
as well as the more recent ones.
Product quality is assessed based on a group of
specific indicators:
1. Technical Factory Audit (TFA): measures the ef-
fectiveness of the vendor’s processes and evalu-
ates the results of tests relating to product life.
This type of audit is conducted every year and
focuses on both the initial qualification, as well
as subsequent periodic monitoring of vendors.
As mentioned above, the checklist for this type of
audit includes a section dedicated to environ-
mental issues
2. Quality Evaluation (QE): measures product
quality based on statistical sampling of each
single lot.
3. On Time Delivery (OTD): measures the delivery
time of the supplier and, more specifically, the
difference between the delivery date agreed
upon and the actual one.
4. Order Fill Rate (OFR): measures the ability of
the supplier to refill the entire quantity request-
ed by the Group.
The assessments of product quality are included in
a vendor rating which is used to classify partners
in four categories - preferred, approved, probation
and exit plan - as well as evaluate the structure and
intensity of partnerships in the future, with a view
also to continuous improvement.
Policies and objectives
The relationships between the De’ longhi Group and
its vendors are governed by the Group’s Code of
Ethics which lists the criteria which both parties
must adhere to: on the one hand, compliance with
applicable law and regulations and, on the other
hand, compliance with the general principles de-
fined in the Code. The supplier selection process,
furthermore, should be done based on an objective
comparison of quality, price, execution and assis-
tance while avoiding any and all forms of favoritism
or discrimination. The Group suppliers must
ensure that the working conditions of its employ-
ees do not violate basic human rights, comply with
international agreements and current law. In order
to extend the Group’s control across the entire
value change, and not just with its own suppliers,
the supplier must provide its sub-contractors with a
copy of the updated and translated Code of Ethics.
In addition to managing the assessment and moni-
toring of new suppliers, the Supply Chain Division
and Quality will work to establish long-term rela-
tionships. More specifically, the divisions work to
create a simplified network which favors direct de-
liveries, consistent with the Group’s expectations.
This approach allows the Group to respond not
only to market requests, which change constantly
and require flexibility, but also the needs dictated by
production.
Key figures
In 2023, all the new suppliers of finished products
were subject to a social accountability audit, in ac-
cordance with standard SA 8000 (100%). To date
none of the SCOC (Social Accountability Code of
Conduct) audits had a “zero tolerance” outcome and,
therefore, resulted in the termination of the relation-
ship with the supplier.
As for the environmental aspects, in 2023 environ-
mental audits of 15 new providers of finished prod-
ucts or 100% of the new providers, were carried out,
consistent with the prior two-year period.
In 2023 a total of 49 audits were carried out in order
to verify that no human rights violations had oc-
curred at the 45 suppliers of finished products and 4
Group assets. This covered around 44% of the
Group’s operations which, while lower than in 2022,
is consistent with the fluctuations and biannual
schedule of the audits and remains in line with 2021.
De’Longhi Group
|
02 Report on operations 72
Number and percentage of transactions
subject to human rights assessments
New suppliers of finished products subject to
social accountability and environmental audits
Total number of operations that have been subject to human rights reviews
Total number of operations
Percentage of operations that have been subjected to human rights reviews
2021
2022
2023
46
60
109
95
42.2%
63.2%
43.8%
49
112
Number of new suppliers
Number of suppliers audited
Percentage of new suppliers audited out of total
2021
2022
2023
14
6
14
6
100.0%
100.0%
100.0%
15
15
De’Longhi Group
|
02 Report on operations 73
Mitigation
of environmental impact
Risk scenario
The De’ Longhi Group, which operates daily in an
international environment of continuous change,
pays constant attention to the proper management
of its manufacturing processes, consistent with the
relative legal requirements. Consistent, further-
more, with the constant changes in the regulatory
and market backdrop, the Group’s environmental
policies, which are crucial to responsible business
management and reducing its impact, are updated
regularly.
For more information about environmental risks, as
well as the Group’s risk management, please refer
to the section “Risk factors for the De’Longhi
Group”, specifically paragraphs 15 (Risks relating to
changes in the regulatory framework) and 16
(Risks relating to environmental harm) in the sec-
tion “Risk factors for the De’Longhi Group”.
For more information on the measures used to pre-
vent and manage environmental risks please refer
to the table “The main risks associated with non-fi-
nancial issues and management methods” in the
Note on Methodology.
Business and organizational model
At a Group level, the environmental aspects are
managed by the Operations & Technology and
Quality Divisions. Toward this end, over the last few
years, the De’ Longhi Group has worked to obtain, in
2022, ISO 14001:2015 certification for all the envi-
ronmental management systems in place at the
production facilities. This certification ensures the
presence of a system capable monitoring the envi-
ronmental impact of the activities, as well as imple-
ment improvements and mitigation. Over the years
the Group has made multiple investments in,
among other things, the production of clean energy,
more modern and more efficient plants and optimi-
zation of the manufacturing processes.
As for the production of electricity from renewable
sources, a number of years ago the Group installed
solar panels at the Mignagola plant which in 2023
produced 862,318 kWh of energy, part of which
was sold to the electric grid – thus contributing to
the reduction of the domestic energy mix. The on-
site production satisfies about 6% of the electricity
needs and reduces the dependence on the national
grid. The installation of solar panels was also ex-
tended to a few commercial branches and prepara-
tion for the installation of a solar energy system at
the Cluj plant in Romania was begun recently. With
an installed capacity of around 3 MW, the system
will cover a sizeable portion of the site’s energy
needs and will be the Group’s largest solar energy
system. In the current reporting year, a total of
882.058 kWh of renewable energy were produced
and consumed.
With a view to improving energy efficiency, move-
ment sensors were also installed at the Mignagola,
Cluj, Salonta and Dongguan plants; as a result of
these sensors lights are activated only when move-
ment is detected. At the same plants and the Trevi-
so headquarters, meters which monitor consump-
tion and energy efficiency were installed. At the
same time, in order to optimize consumption, LED
relamping is underway: if in the last few years
relamping was carried out mainly at the European
plants, in 2022-2023 significant progress was
made also at the Chinese sites where currently only
energy efficient lightbulbs are being used. More
specifically, in 2023, thanks to the installation of
more than 1,500 LED lamps it was possible to
lower consumption by 1,759,241 MJ, in the Dong-
guan site alone
24
.
Beginning in 2021 at the Dongguan plant another
efficiency initiative was launched aimed at replac-
ing traditional hydraulic injection plastic molding
machines with new machines that rely an electric
servomotor capable of maintaining high produc-
tion levels, with less energy consumption. In 2023
this substitution resulted in energy savings of
3,801,600 MJ
25
.
At the Mignagola plant the analysis and planning of
a new product testing process for coffee machines,
based on air tests continued. Not only would this
innovation make it possible to save around ½ a liter
of water per test, but it would be possible to reduce
the amount of time and energy needed.
Another division which makes a crucial contribu-
tion to reducing environmental impact is Research
and Development which is involved in the design of
eco-sustainable products beginning with the
choice of materials, as well as packaging, through
obsolescence. More in detail, R&D uses a scientific
approach both locally and on a corporate level to
design and develop solutions which increase the
energy efficiency, durability and repairability of the
products, as well as reduce the consumption of
24 The estimated reduction in consumption was made in
comparison to 2021.
25 The estimated reduction in consumption was made in
comparison to 2021.
De’Longhi Group
|
02 Report on operations 74
resources and production of waste generated by
company operations. Please refer to the section
“Product innovation and quality” for more
information.
In regard to the last topic, the Group developed sev-
eral strategies for the responsible management of
the waste generated during production which aim
to be more aligned with the circular economy con-
cept. At the Mignagola and Dongguan plants,
therefore, projects were implemented which call for
the recovery of plastic scraps that are then reused
in the manufacturing cycle which reduces waste.
Starting in the second half of 2022, a similar initia-
tive was begun at the plants in Cluj and Salonta,
where in 2023 100% of the waste generated by the
plastic molds was recycled.
More efficient waste management is not limited to
plastic: waste generated by work done with metal
was resold as a raw material, while paper, card-
board and nylon scraps are sent to be regenerated.
The use of this method will, in fact, make it possible
to save a whopping 150 tons of coffee per year.
Careful management of purchased goods also and,
above all, involved coffee. Toward this end, initia-
tives are being worked on to minimize consump-
tion and recycle any waste. More specifically, at the
Mignagola plant, adjustments to the calibration of
the coffee grinder during coffee testing was tested:
this initiative, once completed, will result in a saving
of more than 150 tons of coffee a year and lower
energy consumption by around 80%, without com-
promising the quality of the process.
Responsible waste management is also expressed
through the special attention given to recycling, at
both the offices and the production facilities: spe-
cial signage and targeted training focused on how
to correctly dispose of waste aims to increase the
quality of the recycling system. In 2023 specific
training was offered at the Dongguan plant, while at
OnShiu an initiative to reduce hazardous waste,
through the installation of new pressurized filters,
was implemented.
The use of sustainable packaging is another area
to which the Company is committed. Beginning in
2020 LCAs (Life Cycle Assessment) of the different
types of packaging used were carried out in in order
to find more environmentally friendly alternatives.
Based on the results obtained, the Group decided
to focus on reducing the quantity of EPS (Expanded
Polystyrene) used in product packaging. In the last
few years, the percentage of EPS-free packaging
has increased constantly: in 2023, 69% of the prod-
ucts distributed by the Group were without EPS, an
improvement of more than ten percentage points
compared to the prior year.
The packaging efficiency initiatives also involved
the Group’s internal logistics and operations: at the
Chinese plants and the one in Cluj the goal is to
reuse the plastic and cardboard packaging of the
components delivered which are otherwise dis-
posed of upon arrival. More specifically, in 2023 at
the Romanian plants some plastic wraps used for
packaging were substituted with reusable Polyeth-
ylene (PET) tapes which led to a reduction in plastic
waste of approximately 5 tons.
Aware of how important reducing the environmen-
tal impact along the entire supply chain is, the
Group started implementing initiatives to reuse
packaging which also involves suppliers. In 2023 at
the Dongguan plant, where the majority of the prod-
ucts purchased end up, a project was launched in
collaboration with the main suppliers which, in
2024, will result in the use of reusable returnable
plastic boxes.
In the last few years wooden pallets have been re-
placed with pallets made out of recycled plastic,
which are lighter and more durable, at the Mignago-
la, Dongguan, OnShiu plants and, to a large degree
at the Cluj and Salonta facilities.
In order to improve air quality, systems which mon-
itor the emission of pollutants from chimneys were
installed at the Cluj, Salonta, Mignagola plants and,
beginning in 2023, also at Dongguan. These sys-
tems make it possible to measure the quantity of
harmful substances in the air with a view to both
monitoring and reduction.
Policies and objectives
Currently the Group does not have a formalized en-
vironmental policy, although the Code of Ethics,
which is applied to all the De’ Longhi companies,
states clearly that all activities are shaped by the
need for environmental protection and public
safety in accordance with the law. This principle
results in the development of projects and process-
es which are implemented in accordance with
scientific literature and environmental best practic-
es in order to prevent pollution, respect the com-
munity and protect the environment, as well as the
landscape. In this way the Group, while pursuing its
objectives for product, financial and social develop-
ment, works to find a balance between economic
initiatives and environmental needs, including and
above all with respect to future generations.
Within this framework, for each of the Group’s
plants, the requisites for the ISO 14001:2015 certi-
fications , the environmental policies in effect and
the related procedures not only ensure compliance
with the current regulations, but also the commit-
ment to improvement in the different environmen-
tal aspects including: optimization of water and
energy consumption, the reduction or, where possi-
ble, the elimination of any kind of pollution and the
implementation of technologies and processes to
minimize environmental risks.
Key figures
Nel 2023, the increase in production volumes re-
sulted in higher energy consumption which
amounted to 437,701 GJ (+18% compared to the
prior year).
The Group’s consumption can be divided in direct
and indirect: the first is explained above all by the
use of the tri-generator at Mignagola, the corporate
fleet, the natural gas used for heating and produc-
tion; the second ones are connected largely to con-
sumption of electricity for production, lighting and
De’Longhi Group
|
02 Report on operations 75
district heating and air conditioning. The direct
consumption represents 37% of the total, higher
than in the prior year (+41%) due primarily to the in-
crease in the consumption of natural gas used to
run the tri-generator at the Mignagola plant which
accounts for almost 80% of the Group’s total natu-
ral gas consumption. This system produces a
power that can be used for heat, cooling and elec-
tricity by lowering the dispersion during the trans-
port phase and is more efficient than the traditional
gas heating system supported by an electrical
system that is supplied through the national grid.
The electricity consumption per unit of production
was lower, coming in at 5.8 kWh/unit of production.
Energy consumption U.M.
Production facilities Other types of offices
26
De’ Longhi Group
2021 2022 2023 2021 2022 2023 2021 2022 2023
Direct energy consumption from non-renewable sources
Gasoline GJ 3,948 4,945 3,015 7,181 8,883 12,253 11,129 13,828 15,268
Diesel GJ 6,991 5,696 6,063 18,274 18,759 18,008 25,265 24,455 24,071
Natural gas GJ 42,869 66,777 114,228 5,115 5,934 3,932 47,984 72,711 118,160
LPG GJ 518 347 304 712 707 607 1,231 1,054 911
Fuel oil GJ - - - 61 1 - 61 1 -
Total GJ 54,327 77,765 123,610 31,343 34,284 34,800 85,670 112,049 158,410
Direct energy consumption from renewable sources
Energy produced from
renewable sources and
consumed
GJ 3,423 3,338 3,104 - - 69 3,423 3,338 3,173
Total direct consumption GJ 57,750 81,103 3,104 31,343 34,284 69 89,093 115,387 3,173
Indirect consumption
Electricity purchased GJ 296,557 218,380 240,890 34,291 35,398 33,812 330,848 253,778 274,702
District heating GJ - - - 2,322 2,599 1,059 2,322 2,599 1,059
Cooling GJ - - - - 367 358 - 367 358
Total indirect consumption GJ 296,557 218,380 240,890 36,613 38,364 35,229 333,170 256,744 276,119
Total consumption GJ 354,307 299,483 367,604 67,956 72,648 70,098 422,263 372,130 437,702
Products plants (GJ)
Other types of offices (GJ)
Energy consuption (KWh/units produced)
2021
2022
2023
354,307
299,483
67,957
72,648
5.3
6.7
5.8
26 “Other types of offices” includes the offices, distribution
branches, warehouses and, in general, all of the De’ Longhi
Group’s structures not related to production.
367,604
70,098
De’Longhi Group
|
02 Report on operations 76
In 2023 total Scope 1 and Scope 2 CO2 emissions
(calculated using the “Location Based” method)
reached 42,863 tons, 24% higher than in 2022 and
consistent with the increase in production. The
direct emissions account for 12% of the Group’s
total, while the indirect location based emissions
account for around 88%. More in detail, if the first
are generated mainly by the corporate car fleet
(57% of the Scope 1 emissions), the second ones
are explained primarily by the consumption of elec-
tricity (86% of the Scope 2 location based emis-
sions)
27
and the tri-generator at Mignagola (14%).
Lastly, in 2023 the indirect market-based emissions
were 55% lower than in the prior year and 64%
lower than in 2021. This trend is attributable mainly
to the increase in the purchase of guarantee of
origin (GO) certificates which guarantee that the
electricity consumed comes from renewable
sources and which today covers the consumption
at all the production plants, as well as at the com-
mercial branches located in the United Kingdom
and Ireland or 89% of the Group’s total electricity
consumption.
Emissions [ton CO
2
]
Production facilities Other types of offices
28
De’ Longhi Group
2021 2022 2023 2021 2022 2023 2021 2022 2023
Direct 3,249 3,067 2,166 2,215 2,416 2,947 5,464 5,483 5,113
Indirect - Location Based 35,523 25,544 34,376 3,460 3,608 3,374 38,983 29,152 37,750
Indirect - Market based 23,452 16,417 5,128 1,974 4,259 4,133 25,426 20,496 9,261
TOT (Direct + Indirect + Location Based) 38,772 28,611 36,542 5,675 6,024 6,321 44,447 34,635 42,863
TOT (Direct + Indirect + Market Based) 26,701 19,484 7,294 4,189 6,675 7,080 30,890 25,979 14,374
27 As of 2023, the Scope 1 calculation includes the loss of re-
frigerants, used at both the production plants and in the
branches, which produced 606.5 tons of CO
2eq
.
28 “Other types of offices” includes the offices, distribution
branches, warehouses and, in general, all of the De’ Longhi
Group’s structures not related to production.
Production plants (tons CO
2
)
Other types of offices (tons CO
2
)
2021
2022
2023
35,523
25,544
3,460
3,608
34,376
3,374
De’Longhi Group
|
02 Report on operations 77
In 2023, 12,345 tons of waste were produced, an
increase of 33% compared to 2022 and is explained
by the increase in production, while the breakdown
between non-hazardous (98%) and hazardous
waste (2%) was unchanged. The percentage of
the waste which was recycled, regenerated and/or
reached 89% of the total, slightly higher than in the
prior year which testifies to the Group’s increasingly
concrete commitment to the adoption of sustaina-
ble circular economic practices.
Waste produced
29
U.M.
2021 2022 2023
Hazardous Non-hazardous Hazardous Non-hazardous Hazardous Non-hazardous
Reuse ton 1 - 1 - - 220
Recovery ton 21 2,396 19 2,055 34 1,907
Recycling ton 10 8,572 35 5,989 18 8,859
Composting ton - 198 - 50 - 18
Incineration (with energy recovery) ton 33 904 46 500 54 428
Incineration ton 48 - 28 18 82 -
Land fill ton 67 215 11 190 2 406
Storage ton 51 23 7 14 - -
Other ton 59 71 44 289 36 281
Total ton 290 12,379 190 9,104 226 12,119
Non-hazardous waste
Hazardous waste
2021
2022
2023
12,379
9,104
290
190
Waste produced at the production plants
in three-year reporting period (tons)
29 78% of waste produced in 2023 by De’ Longhi Group was
treated off-site.
12,119
226
De’Longhi Group
|
02 Report on operations 78
Reuse
Recovery
Recycling
Composting
Incineration
(including energy recovery)
Incineration
Landfill
Storage
Other
Hazardous waste produced in 2023 broken down by disposal method Non-hazardous waste produced in 2023 broken down by disposal method
15.3%
8.1%
23.7%36.1%
0.8%
16.0%
Reuse
Recovery
Recycling
Composting
Incineration
(including energy recovery)
Incineration
Landfill
Storage
Other
15.7%
73.1%
0.2%
3.5%
3.3%
2.3%
1.8%
De’Longhi Group
|
02 Report on operations 79
Note on Methodology
Definition of the material topics
The materiality analysis guides De’ Longhi in the
choice of the topics to report on in order to provide a
complete and clear picture as to the economic, envi-
ronmental and social impact of the Group’s activities.
In 2022, the materiality analysis was updated in order
to comply with the new GRI Standards 2021; this
analysis was confirmed in 2023.
The company’s material topics are identified, in ac-
cordance with the Standard, based on the impacts,
current and potential, that the organization’s business
and commercial relationships could have on the
economy, the environment and people, including on
human rights. This includes negative and positive im-
pacts, short-term and long-term, intentional and vol-
untary, reversible and irreversible.
The Group’s material analysis was carried out in four
different phases:
1. Understanding of the Group’s operating environ-
ment: an analysis of different documents was
carried out using different sources, both internal
and external, including documents published by
a panel of companies active in similar sectors,
sector trends identified by consulting the publi-
cations of the main international trade associa-
tions and organizations, and newspaper articles
relating to important events that affected the
company during the year.
2. Identification of De’ Longhi’s current and potential
impacts: during this phase the organization identi-
fied the current and potential impacts that its ac-
tivities and business relationships could have on
the economy, the environment and people, includ-
ing the human rights of the latter. The current im-
pacts are those happening now or have material-
ized over time while potential impacts are those
that could materialize in the future.
3. Assessment of the significance and relevance
of the impacts: all the impacts were assessed
by evaluating the degree of significance deter-
mined based on the Standard’s criteria.
4. Prioritization of the most significant impacts for
reporting purposes: the Group’s most significant
impacts were prioritized and the most relevant
impacts informed the identification of the material
topics included in this Non-Financial Statement.
The Group also assessed and classified its impacts
based on two parameters, severity and probability.
The severity of a real or potential impact is deter-
mined by its scale (how serious is the impact), the
scope (the breadth of the impact) and the irremedi-
able characteristics (how difficult it is to mitigate or
remedy the damage caused). The probability can
be defined as the likelihood that the impact will ma-
terialize, taking into account the preventive actions
adopted by company. The impacts that the De’
Longhi Group might have caused were classified
based on their severity and probability, namely
based on their significance. As a result of the anal-
yses, the Group approved a list of 13 material
topics: three relating to the environment, two to
governance and eight to social aspects. Lastly,
after having identified the significant impacts and
defined the material topics, the GRI associated with
the impact to be reported on were identified.
The list of the material topics determined after the
identification and grouping of the relevant impacts
is provided below. The Topic-Specific GRI Disclo-
sures for each material topic are also provided.
Reporting scope and standards used
In accordance with the Decree, the reporting scope
corresponds with the scope of consolidation used
in the consolidated financial statements, namely
the continuing operations fully consolidated using
the line-by-line method in the financial reports,
unless provided otherwise.
In 2023 a new company, “De’ Longhi LLP”, with reg-
istered offices in Kazakhstan, was added to the
scope of consolidation. The date of inclusion in the
scope of consolidation coincides with what was
determined for the financial figures.
The information and figures used in this section
refer to FY 2023.
The Group used the “with reference” option of the
GRI Sustainability Reporting Standards (hereinafter
the GRI Standards), published by the GRI – Global
Reporting Initiative, to prepare its NFS. More in
detail, when preparing the NFS, reference was
made to the Standard GRI 1: Foundation, the report-
ing principles and the GRI content index.
De’Longhi Group
|
02 Report on operations 80
Legislative
Decree 254
Material topics Impacts GRI Topic-Specific Disclosure
Environmental
aspects
Management of the GHG emissions
and fight against climate change
The use of fossil fuels and electricity generates direct and indirect Greenhouse gases which contribute to climate
change. In order to mitigate and offset any impacts, the Group works to implement solutions which will help to save
energy and encourage the use of energy from renewable sources.
GRI 302-1, 302,2
GRI 305-1, 305-2
Human resources
management
Inclusion and equal opportunities
An inadequate management of the aspects relating to inclusion and equal opportunities could lead to episodes of
discrimination. Through policies, procedures and initiatives coordinated with HR, the Group works to reduce the risk of
these episodes.
GRI 405-1
GRI 406-1
Environmental
aspects
Waste management and circular
economy
The use of non-recyclable materials and inadequate management of the manufacturing waste could have a negative
impact on the eco-system. In order to mitigate the impact, the Group adopts avantgarde waste management practices,
fully compliant with the laws in effect.
GRI 306-3, 306-4, 306-5
Human resources
management
Health and safety of workers
The health and safety of workers is a top priority for the Group. In order to avoid any potential risks stemming from
production, the company adopts specific management practices to manage health and safety on the job and is
committed to ongoing monitoring and improvements.
GRI 403-9
Human rights Respect of human rights
The Group is committed to protecting human rights. In order to lessen the likelihood of a violation, relative to both
operations and along the value chain, De’ Longhi has implemented specific initiatives aimed at monitoring the practices
of its suppliers. The Group also provides training courses in topics and procedures relating to the respect of human
rights.
Non GRI KPI: transactions
assessed with respect to
human rights
Social aspects Promotion of sustainable lifestyles
Aware of its role as an influencer with its customers and stakeholders, the Group promotes the adoption of healthy
lifestyles, the use of sustainable food products and good practices for a healthy and balanced diet.
-
Social and
environmental
aspects
Responsible supply chain
management
Irresponsible management of the supply chain could have a negative social and environmental impact. The De’ Longhi
Group has, therefore, adopted tools and mechanisms which reduce the risk that the impact materializes.
GRI 414-1
GRI 308-1
Environmental
aspects
Innovation and eco-design
The irresponsible use of materials, including the during the procurement phase, could damage the eco-system. For this
reason, the Group has defined guidelines in order to promote innovative and sustainable solutions in the choice of
materials.
-
Social aspects Product safety and labeling
Labeling which is not transparent and complete could cause products to be used incorrectly and compromise consumer
safety. At the same time, failure to monitor quality during procurement and production could have repercussions. The
Group, therefore, works to guarantee constant quality and product safety controls, as well as transparency in labeling.
GRI 417-2
GRI 417-3
GRI 416-1
Social aspects Consumer satisfaction
For De’ Longhi consumer satisfaction is of the utmost importance. For this reason, it promotes surveys relating to
consumer needs and preferences order to establish loyalty and a lasting relationship.
-
Fight against
corruption
Ethics and business integrity
De’ Longhi is committed to conducting its business in accordance with principles of integrity, transparency, legality,
fairness, prudence and in compliance with the law.
GRI 205-2 (b, c, e)
205-3
Human resources
management
Talent acquisition and retention
In addition to the employee satisfaction, a key aspect for the Group is talent development by investing constantly in
human resources which guarantees stability, appeal and the creation of jobs.
GRI 404-1
Social aspects Use of consumer data
By promoting campaigns to heighten awareness as to the risks stemming from the use of personal data, the Group
works to guarantee the protection of consumer privacy.
GRI 418-1
De’Longhi Group
|
02 Report on operations 81
The main risks associated with non-fi-
nancial issues and management methods
The possible risks, inflicted and caused, associated
with the issues identified by the De’ Longhi Group as
“material” are reported in the following table, as well
as the main risks associated with and the relative
management of each Legislative Decree 254 area.
Legislative
Decree 254
Main risks Risk management tools
Fight against
corruption
• Risks connected to administrative liability of legal entities, particularly with regard to Legislative
Decree 231/2001 which introduced specific rules relating to liability for a few types of crimes to
the Italian legal system
• Risks tied to the Group’s current or past commercial relationships with related parties
• Reputational risk
• Group Code of Ethics
• Model of organization, management and control pursuant to Legislative Decree 231/2001
• Group’s internal control and compliance system
• Corporate Governance guidelines
• Procedure for Related Party Transactions
Human
resources
management
Human rights
• Risks connected to human resources management, particularly with regard to the Group’s abili-
ty to recruit, develop, motivate, retain and promote personnel with the attitudes, values, special-
ized professional and/or managerial skills needed to meet the Group’s changing needs.
• With regard to the Chinese platform, there are also a few risks related to high turnover of Chi-
nese blue-collar workers
• Risks tied to possible instances of discrimination
• Group Code of Ethics
• Model of organization, management and control pursuant to Legislative Decree 231/2001
• Group’s internal control and compliance system
• OHSAS 18001 compliant organizational model
• Worker safety and health policy in place at European plants
• Compensation policy for the BoD and executives with strategic responsibilities
• Performance review process
• MBO procedure
• Employee surveys
• For the Chinese plants: incentive schemes to foster staff retention, investment in training and
the development of more qualified internal resources, improvements in living and working condi-
tions inside the different plants
De’Longhi Group
|
02 Report on operations 82
Legislative
Decree 254
Main risks Risk management tools
Social
aspects
Environmen-
tal aspects
Product quality and innovation
• Risks connected to the De’ Longhi Group’s to continue with product innovation
• Risks associated with patents and trademarks
• Risks connected to product quality and liability for violations of the quality standards applied in
the different jurisdictions where the Group
• Risks connected with regulatory changes, relating in particular to environmental protection, es-
pecially the regulations relating to the safety and energy efficiency of electric household appli-
ances, recyclability and environmental friendliness.
• Group Code of Ethics
• UNI EN ISO 9001:2015 certified Quality System
• Food safety management model
• Quality policy
• NPD procedures
• Quality audits
• Constant monitoring of regulatory changes
• Registration of product patents and trademarks
Social
aspects
Consumer relations
• Risks associated with warehouse size and the timeliness of deliveries; more in detail, in the
event the Group doesn’t have an adequate quantity of products it could run the risk of not being
able to meet customer demand in a timely manner. Another risk stems from potential supply
chain issues which could impact the adequacy of the service provided
• Risks relating to IT systems: in relation to events which could compromise service continuity
and integrity of the data
• Group Code of Ethics
• Model of organization, management and control pursuant to Legislative Decree 231/2001
• Group’s internal control and compliance system
• GDPR policy (includes policy for the storage of data and procedure for the management of data
breaches)
• Training of employees in IT safety and privacy
• Presence of structures dedicated to monitoring the level of customer satisfaction
Social
aspects
Human rights
Supply chain management
• Risks connected to supplier relationships with regard, in particular, to reliable product quality,
logistics and timely deliveries, as well as relationships with company employees
• Risk of being dependent on a single supplier for certain types of components for strategic
products
• Group Code of Ethics
• Model of organization, management and control pursuant to Legislative Decree 231/2001
• Procedure for Related Party Transactions
• Social accountability audits
Environmen-
tal aspects
• Risks relating to environmental harm: the manufacturing done by the Group at its plants and fa-
cilities could harm third parties, cause accidents or environmental harm if serious breakdowns
or malfunctions were to occur
• Risks connected to climate change: extreme weather conditions (like floods, high levels of pre-
cipitation, hurricanes) could undermine the Group’s ability to operate
• Risks connected to inappropriate energy management practices: poor sustainability practices
in energy management could make it more difficult to reduce the energy footprint and/o accel-
erate climate change
• Group Code of Ethics
• UNI EN ISO 14001:2015 certified environmental management system for the European plants
• Group’s internal control and compliance system
• Environmental policy applicable also the production facilities in Mignagola and Cluj, as well as
the Kenwood plant.
• With regard to climate change risks, in the two-year period 2021-2022 the Group adhered to
management principles and methods inherent in the UNI EN ISO 14001:2015 environmental
management system. Furthermore, in the two-year period 2021-2022 the perceived risk stem-
ming from the possible impact that climate change could have on the business was mapped.
De’Longhi Group
|
02 Report on operations 83
The reporting process and the meth-
ods of calculation used
The content used in the NFS 2023 was prepared by
all the relevant company divisions and those re-
sponsible for the aspects referred to in the report.
The main methods of calculation used, and the rel-
ative updates, are listed below:
• for GRI Disclosure 403 (Occupational Health and
Safety) includes the number of injuries recorded
during travel on transportation organized by
De’Longhi and, therefore, excludes the other
instances;
• injury rate is the total number of injuries ex-
pressed as a percentage of the total number of
labor hours multiplied by 1,000,000, excluding
commuting accidents;
• severity rate is the total number of serious acci-
dents (which resulted in an absence of more
than 6 months) expressed as a percentage of
the total number of labor hours multiplied by
1,000,000;
• the first-time quality (FTQ) indicator is the
number of products without functional or esthet-
ic defects as a percentage of total production for
the year;
• the service call rate (SCR) is the number of ma-
chines repaired in the first year under warranty
as a percentage of total yearly sales. This indica-
tor is calculated quarterly on a rolling 12-month
basis;
• the first-time fix (FTF) indicator is the number of
repaired products that did not need further re-
pairs in the six months following completion of
the initial repair as a percentage of total product
repairs;
• greenhouse gas emissions are calculated
based on international guidelines and standards
“European Residual Mixes”, published by ABI for
the years 2020-2022, were used. For the United
States an average residual mix per eGrid Subre-
gion, calculated based on the residual mixes
shown in the document 2020 Green-e Residual
Mix Emissions Rates for 2021; for 2022 and
2023 a more updated version of the Green-e®
Residual Mix Emission Rates which contains
data for 2022 and 2023 was used. As for the
countries for which no residual mix figures were
available, location-based emissions factors
found in the above mentioned Terna table were
used.
District heating emissions were calculated using
the emissions factors found in the document “UK
Government GHG Conversion Factors for Company
Reporting” published by the Department for Envi-
ronment Food & Rural Affairs (DEFRA) table for the
three-year period 2021-2022-2023.
such as GHG protocol and ISO 14064-1:2018.
The only greenhouse gas considered was
carbon monoxide (CO
2
). The self-produced
energy from renewable sources was excluded
from the calculation of greenhouse gas emis-
sions as it is considered to be free of greenhouse
gas emissions.
The emission factors used to calculate CO
2
emis-
sions were determined as follows:
• Direct emissions (Scope 1): the emissions
linked to the consumption of natural gas, diesel
heating fuel, gasoline, diesel fuel and LPG for the
company cars were determined based on the
emission factors reported in the table of national
standards published by the Italian Ministry of the
Environment, for the years 2021, 2022 and 2023.
The emissions linked to refrigerants were calcu-
lated using the Global Warming Potential (GWP)
found in the Sixth Assessment Report of the In-
tergovernmental Panel on Climate Change
(IPCC).
• Indirect emissions (Scope 2): indirect emis-
sions are linked to the consumption of electricity
and district heating; the emissions linked to elec-
tricity were calculated based on a location and
market-based approach. Location based emis-
sions were calculated by taking into account, for
each country, the factors referred to in the most
recent version of Table 49 – Primary socio-eco-
nomic and energy indicators published by Terna
(Italian grid operator), in the International Com-
parison section, based on the most recent Ener-
data data, namely the 2019 version. In the event
a country was not listed in the above table, we
used the emission factor for the continent.
When there were several branches in several
countries, the highest of the emissions factors
among these countries was used.
• With regard to the market- based emissions,
when available, the residual mixes found in the
De’Longhi Group
|
02 Report on operations 84
GRI Content Index
Statement of use
The De’ Longhi S.p.A. Group reported the following disclosures in the GRI Content Index for the reporting period 01/01/2023 - 31/12/2023, using the GRI
Standard method “with reference to”
GRI 1 used GRI 1: Foundation 2021
GRI Standard Disclosures Location
GRI 2: General disclosures
2-1 Organizational details 42-43
2-2 Entities included in the organization’s sustainability reporting 42-43
2-3 Reporting period, frequency and contact point 84
2-4 Restatements of information (*)
2-5 External assurance 156
2-6 Activities, value chain and other business relationships 42-43
2-7 Employees 60
2-8 Workers who are not employees 60
2-9 Structure and composition of the governance 61
2-29 Approach to stakeholder engagement 44
GRI 3: Material Topics 2021
3-1 Process to determine material topics 79-80
3-2 List of material topics 79-80
3-3 Management of material topics 79-80
Ethics and business integrity
GRI 3: Material Topics 2021 3-3 Management of material topics 79-80
GRI 205: Anticorruption 2016
205-2 Communication and training relative to anticorruption laws and procedures 55
205-3 Confirmed incidents of corruption and actions taken 54
Management of GHG emissions and the fight against climate change
GRI 3: Material Topics 2021 3-3 Management of material topics 79-80
GRI 302: Energy 2016
302-1 Energy consumption inside the organization 75
302-3 Energy intensity 75
GRI 305: Emissions 2016
305-1 Direct greenhouse gas (GHG) emissions (Scope 1) 76
305-2 Indirect GHG emissions from the consumption of energy (Scope 2) 76
De’Longhi Group
|
02 Report on operations 85
GRI Standard Disclosures Location
Waste management and circular economy
GRI 3: Material Topics 2021 3-3 Management of material topics 79-80
GRI 306: Waste 2020
306-3 Waste generated 77-78
306-4 Waste diverted from disposal 77-78
306-5 Waste directed to disposal 77-78
Responsible supply chain management
GRI 3: Material Topics 2021 3-3 Management of material topics 79-80
GRI 308: Environmental assessment of suppliers 2016 308-1 New suppliers screened using environmental criteria 72
GRI 414: Social assessment of suppliers 2016 414-1 New suppliers screened using social criteria 72
Worker health and safety
GRI 3: Material Topics 2021 3-3 Management of material topics 78-79
GRI 403: Occupational health and safety 2018 403-9 Work related injuries 62-63
Talent attraction and development
GRI 3: Material Topics 2021 3-3 Management of material topics 78-79
GRI 404: Training and education 2016 404-1 Average number of training hours per year per employee 57, 61
Inclusion and equal opportunities
GRI 3: Material Topics 2021 3-3 Management of material topics 78-79
GRI 405: Diversity and equal opportunity 2016 405-1 Diversity of governance bodies and employees 61
GRI 406: Non discrimination 2016 406-1 Incidents of discrimination and corrective actions taken 55
Product safety and labeling
GRI 3: Material Topics 2021 3-3 Management of material topics 78-79
GRI 416: Customer health and safety 2016 416-1 Assessment of the health and safety impacts of products and service categories 64
GRI 417: Marketing and labeling 2016
417-2 Incidents of non- compliance involving labeling, as well as product and services disclosures 66
417-3 Incidents of non-compliance concerning marketing communications 69
Use of consumer data
GRI 3: Material Topics 2021 3-3 Management of material topics 78-79
GRI 418: Customer privacy 2016 418-1 Substantiated complaints regarding violations of customer privacy and loss of their data 69
De’Longhi Group
|
02 Report on operations 86
GRI Standard Disclosures Location
Non-GRI Material Topics
Respect of human rights
GRI 3: Material Topics 2021 3-3 Management of material topics 70-71, 78-80
Innovation and eco-design
GRI 3: Material Topics 2021 3-3 Management of material topics 74-75, 79-80
Promotion of sustainable lifestyles
GRI 3: Material Topics 2021 3-3 Management of material topics 66, 79-80
Consumer satisfaction
GRI 3: Material Topics 2021 3-3 Management of material topics 6-69, 80
De’Longhi Group
|
02 Report on operations 87
Subsequent events
After 31 December 2023 through the date on which
this annual report was approved, no events oc-
curred that would have had a significant impact on
the financial and economic results recorded, as per
IAS 10 - Events after the reporting period.
On 27 February 2024 the Group finalized the agree-
ments for a business combination between Ever-
sys (a leading company in the production and dis-
tribution of automatic coffee machines) and La
Marzocco (a leading company in the production
and distribution of semi-automatic coffee ma-
chines and coffee grinders).
With this transaction, La Marzocco and Eversys will
be able to create synergies and cross-selling oppor-
tunities, to further strengthen their position along the
entire value chain, from research and engineering to
production and market development, while creating
a global player able to effectively compete in a lead-
ership position in different market segments, such
as automatic machines, traditional machines and
luxury household, offering a variety and complemen-
tary of products, technologies and brands.
The deal is in line with the Group’s strategic guide-
lines, which see the further consolidation of its
leadership in the world of coffee and the expansion
of its presence in the professional channel.
The transaction can be classified as a “transaction
between related parties of greater importance”, due
to the fact that De’ Longhi S.p.A. and La Marzocco
International LLC are subject to the common con-
trol of De Longhi Industrial S.A..
As such, the transaction received the prior favora-
ble opinion of the Indipendent Committee, respon-
sible for transactions with related parties of greater
importance and the unanimous vote of the Board
of Directors of De’ Longhi S.p.A., with the absten-
tion of the President Giuseppe de’ Longhi and the
Directors Fabio de’ Longhi and Silvia de’ Longhi, in
compliance with the provisions of the legislation
and regulations regarding related parties.
The transaction involved the creation of a new cor-
porate structure controlled by De’ Longhi S.p.A.,
with the related contribution of Eversys, the acqui-
sition by De’ Longhi S.p.A. of shares (directly and/or
indirectly held) of La Marzocco International LLC
from De Longhi Industrial S.A. and from minority
shareholders, for approximately 41.2% of the share
capital. The remaining shares of La Marzocco were
also contributed to the new corporate structure by
the shareholders.
Due to the finalization on 27 February 2024 of the
transaction on the basis of preliminary results for
Eversys and La Marzocco, while still being audited,
De’ Longhi Group owns approximately 61.6% of the
new entity, alongside minority stakes held by De
Longhi Industrial S.A. (26.5% approximately) and the
previous minority shareholders of La Marzocco
(12%). The total net cash disbursement by De’
Longhi Group was approximately US$373 million, in-
cluding US$ 200 million in favour of De Longhi In-
dustrial S.A. (for the 22% share of La Marzocco) and
US$ 173 million for the purchase of shares from La
Marzocco’s minority shareholders (for the 19.1%
share of La Marzocco).
This amount was entirely covered by the own re-
sources of De’ Longhi Group.
The transaction did not have any impact on the De’
Longhi Group’s consolidated results reported in the
present Annual financial report, except for some
consulting and advisory costs related to the
combination.
De’Longhi Group
|
02 Report on operations 88
Outlook
The Group’s recent improvement in growth and
profitability dynamics leads us to foresee a revenue
growth in 2024, which includes the perimeter ex-
pansion with the business combination between
La Marzocco and Eversys. In terms of margins, it is
expected an improvement of the EBITDA before
non recurring items for the new perimeter.
Treviso, 12 March 2024
For the Board of Directors
Vice President and Chief Executive Officer
Fabio de’Longhi
Consolidated financial statements:
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of cash flows
Consolidated statement of changes in net equity
Group annual report
and financial
statements
De’Longhi Group
|
03 Group annual report and financial statements 90
(€/000) Notes 2023
of which operative
non-recurring
2022
of which operative
non-recurring
Revenue from contracts with customers 1 3,043,086 3,126,940
Other revenues 1 32,818 31,493
Total consolidated revenues 3,075,904 3,158,433
Raw and ancillary materials, consumables and goods 2 (1,301,454) (1,194,715)
Change in inventories of finished products and work in progress 3-8 (23,588) 753 (235,736) 1,924
Change in inventories of raw and ancillary materials, consumables and goods 3 (10,800) 5,519
Materials consumed (1,335,842) 753 (1,424,932) 1,924
Payroll costs 4-8 (393,246) (1,036) (356,710) 500
Services and other operating expenses 5-8-15 (885,207) (4,727) (987,496) (1,432)
Provisions 6-8 (23,790) (492) (19,919) 7,258
Amortization 7-15 (108,191) (105,838)
EBIT 329,628 (5,502) 263,538 8,250
Net financial income (expenses) 9-15 (2,330) (25,341)
Profit (loss) before taxes 327,298 238,197
Taxes 10 (76,886) (58,354)
Consolidated profit (loss) 250,412 179,843
Profit (loss) pertaining to minority 31 35 2,415
Consolidated profit (loss) after taxes 250,377 177,428
Earnings per share (in Euro) 32
- basic € 1.67 € 1.18
- diluted € 1.65 € 1.16
Appendix 3 reports the effect of related party transactions on the income statement, as required by CONSOB Resolution 15519 of 27 July 2006.
Consolidated Income
Statement
De’Longhi Group
|
03 Group annual report and financial statements 91
(€/000) 2023 2022
Consolidated profit (loss) 250,412 179,843
Other components of the comprehensive income:
Change in fair value of cash flow hedges (614)
(3,893)
Tax effect on change in fair value of cash flow hedges 376 525
Differences from translating foreign companies' financial statements into Euro (33,384) 28,483
Total other comprehensive income will subsequently be reclassified to profit (loss) for the year (33,622) 25,115
Actuarial valuation funds (3,801) 11,087
Tax effect of actuarial valuation funds 830 (2,970)
Total other comprehensive income will not subsequently be reclassified to profit (loss) for the year (2,971) 8,117
Total components of comprehensive income (36,593) 33,232
Total comprehensive income 213,819 213,075
Total comprehensive income attributable to:
Group 213,755 210,819
Minority interest 64
2,256
Consolidated statement of
comprehensive income
De’Longhi Group
|
03 Group annual report and financial statements 92
ASSETS
(€/000)
Notes 31.12.2023 31.12.2022
Non-current assets
Intangible assets 878,330 891,181
- Goodwill 11 371,686 373,754
- Other intangible assets 12 506,644 517,427
Property, plant and equipment 477,981 446,899
- Land, property, plant and machinery 13 226,757 210,818
- Other tangible assets 14 154,799 158,071
- Right of use assets 15 96,425 78,010
Equity investments and other financial assets 131,725 136,336
- Equity investments 16 4,294 6,103
- Receivables 17 5,400 5,609
- Other non-current financial assets 18 122,031 124,624
Deferred tax assets 19 60,413 64,634
Total non-current assets 1,548,449 1,539,050
Current assets
Inventories 20 504,678 550,659
Trade receivables 21 272,692 278,811
Current tax assets 22 20,244 15,512
Other receivables 23 43,695 29,884
Current financial receivables and assets 24-15 172,472 368,354
Cash and cash equivalents 25 1,250,198 770,247
Total current assets 2,263,979 2,013,467
Non-current assets held for sale 26 -
1,189
Total assets 3,812,428 3,553,706
Appendix 3 reports the effect of related party transactions on the balance sheet, as required by CONSOB Resolution 15519 of 27 July 2006.
Consolidated statement
of financial position
De’Longhi Group
|
03 Group annual report and financial statements 93
Consolidated statement
of financial position
Net equity and liabilities
€/000
Notes 31.12.2023 31.12.2022
Net equity
Group portion of net equity 1,811,139 1,659,117
- Share Capital 29 226,590 226,590
- Reserves 30 1,334,172 1,255,099
- Profit (loss) pertaining to the Group 250,377 177,428
Minority interest 31 - 4,274
Total net equity 1,811,139 1,663,391
Non-current liabilities
Financial payables 593,079 773,968
- Banks loans and borrowings (long-term portion) 33 300,844 477,582
- Other financial payables (long-term portion) 34 214,617 236,026
- Lease liabilities (long-term portion) 15 77,618 60,360
Deferred tax liabilities 19 72,164 83,254
Non-current provisions for contingencies and other charges 122,918 110,699
- Employee benefits 35 51,041 38,532
- Other provisions 36 71,877 72,167
Total non-current liabilities 788,161 967,921
Current liabilities
Trade payables 37 716,238 540,687
Financial payables 289,022 190,476
- Banks loans and borrowings (short-term portion) 33 196,005 91,510
- Other financial payables (short-term portion) 34 72,012 78,502
- Lease liabilities (short-term portion) 15 21,005 20,464
Current tax liabilities 38 70,571 76,264
Other payables 39 137,297 114,967
Total current liabilities 1,213,128 922,394
Total net equity and liabilities 3,812,428 3,553,706
Appendix 3 reports the effect of related party transactions on the balance sheet, as required by CONSOB Resolution 15519 of 27 July 2006.
De’Longhi Group
|
03 Group annual report and financial statements 94
Consolidated statement of cash flow
(€/000) Notes 2023 2022
Profit (loss) pertaining to the Group 250,377 177,428
Income taxes for the period 76,886 58,354
Amortization 108,191 105,838
Net change in provisions and other non-cash items 10,851 (1,661)
Cash flow generated by current operations (A) 446,305 339,959
Change in assets and liabilities for the period:
Trade receivables 2,369 103,352
Inventories 34,553 230,225
Trade payables 186,920 (417,726)
Other changes in net working capital 11,740 203
Payment of income taxes (97,555) (104,086)
Cash flow generated (absorbed) by movements in working capital (B) 138,027 (188,032)
Cash flow generated by current operations and movements in working capital (A+B) 584,332 151,927
Investment activities:
Investments in intangible assets (18,670) (15,282)
Other cash flows for intangible assets - -
Investments in property, plant and equipment (76,632) (113,638)
Other cash flows for property, plant and equipment 1,933 522
Net investments in financial assets and in minority interest 1,147 (890)
Cash flow absorbed by ordinary investment activities (C) (92,222) (129,288)
Cash flow by operating activities (A+B+C) 492,110 22,639
FX effect on cash and cash equivalents (15,473) 26,428
Exercise of stock option 5,101 3,355
Dividends paid (72,429) (124,637)
New loans - 200,000
Payment of interests on loans (22,327) (6,334)
Repayment of loans and other net changes in sources of finance 92,934 (379,700)
Increase of minority interest 35 2,415
Cash flow generated (absorbed) by changes in net equity and by financing activities (D) (12,159) (278,473)
Cash flow for the period (A+B+C+D) 479,951 (255,834)
Opening cash and cash equivalents 25 770,247 1,026,081
Cash flow for the period (A+B+C+D) 479,951 (255,834)
Closing cash and cash equivalents 25 1,250,198 770,247
Appendix 2 reports the statement of cash flows in terms of net financial position.
De’Longhi Group
|
03 Group annual report and financial statements 95
Consolidated statement
of changes in net equity
(€/000)
Share
capital
Share
Premium
Reserve
Legal
reserve
Extraordi-
nary reserve
Treasury
shares
reserves
Fair value
and cash
flow hedge
reserves
Stock
option
reserve
Currency
translation
reserve
Profit
(loss)
carried
forward
Profit (loss)
pertaining to
group
Group
portion of
net equity
Minority
interest
Total net
equity
Balance at 31 December 2021 226,344 34,300 45,168 188,113 (14,534) 3,865 8,488 45,638 720,097 311,098 1,568,577 2,018 1,570,595
Allocation of 2021 result as per AGM
resolution of 20 april 2022
- distribution of dividends (17,503) (106,998) (124,501) (124,501)
- allocation to reserves 101 310,997 (311,098) - -
Fair value stock option 867 867 867
Exercise/cancellation of stock option 246 3,968 2,123 (2,982) 3,355 3,355
Movements from transactions with
shareholders
246 3,968 101 (15,380) - - (2,115) - 203,999 (311,098) (120,279) - (120,279)
Profit (loss) after taxes 177,428 177,428 2,415 179,843
Other components of comprehensive
income
(3,368) 28,642 8,117 33,391 (159) 33,232
Comprehensive income (loss) - - - - - (3,368) - 28,642 8,117 177,428 210,819 2,256 213,075
Balance at 31 December 2022 226,590 38,268 45,269 172,733 (14,534) 497 6,373 74,280 932,213 177,428 1,659,117 4,274 1,663,391
Balance at 31 December 2022 226,590 38,268 45,269 172,733 (14,534) 497 6,373 74,280 932,213 177,428 1,659,117 4,274 1,663,391
Allocation of 2022 result as per AGM
resolution of 21 April 2023
- distribution of dividends (72,079) (72,079) (72,079)
- allocation to reserves 49 28,680 148,699 (177,428) - -
Fair value stock option 907 907 907
Exercise of stock option 1,810 4,876 (1,585) 5,101 5,101
Other changes in minority interests 4,338 4,338 (4,338) -
Movements from transactions with
shareholders
- 1,810 49 28,680 4,876 - (678) - 80,958 (177,428) (61,733) (4,338) (66,071)
Profit (loss) after taxes 250,377 250,377 35 250,412
Other components of comprehensive
income
(238) (33,413) (2,971) (36,622) 29 (36,593)
Comprehensive income (loss) - - - - - (238) - (33,413) (2,971) 250,377 213,755 64 213,819
Balance at 31 December 2023 226,590 40,078 45,318 201,413 (9,658) 259 5,695 40,867 1,010,200 250,377 1,811,139 - 1,811,139
Explanatory notes
Group annual report
and financial
statements
De’Longhi Group
|
03 Group annual report and financial statements 97
Explanatory notes
Group business
This document represents the consolidated finan-
cial statements of the De’ Longhi Group.
The parent company De’ Longhi S.p.A. is a joint-
stock company, incorporated in Italy, whose shares
are listed on the Italian stock exchange (Euronext
Milan) run by Borsa Italiana.
The registered office is located in Treviso (Italy) in
via Lodovico Seitz, 47.
The Group operates in Europe, America, Asia Pacif-
ic and MEIA.
The Group is active in the production and distribu-
tion of coffee machines, small appliances for food
preparation and cooking, domestic cleaning and
ironing, air conditioning and portable heaters.
The companies included in the scope of consolida-
tion are listed in Appendix 1 to the Explanatory
notes.
Accounting standards
The De’Longhi Group’s consolidated financial state-
ments at 31 December 2023 have been prepared
on the basis of the international accounting and fi-
nancial reporting standards issued by the Interna-
tional Accounting Standards Board (IASB), includ-
ing the SIC and IFRIC interpretations, as endorsed
by the European Commission (at the date of 31 De-
cember 2023), pursuant to EC Regulation 1606 of
19 July 2002.
The following documents have been used for inter-
pretation and application purposes even though not
endorsed by the European Commission:
• Framework for the Preparation and Presentation
of Financial Statements of the International Ac-
counting Standards Board (issued by the IASB in
2001);
• Implementation Guidance, Basis for Conclu-
sions, IFRIC and other documents issued by the
IASB or IFRIC to complement the accounting
standards;
• Interpretations published by the Italian Account-
ing Board relating to how to apply IAS/IFRS in
Italy.
The accounting policies and measurement bases
used for preparing the financial statements at 31
December 2023 are the same as those used for
preparing the consolidated financial statements at
31 December 2022, except for certain new amend-
ments and accounting standards described below.
The consolidated financial statements at 31 De-
cember 2023 comprise the income statement, the
statement of comprehensive income, the state-
ment of financial position, the statement of cash
flows, the statement of changes in net equity and
these explanatory notes.
The statement of financial position has been pre-
pared on a basis that distinguishes between cur-
rent and non-current items.
The income statement has been presented on the
basis of the nature of expense, being a suitable
structure for faithfully representing the Group’s
performance.
The statement of cash flows has been prepared
using the “indirect method” allowed by IAS 7.
The present financial statements and notes are
presented in Euro, with all amounts rounded to
thousands of Euro, unless otherwise indicated.
The financial statements used for consolidation
purposes are the separate ones for the year ended
31 December 2023 prepared by the Boards of Di-
rectors, or other Corporate bodies, of the individual
companies, as adjusted if necessary for the Group’s
accounting policies and measurement bases.
The financial statements have been prepared on
the historical cost basis, adjusted as required for
the valuation of certain financial instruments.
It have been prepared also under the assumption of
going concern. Even though the unpredictability of
the potential impact of the war in Ukraine and the
inflationary tensions, the Group, in light of its finan-
cial strength and the actions taken to limit risks and
its business model, believes that there are no ele-
ments which could compromise the business as a
going concern as per paragraph 25 of IAS 1.
The risks and uncertainties relating to the business
are described in a specific section of the Report on
operations.
The methods used by the Group to manage finan-
cial risks are described in note 43. Risk manage-
ment of the present Explanatory notes.
The present annual financial report have been
issued in the ESEF format (European Single Elec-
tronic Format); it was approved and authorized for
publication by the Board of Directors on 12 March
2024.
International accounting standards adopted
by the Group for the first time
With Regulation 2036/2021 of 19 November 2021
(and subsequent Regulations 1491/2022 of 8 Sep-
tember 2022 and 1083/2023 of 13 August 2023)
the European Commission adopted IFRS 17 - Insur-
ance contracts which will substitute IFRS 4. The
new standard, which establishes rules for the rec-
ognition, measurement, presentation and disclo-
sure of insurance contracts, will be applied to all in-
surance contracts issued by an entity (with limited
exceptions). The new provisions did not impact this
consolidated annual report.
Regulation 357/2022 of 2 March 2022, introduced
a few amendments to IAS 1 - Presentation of finan-
cial statement and to IAS 8 - Accounting Policies,
Changes in Accounting Estimates and Errors in
order to improve the disclosure of accounting poli-
cies and provide investors and other primary users
of the financial statements with more useful infor-
mation, as well as help companies to distinguish
the changes in accounting estimates from the
changes in accounting policy. These changes did
De’Longhi Group
|
03 Group annual report and financial statements 98
not impact the measurement or presentation of el-
ements in this annual report.
In Regulation 1392/2022 of 11 August 2022, the
European Commission introduced amendments to
Deferred Tax related to Assets and Liabilities arising
from a Single Transaction - Amendments to IAS 12
in order to clarify the accounting of deferred tax
recognized in particular circumstances such as, for
example, in the case of leasing and decommission-
ing obligations. These amendments clarify that a
temporary difference deriving from recognition of
an asset and a liability is not exempt from IAS 12
application if the transaction results in differences
in taxable income and deductibles of the same
amount. The application of the Amendments to IAS
12 did not impact this consolidated annual report, it
only increases the mandatory disclosure related to
the recognition of deferred tax assets and liabilities
in specific cases like leasing; for further informa-
tion refer to note 19. Deferred tax assets and liabili-
ties found in these explanatory notes.
International financial reporting standards
and/or not yet applicable
On 22 December 2022 “Council Directive (EU)
2022/2523 on ensuring a global minimum level of
taxation for multinational enterprise groups and
large-scale domestic groups in the Union” was pub-
lished in the Gazzetta Ufficiale. The Directive was
endorsed by member states by year-end 2023, as
part of a coordinated effort, in accordance with the
different domestic tax regimes.
At the same time, the IASB launched a project to
revise IAS 12 which resulted in the publication of an
amendment, namely “International Tax Reform -
Pillar 2 Model Rules”.
The two documents are part of an ongoing debate
about the reform of the international tax system
undertaken by the Organization for Economic Co-
operation and Development (OECD). The reform
calls for a solution based on the two pillars (the
two-pillar solution). Pillar 1 focuses on a tax model
which aims to reexamine the traditional concepts
of “residence” and “jurisdiction”. Pillar 2 aims to
limit tax arbitrage in the allocation of income by im-
posing a minimum tax rate of 15% % (Global an-
ti-Base Erosion Rules, GloBE) on multinational
companies.
The Amendment to IAS12 introduces a temporary
exception to recognition of deferred taxes connect-
ed to the application of Pillar 2.
More in detail, the amendment introduces:
• a temporary exception to the accounting for de-
ferred taxes arising from the jurisdictional imple-
mentation of the global tax measures. This helps
to guarantee consistency in financial reports,
while also facilitating implementation of the
rules; and
• specific disclosure requirements for affected en-
tities to help users of the financial statements
better understand an entity’s exposure to income
taxes arising from the reform, particularly before
its effective date.
The amendment is applicable as of the year begin-
ning 1 January 2023 (but not for interim periods
which close by 31 December 2023).
The Group applied the temporary exception to the
accounting of deferred assets called for in IAS 12;
consequently, information regarding the deferred
tax assets and liabilities relating to Pillar 2 income
tax was not recorded nor reported.
The Group also carried out a preliminary
assessment based on the provisions of the Transi-
tional CbCR Safe Harbour (TSH) and other guide-
lines which are currently available.
Toward this end, this preliminary assessment
needs to be confirmed in light of the interpretations
and clarifications that OECD, union and/or domes-
tic legislatures issue and/or publish in the future.
As the assessment was merely a preliminary over-
view, the concrete impact that Pillar 2 might have
had on the Group’s results, if it had been effective
for the year ending 31 December 2023, could have
been significantly different.
The Group continues to assess the impact that the
law on Pillar 2 income tax will have on its future
results.
With Regulation 2579/2023 of 20 November 2023
the European Commission introduced amend-
ments to IFRS 16 - Leases which clarify how to ac-
count for sale and leaseback transactions.
Regulation 2822/2023 of 19 December 2023 intro-
duced amendments to IAS 1 - Presentation of finan-
cial statement which aim to improve disclosure
when the right to defer settlement of a liability for at
least twelve months is subject to a covenant.
In both instances, the new provisions are applica-
ble as from 1 January 2024.
The reporting standards and/or interpretations not
yet endorsed by the European Union include
amendments to IAS 1 - Presentation of financial
statements which aim to clarify how an entity
should classify debt and other financial liabilities as
current or non-current, and the amendments to IAS
7 and IFRS 7 which expand disclosures relative to
supplier finance agreements.
Consolidation procedures
The scope of consolidation includes the parent
company, De’ Longhi S.p.A., and its subsidiaries at
31 December 2023, meaning those companies in
which the parent directly or indirectly owns the ma-
jority of share capital or shares with voting rights,
or over which the parent has the power, including
through contractual agreements, to govern their fi-
nancial and operating policies
Subsidiary companies
These are companies over which the Group exer-
cises control. Such control exists when the Group
has the power, directly or indirectly, to govern the fi-
nancial and operating policies of an enterprise so
as to obtain benefits from its activities. The finan-
cial statements of subsidiaries are consolidated
starting from the date that control is assumed with
the line-by-line method.
The portion of equity and results attributable to mi-
nority shareholders is shown separately in the con-
solidated statement of financial position and
income statement respectively.
The Group determines whether a transaction is a
business combination by applying the definition
which requires that the assets acquired and liabili-
ties assumed constitute a business. A business is
an integrated set of activities and assets that can
provide a return to investors in the form of divi-
dends, interests or other economic benefits. A busi-
ness activity includes factors and processes, which
together contribute to the generation of an output.
In accordance with IFRS 3, business combinations
are accounted for using the acquisition method.
Under this method, the consideration transferred
De’Longhi Group
|
03 Group annual report and financial statements 99
for the acquisition is measured at fair value except
for the following items which are measured in ac-
cordance with the applicable standard: i) deferred
tax assets and liabilities, ii) assets and liabilities for
employee benefits and iii) assets held for sale. In
the case in which it is only possible to estimate pro-
visionally the fair value of assets, liabilities and po-
tential liabilities, the business combination is ac-
counted for on the basis of provisional estimated
values. Any subsequent corrections required fol-
lowing completion of the valuation process are ac-
counted for within 12 months of the acquisition
date.
If an element of the consideration depends on the
outcome of future events, such element is included
in the estimate of fair value at the time of the busi-
ness combination.
The acquisition of further shares in subsidiaries
and any sale of shares which do not lead to loss of
control are accounted for as transactions between
shareholders; as such, the accounting effects of
such operations are reflected directly in the Group
equity.
Associated companies
These are companies in which the Group has a sig-
nificant influence over their financial and operating
policies and which are neither subsidiaries nor joint
ventures. The consolidated financial statements
show the Group’s portion of results of the associat-
ed companies, accounted for using the equity
method, starting from the date when the significant
influence began.
Joint ventures
These are companies over whose activities the
Group has joint control, as established by contract.
The consolidated financial statements include the
Group’s share of the results of joint ventures, report-
ed using the equity method as per IAS 28 - Invest-
ment in associates and joint ventures amended.
Transactions eliminated upon consolidation
Nella preparazione del bilancio consolidato sono
eliminati tutti i saldi e le operazioni tra società del
Gruppo, così come gli utili e le perdite non realizzati
su operazioni infragruppo.
Consolidation of foreign companies
All the assets and liabilities of foreign companies
that report in a currency other than the Euro and
which fall within the scope of consolidation are
translated into Euro using the exchange rate ruling
at the end of the reporting period (current exchange
rate method). Income and costs are translated
using average rates for the reporting period. The
exchange differences arising from this method are
booked directly to the “currency translation reserve”
under consolidated net equity.
Transactions in foreign currency
Transactions in foreign currency are recorded at
the exchange rate in force on the transaction date.
Monetary assets and liabilities in foreign currency
are translated using the exchange rate ruling on the
reporting date. Exchange differences arising on the
extinguishment of monetary items or their transla-
tion at different rates to those used for their transla-
tion upon initial recognition or in previous financial
statements are recorded in the income statement.
Exchange differences arising on monetary items
that are effectively part of the Group’s net invest-
ment in foreign operations are classified in net
equity until the investment’s disposal, at which time
such differences are recognized in the income
statement as income or expenses.
De’Longhi Group
|
03 Group annual report and financial statements 100
Translation of balances in foreign currencies
The following exchange rates have been used:
31.12.2023 31.12.2022 % Change Period-end Aver age Period-end Aver age Period-end Aver age exchange rate (*)exchange rate (*)exchange rate (*)exchange rate (*)exchange rate (*)exchange rate (*)US dollar USD 1.1050 1.0813 1.0666 1.0530 3.60% 2.69%British pound GBP 0.8691 0.8698 0.8869 0.8528 (2.02%) 2.00%Hong K ong dollar HKD 8.6314 8.4650 8.3163 8.2451 3.79% 2.67%Chinese r enminbi (Yuan) CNY 7.8509 7.6600 7.3582 7.0788 6.70% 8.21%Australian dollar AU D 1.6263 1.6288 1.5693 1.5167 3.63% 7.39%Canadian dollar CAD 1.4642 1.4595 1.4440 1.3695 1.40% 6.57%Japanese yen JPY 156.3300 151.9903 140.6600 138.0274 11.14% 10.12%Malaysian ringgit MYR 5.0775 4.9320 4.6984 4.6279 8.07% 6.57%New Z ealand dollar NZD 1.7504 1.7622 1.6798 1.6582 4.20% 6.27%Polish zloty PLN 4.3395 4.5420 4.6808 4.6861 (7.29%) (3.08%)South African rand ZAR 20.3477 19.9551 18.0986 17.2086 12.43% 15.96%Singapore dollar SGD 1.4591 1.4523 1.4300 1.4512 2.03% 0.08%Russian r ouble RUB 99.1919 92.2731 75.6553 72.3709 31.11% 27.50%T urkish lir a TRY 32.6531 25.7597 19.9649 17.4088 63.55% 47.97%Czech koruna CZK 24.7240 24.0043 24.1160 24.5659 2.52% (2.29%)Swiss fr anc CHF 0.9260 0.9718 0.9847 1.0047 (5.96%) (3.27%)Brazilian real BRL 5.3618 5.4010 5.6386 5.4399 (4.91%) (0.72%)Croatian kuna HRK 7.5345 7.5345 7.5365 7.5349 (0.03%) (0.01%)Ukrainian hryvnia UAH 41.9960 39.5400 39.0370 34.0249 7.58% 16.21%Romanian leu RON 4.9756 4.9467 4.9495 4.9313 0.53% 0.31%South K orean won KRW 1,433.6600 1,412.8800 1,344.0900 1,358.0700 6.66% 4.04%Chilean peso CLP 977.0700 908.2000 913.8200 917.8300 6.92% (1.05%)Hungarian forint HUF 382.8000 381.8527 400.8700 391.2865 (4.51%) (2.41%)Swedish kr ona SEK 11.0960 11.4788 11.1218 10.6296 (0.23%) 7.99%Mexican peso MXN 18.7231 19.1830 20.8560 21.1869 (10.23%) (9.46%)T enge Kazakistan KZT 502.4800 493.5700 492.9000 485.5900 1.94% 1.64%
(*) Source: Bank of Italy. Source for RUB period-end and average exchange rate of December 2023: Central Bank of Russia.
De’Longhi Group
|
03 Group annual report and financial statements 101
Main accounting policies
Intangible assets
Goodwill
Business combinations, whereby control of a com-
pany/entity is acquired, are accounted for in ac-
cordance with the purchase method, meaning that
the assets and liabilities acquired are initially meas-
ured at their market value on the acquisition date.
The difference between the cost of acquisition and
the Group’s share of net assets acquired is attribut-
ed to specific assets and liabilities to the extent of
their acquisition date fair value; any remaining dif-
ference is allocated to goodwill, if positive, and to
the income statement if negative. The cost of ac-
quisition is determined on the basis of the acquisi-
tion date fair value of the assets transferred, the lia-
bilities assumed, the equity instruments issued and
any other related amount.
Goodwill is not amortized but tested for impair-
ment once a year or more often if specific events or
changed circumstances indicate that its value may
have been impaired. This procedure is in accord-
ance with IAS 36 - Impairment of assets. After initial
recognition, goodwill is carried at cost less any ac-
cumulated impairment losses.
Research and development costs
Developments costs for the production of new prod-
ucts or parts are recognized as assets only if the
costs can be reliably determined, the Group has the
intention and resources to complete them, the tech-
nical feasibility of completing them is such that they
will be available for use, and the expected volumes
and prices indicate that the costs incurred for devel-
opment will generate future economic benefits.
Capitalized development costs include only those
expenses that can be directly attributed to the devel-
opment process.
Capitalized development costs are amortized on a
systematic basis, starting from the commencement
of production and lasting the length of the product or
process’s estimated life, generally ranging between
three and five years. All other development costs are
expensed to the income statement as incurred.
Research costs are also expensed to the income
statement as incurred.
Trademarks
These are costs of long-term benefit incurred for
the protection and dissemination of the Group’s
trademarks. Such costs are recognized as an asset
when, in accordance with IAS 38 - Intangible assets,
it is probable that the future economic benefits at-
tributable to the asset’s use will flow to the Group
and when its cost can be reliably measured.
These assets are valued at purchase or production
cost and amortized, if they have a finite life, on a
straight-line basis over their estimated useful life,
generally between 10 and 20 years.
Trademarks with an indefinite useful life are not
amortized but tested for impairment once a year or
more often, any time there are signs that their value
might be impaired.
Other intangible assets
Other intangible assets purchased or internally
generated are recognized as assets in accordance
with IAS 38 - Intangible assets, when it is probable
that the future economic benefits attributable to
their use will flow to the Group and when the cost
of the asset can be reliably measured.
These assets are valued at purchase or production
cost and amortized, if they have a finite life, on a
straight-line basis over their estimated useful life,
generally between 10 and 20 years.
Property, plant and equipment
Land, property, plant and machinery
Buildings, plant and equipment owned by the Group
are recorded at purchase or production cost and
systematically depreciated over their residual
useful lives. The land pertaining to buildings is not
depreciated. The cost of assets qualifying for capi-
talization also includes the borrowing costs directly
attributable to the acquisition, construction or pro-
duction of the asset itself.
Subsequent expenditure is capitalized only if it in-
creases the future economic benefits flowing to the
enterprise.
Ordinary and/or routine maintenance and repair
costs are directly expensed to the income statement
when incurred. Costs relating to the expansion, mod-
ernization or improvement of owned or leased assets
are capitalized to the extent that they qualify for sepa-
rate classification as an asset or part of an asset
under the component approach, whereby every com-
ponent whose useful life and related value can be au-
tonomously assessed must be treated individually.
All other costs are expensed to income as
incurred.
The useful lives, estimated by the Group for its vari-
ous categories of property, plant and equipment,
are as follows:
Industrial buildings 10 - 33 years Plant and machinery 5 - 18 years Industrial and commercial 3 - 5 years equipment Other 3-10 years
Right-of-use assets
In accordance with IFRS 16 the right-of-use asset is
valued as the present value of future payments
(discounted at the interest rate implicit in the lease,
if easily determined, or alternatively, at the incre-
mental borrowing rate, namely the interest rate that
the lessee must pay over the term of the loan and
similar guarantees), the initial costs incurred direct-
ly by the lessee, any advance lease payments made
and the estimate of the costs for elimination, re-
moval and restoration. The asset value is system-
atically depreciated.
Impairment of non-financial assets
The Group tests, at least once a year, whether the
book value of intangible assets and property, plant
and equipment reported in the financial statements
has suffered any impairment loss. If there is evi-
dence of impairment, book value is written down to
the related recoverable amount.
If it is not possible to estimate the recoverable
amount of an individual asset, the Group assesses
whether the cash-generating unit to which it be-
longs is impaired.
De’Longhi Group
|
03 Group annual report and financial statements 102
In the case of goodwill and other intangible assets
with indefinite useful lives, the impairment test
must be carried out at least once a year, and when-
ever there is an indication that an intangible asset
may be impaired.
Net assets held for sale and Discontinued Op-
erations
Net assets and disposal groups are classified as
held for sale or Discontinued Operations if their car-
rying amounts will be recovered principally through
a sale transaction rather than through continuing
use. This condition is regarded as met only when
the sale is highly probable and the non‐current
asset (or disposal group) is available for immediate
sale in its present condition.
When the Group is committed to a sale plan involv-
ing loss of control of a subsidiary, all of the assets
and liabilities of that subsidiary are classified as
held for sale when the criteria described above are
met, regardless of whether the Group will retain a
non‐controlling interest in its former subsidiary
after the sale.
Net assets and disposal groups classified as held
for sale are measured at the lower of their carrying
amounts and fair value less costs to sell.
Inventories
Inventories of raw materials, semi-finished and fin-
ished products are valued at the lower of cost and
market value. Cost is determined using the weight-
ed average cost method. The valuation of
inventories includes the direct cost of materials
and labour as well as indirect (variable and fixed)
costs. Allowances for obsolete and slow-moving
goods are calculated for materials and finished
products, taking account of their future expected
use and realizable value.
Financial instruments
Financial assets
Upon initial recognition, financial assets are classi-
fied based on the measurement methods used in
one of the three categories found in IFRS 9. The
classification depends on the nature of the contrac-
tual cash flows and the business model the com-
pany uses to manage them.
The business model refers to the way in which the
cash flows are generated which can be from the
collection of contractual cash flows, the sale of
assets or both.
A financial asset is classified among the assets
valued at amortized cost if held as part of a business
model where the objective is collecting contractual
cash flows represented solely by payments to be
made on certain dates, principal and interest. The val-
uation is made based on the effective interest rate.
A financial asset is classified among the assets
valued at fair value with changes passing through
the comprehensive income statement if held as
part of a business model where the objective is col-
lecting contractual cash flows and selling the
assets and the cash flows contemplated under the
contract refer solely to payments of principal and
interest made on predetermined dates. For the
assets included in this category, the interest receiv-
able, the foreign exchange differences and losses
in value are recognized in the income statement for
the reporting period; other changes in fair value are
recognized in the comprehensive income state-
ment. Upon elimination, the cumulative change in
fair value recognized as other comprehensive
income is released to the income statement.
During the initial recognition phase, equity instru-
ments may be included in the category of assets
measured at fair value with changes recognized in
the comprehensive income statement.
The category of assets valued at fair value with
changes recognized in the income statement in-
clude assets held for trading, namely acquired to be
sold in the short-term, and the assets designated
as such.
Upon initial recognition, equity instruments not
held for trading may be included in the category of
financial instruments measured at fair value with
changes recognized in the comprehensive income
statement. This choice may be made for each
asset and is irrevocable.
The trade receivables without a significant financ-
ing component are valued at the transaction price
determined in accordance with IFRS 15.
Financial liabilities
Financial liabilities refer mainly to loans valued at
amortized cost based on the effective interest rate.
Financial liabilities are derecognized when the un-
derlying obligation is extinguished, cancelled or
fulfilled.
Lease liabilities
Lease liabilities equal the present value of the pay-
ments payable and not yet paid at the date of the
financial statements discounted at the interest rate
implicit in the lease, if easily determined, or alterna-
tively, at the incremental borrowing rate which is
the rate that the lessee would pay on a loan with a
similar duration and conditions. In the event the
lease term, purchase options, the residual value
guaranteed, or variable payments based on indices
or rates, are redetermined, the lease liability is
remeasured.
Derivatives
Derivatives are used solely for hedging purposes, in
order to reduce exposures to currency and interest
rate risk. As allowed by IFRS9, derivatives may
qualify for special hedge accounting only when, at
the inception of the hedge, the following conditions
are satisfied:
• there is a formal designation that the instrument
is a hedging one;
• there is formal documentation of the hedging re-
lationship, which is expected to be highly
effective;
• the effectiveness of the hedge can be reliably
measured;
• the hedge is highly effective throughout the dif-
ferent financial reporting periods for which it was
designated.
In accordance with IFRS 9, all derivatives are meas-
ured at fair value.
De’Longhi Group
|
03 Group annual report and financial statements 103
If financial instruments qualify for hedge account-
ing, the following treatment applies:
Fair value hedge - If a derivative instrument is des-
ignated as a hedge of the exposure to changes in
the fair value of a recognized asset or liability that is
attributable to a particular risk that will affect profit
or loss, the gain or loss from remeasuring the hedg-
ing instrument at fair value should be recognized in
the income statement. The gain or loss on the
hedged item attributable to the hedged risk adjusts
the carrying amount of the hedged item and is rec-
ognized in the income statement.
Cash flow hedge - If a derivative instrument is desig-
nated as a hedge of the exposure to variability in cash
flows attributable to a highly probable forecasted
transaction which could affect profit or loss, the effec-
tive portion of the gains or losses on the hedging in-
strument is recognized directly in the statement of
comprehensive income. The effective portion of the
cumulative gains or losses is reversed from net equity
and reclassified to profit or loss in the same period in
which the hedged transaction is reported in the
income statement. Gains or losses associated with a
hedge or part thereof that has become ineffective are
reclassified to the income statement. If a hedging in-
strument or hedging relationship is terminated, but
the transaction being hedged has not yet occurred,
the cumulative gains and losses, recorded up until
then in the statement of comprehensive income, are
reported in the income statement at the same time
that the hedged transaction occurs. If the hedged
transaction is no longer expected to occur, the unreal-
ized gains or losses reported directly in net equity are
immediately reclassified to the income statement. If
hedge accounting cannot be applied, the gains or
losses arising from the fair value measurement of the
derivatives are transferred immediately to the income
statement.
Net investment hedge - Hedges of a net invest-
ment in a foreign operation, including a hedge of a
monetary item that is accounted for as part of the
net investment, are accounted for in a way similar
to cash flow hedges. Gains or losses on the hedg-
ing instrument relating to the effective portion of
the hedge are recognized in the statement of com-
prehensive income, while any gains or losses relat-
ing to the ineffective portion are recognized in the
statement of profit or loss. On disposal of the for-
eign operation, the cumulative value of any such
gains or losses recorded in equity is transferred to
the statement of profit or loss.
Factoring of trade receivables
The Group factors some of its trade receivables.
Trade receivables factored without recourse, result-
ing in the substantial transfer of the related risks
and rewards, are derecognized from the financial
statements at the time of their transfer. Receiva-
bles whose factoring does not result in the sub-
stantial transfer of the related risks and rewards,
are retained in the statement of financial position.
The Group has entered an agreement for the fac-
toring of trade receivables, involving the revolving
monthly transfer of a portfolio of trade receivables
without recourse.
The receivables are assigned without recourse to a
bank, which then transfers them to a special pur-
pose entity which finances the purchase of the re-
ceivables by issuing asset-backed securities; the
repayment of these securities, placed on the
market and all subscribed by institutional investors,
as well as the related interest, depends on the cash
flow generated by the portfolio of securitized re-
ceivables. Receivables are sold at their face value,
less a discount that reflects credit risk and the
transaction’s financial costs. The Group acts as
servicer for the special purpose entity.
The contractual terms of this operation involve the
substantial transfer of the risks and rewards relat-
ing to the securitized receivables and their conse-
quent derecognition from the financial statements.
Employee benefits
Pension and other incentive plans
Net obligations relating to employee benefit plans,
chiefly the provision for severance indemnities (for
the portion retained in Group companies) and pen-
sion funds, are recorded at the expected future
value of the benefits that will be received and which
have accrued at the reporting date. The Group’s ob-
ligation to finance defined benefit pension funds
and the annual cost reported in the income state-
ment are determined by independent actuaries
using the projected unit credit method.
Equity based compensation
The Group grants additional benefits to a limited
number of executives and key resources under the
form of stock options. Based on IFRS 2 Share-
based payment, the current value of the stock
option determined on the grant date is recognized
on a straight-line basis in the income statement as
a payroll cost in the period between the grant date
and the date on which the rights granted to employ-
ees, executives and others who routinely provide
services to one or more Group companies parties
fully vest, with a corresponding increase in equity.
At each reporting date the Group will revise estimates
based on the number of options that are expected to
vest, independent of the fair value of the shares. Any
differences with respect to the original estimates will
be recognized in the consolidated income statement
with a corresponding increase in equity.
Once the stock option is exercised, the amounts re-
ceived by the employee, net of transactions costs,
will be credited to the Treasury stock reserve at the
average price of the stocks on hand or, if the treas-
ury stocks are not available, added to the share
capital in the amount of the nominal value of the
shares issued. The remainder will be recognized in
the share premium reserve.
The fair value of the stock options is determined
using the Black-Scholes model which takes into
account the conditions for the exercise of the right,
the current share price, expected volatility, a risk
free interest rate, as well as the non-vesting
conditions.
The fair value of the stock options is included
within the Stock option Reserve.
The dilutive effect of unexercised options will be
reflected in the calculation of the diluted earnings
per share.
Provisions for contingencies and other charges
The Group recognizes provisions for contingencies
and charges when (i) it has a present obligation
De’Longhi Group
|
03 Group annual report and financial statements 104
(legal or constructive) to third parties (ii) it is proba-
ble that the Group will need to employ resources to
settle the obligation and (iii) a reliable estimate can
be made of the amount of the obligation. Changes
in these estimates are reflected in the income
statement in the period in which they occur (also
see the comments in the paragraph on “Estimates
and assumptions”).
Where the effect of the time value of money is ma-
terial and the date of extinguishing the liability can
be reasonably estimated, provisions are stated at
the present value of the expected expenditure,
using a discount rate that reflects current market
assessments of the time value of money and the
risks specific to the liability. An increase in the
amount of the provision for the time value of
money is accounted for in interest expense. Contin-
gencies for which the probability of a liability is not
probable but neither remote are disclosed in the
notes but no provision is recognized.
Recognition of revenues
The item “Revenues” includes the consideration re-
ceived for goods sold to customers and services
rendered.
Revenues represent the consideration owed in ex-
change for the transfer of goods and/or services to
the customer, excluding amounts received on
behalf of third parties. The Group recognizes the
revenue when contractual obligations are fulfilled,
namely when control of the good or service is
transferred to the customer.
Based on the five-step model introduced in IFRS 15,
the Group recognizes revenue after the following
requirements have been met:
a. the parties have approved the contract (in writ-
ing, orally or in accordance with other common
commercial practices) and are committed to
fulfilling the respective performance obliga-
tions; an agreement between the parties which
creates rights and obligations regardless of the
form of the agreement has, therefore, been
created;
b. the rights of each of the parties in relation to the
goods and services to be transferred can be
identified;
c. the payment terms for the goods or services to
be transferred can be identified;
d. the contract has commercial substance;
e. it is probable that the Group will receive the con-
sideration to which it is entitled in exchange for
the goods or services transferred to the
customer.
If the consideration referred to in the contract has a
variable component, the Group will estimate the
amount of the consideration it will be entitled to in
exchange for the goods or services transferred to
the customer.
The Group typically provides warranties for the
repair of defects existing at the time of the sale, in
accordance with the law. These warranties, which
are standard warranties on quality, are accounted
for in accordance with IAS 37 - Provisions, Contin-
gent Liabilities and Contingent Assets.
Costs and expenses
Costs and expenses are accounted for on an accrual
basis.
Dividends
Dividend distributions represent a movement in net
equity in the period in which they are declared by
the shareholders in general meeting.
Dividends received are reported when the Group is
entitled to receive the payment.
Income taxes
Income taxes include all the taxes calculated on the
Group’s taxable income. Income taxes are recorded
in the income statement, except for those relating
to items directly debited or credited to net equity, in
which case the associated tax is recognized direct-
ly in net equity.
Deferred taxes are provided on the basis of global
provision for the liability. They are calculated on all
the temporary differences emerging between the
tax base of an asset or liability and their book value
in the consolidated financial statements, except for
goodwill whose amortization cannot be deducted
for tax purposes and those differences arising from
investments in subsidiaries which are not expected
to reverse in the foreseeable future. Deferred tax
assets on the carryforward of unused tax losses
and tax credits are recognized to the extent that it is
probable that future taxable profit will be available
against which these can be recovered. Current and
deferred tax assets and liabilities may be offset
when the income taxes are charged by the same
tax authority and when there is a legal right of set-
off. Deferred tax assets and liabilities are calculat-
ed at the tax rates that are expected to apply to the
period when the asset is realized or the liability set-
tled, based on tax rates and laws applying in the
countries where the Group operates.
Deferred taxes on reserves of distributable earn-
ings in subsidiaries are recognized only if it is prob-
able that such reserves will be distributed.
Any uncertaintiy regarding tax treatments is con-
sidered in the tax calculation in accordance with
the recommendations of IFRIC 23 Uncertainty over
Income Tax Treatments.
Earnings per share
Basic earnings per share are calculated by dividing
the earnings for the year payable to the parent
company’s ordinary shareholders by the weighted
average number of ordinary shares outstanding
during the period.
The diluted earnings per share are calculated by di-
viding the earnings for the year payable to the
parent company’s ordinary shareholders by the
weighted average number of ordinary shares out-
standing during the period and the shares poten-
tially issued following the exercise of assigned
stock options.
Estimates and assumptions
These financial statements, prepared in accord-
ance with IFRS, contain estimates and assump-
tions made by the Group relating to assets and lia-
bilities, costs, revenues and contingent liabilities at
the reporting date. These estimates are based on
past experience and assumptions considered to be
reasonable and realistic, based on the information
available at the time of making the estimate.
The assumptions relating to these estimates are
periodically reviewed and the related effects re-
flected in the income statement in the same period:
De’Longhi Group
|
03 Group annual report and financial statements 105
actual results could therefore differ from these
estimates.
The following paragraphs discuss the principal as-
sumptions used for estimation purposes and the
principal sources of uncertainty, that have a risk of
causing material adjustment to the book value of
assets and liabilities in the future; details of book
value can be found in the individual explanatory
notes.
Allowance for doubtful accounts
The allowance for doubtful accounts reflects esti-
mated losses on trade receivables recognized in
the financial statements and not covered by insur-
ance. The losses equal the difference between the
amounts the Group is entitled to receive based on
contracts with customers and the estimated
inflows.
Changes in the economic environment could cause
the performance of some of the Group’s customers
to deteriorate, with an impact on the recoverability
of the uninsured portion of trade receivables.
Recoverable amount of non-current assets
The Group reviews all its non-financial assets at
every reporting date for any evidence of
impairment.
Goodwill and other intangible assets with an indefi-
nite useful life are tested annually for impairment.
The recoverable amount of non-current assets is
usually determined with reference to value in use,
being the present value of the future cash flows ex-
pected from an asset’s continuing use. The forecast
cash flows are determined based on the information
available when estimated based on the opinion of
the directors regarding the future performance of
certain variables - such as prices and the
subsequent revenues, costs, increase in demand,
production flows - which are discounted at a risk-ad-
justed rate. The test also involves selecting a suita-
ble discount rate for calculating the present value of
the expected cash flows.
Employee benefits
The cost of defined benefit pension plans is deter-
mined using actuarial valuations, based on statisti-
cal assumptions regarding discount rates, expect-
ed returns on investments, future salary growth
and mortality rates.
The Group believes the rates estimated by its actu-
aries to be reasonable for the year-end valuations,
but cannot rule out that large future changes in
rates could have a material impact on the liabilities
recognized in the financial statements.
Deferred tax assets recoverability
Deferred tax assets include those relating to carry-
forward tax losses to the extent that there is likely
to be sufficient future taxable profit against which
such losses can be recovered.
Management must use their discretion when deter-
mining the amount of deferred tax assets for rec-
ognition in the financial statements. They must es-
timate the likely timing of reversal and the amount
of future taxable profit, as well as the future tax
planning strategy.
Provisions for contingencies
The Group makes several provisions against dis-
putes or risks of various kinds relating to different
matters falling under the jurisdiction of different
countries. The determination, probability and quan-
tification of these liabilities involve estimation pro-
cesses that are often very complex, for which
management uses all the available information at
the date of preparing the financial statements, in-
cluding with the support of legal and tax advisors.
Product warranty provisions
The Group makes provisions for the estimated cost
of product warranties. Management establishes
the amount of these provisions on the basis of past
trends relating to the frequency and average cost
of under-warranty repairs and replacement.
Change in the scope of consolidation
On 18 December 2023 the Group acquired, effec-
tive 1 January 2023, the entire interest of the Swiss
company Ellitec Gmbh, holder of a few patents al-
ready used by the Eversys Group. The group of
assets acquired and the liabilities assumed do not
constitute a business, therefore the transaction is
not considered a business combination and for ac-
counting purposes was treated like the acquisition
of an asset.
Disclosure by operating segments
Please refer to Note 46. Operating segments.
The report on operations contains comments on
the economic results by geographical area.
De’Longhi Group
|
03 Group annual report and financial statements 106
Comments on the income
statement
1. Revenues
In 2023 revenues, including revenues from sales and services and other revenues, amount to €3,075,904
thousand (€3,158,433 thousand in December 2022).
Revenues are broken down by geographical area as follows:
% % 2023 2022 Change Change %revenues revenues Europe 1,907,052 62.0% 1,874,594 59.4% 32,458 1.7%America 547,046 17.8% 623,381 19.7% (76,335) (12.2%)Asia Pacific 447,374 14.5% 463,867 14.7% (16,493) (3.6%)MEIA (Middle East/India/174,432 5.7% 196,591 6.2% (22,159) (11.3%)Africa)T otal 3,075,904 100.0% 3,158,433 100.0% (82,529) (2.6%)
Comments on the most significant changes can be found in the “Markets” section of the report on
operations.
“Other revenues” is broken down as follows:
2023 2022 Change Freight reimbursement 5,101 5,425 (324)Commercial rights 2,128 2,727 (599)Grants and contributions 1,086 1,213 (127)Damages r eimbursed 1,313 836 477 Other income 23,190 21,292 1,898 T otal 32,818 31,493 1,325
With regard to Law n. 124 of 4 August 2017, which regulates transparency in public funding, the item “Grants
and contributions” includes income of €352 thousand stemming from the incentives granted by Gestore dei
Servizi Energetici GSE S.p.A. for the production of energy at the Mignagola (TV) plant through photovoltaic
systems connected to the grid.
2. Raw and ancillary materials, consumables and goods
The breakdown is as follows:
2023 2022 Change Parts 647,925 553,168 94,757 Finished pr oducts 529,618 522,825 6,793 Raw materials 102,411 95,906 6,505 Other pur chases 21,500 22,816 (1,316)T otal 1,301,454 1,194,715 106,739
3. Change in inventories
The difference between the overall change in inventories reported in the income statement and the change
in balances reported in the statement of financial position is mainly due to differences arising on the transla-
tion of foreign subsidiaries financial statements. In 2023, the item includes non-recurring income totalling
€753 thousand due to the updated evaluation of Ukrainian inventories, as consequence of the utilisation of
stock previously written off.
4. Payroll costs
These costs include €133,139 thousand in production-related payroll (€114,136 thousand at 31 December
2022).
2023 2022 Change Employee wages and salaries 368,842 329,987 38,855 T emporary work ers 24,404 26,723 (2,319)T otal 393,246 356,710 36,536
De’Longhi Group
|
03 Group annual report and financial statements 107
In 2023, the item includes non-recurring expense of €1,036 thousand (non-recurring income of €500 thou-
sand in 2022), referring to reorganization of personnel and to the economic impact of the purchase price al-
location of the recent acquisitions.
The figures relating to the cost of employee benefits provided by certain Group companies in Italy and
abroad are reported in note 35. Employee Benefits.
The item includes €907 thousand relating to the notional cost (fair value) of the stock option plan 2020-2027
(€867 thousand at 31 December 2022; please refer to note 28. Stock option plans for more information.
The average size of the Group’s workforce during the year is analyzed as follows:
2023 2022 Blue collars 6,437 5,928 White collars 3,185 3,226 Managers 304 296 T otal 9,926 9,450
5. Services and other operating expenses
These are detailed as follows:
2023 2022 Change Promotional expenses 253,340 262,855 (9,515)Advertising 140,456 163,013 (22,557)T ransport (for pur chases and 133,748 191,023 (57,275)sales)Subcontracted work 45,491 40,278 5,213 Consulting services 41,951 40,241 1,710 T echnical support 28,461 25,413 3,048 Storage and war ehousing 25,390 40,422 (15,032)Rentals and leasing 23,618 31,820 (8,202)Commissions 16,031 17,227 (1,196)Power 14,582 13,951 631 Tra v e l 12,816 10,766 2,050 Insurance 10,747 10,503 244 Product cer tification and 6,498 7,347 (849)product inspection fees Other utilities and cleaning 5,788 5,495 293 fees, security, waste collection Maintenance 5,146 5,078 68 Postage, telegr aph and 4,747 4,948 (201)telephones Directors' emoluments 3,201 4,714 (1,513)Statutory auditors' emoluments 295 301 (6)Other sundry services 55,482 51,220 4,262 T otal services 827,788 926,615 (98,827)Sundry taxes 47,950 50,450 (2,500)Bad debts 364 236 128 Out-of-period losses 212 29 183 Other 8,893 10,166 (1,273)T otal other operating expenses 57,419 60,881 (3,462)T otal 885,207 987,496 (102,289)
De’Longhi Group
|
03 Group annual report and financial statements 108
In 2023 the item includes net non-recurring expenses for €4,727 thousand (net non-recurring expenses of
€1,432 thousand at 31 December 2022).
In 2023 the item “Rentals and leasing” includes €427 thousand in commercial rights (€2,115 thousand in
2022).
In addition, it includes operating costs relating to contracts that are not or do not contain a lease (€20,897
thousand, €26,779 thousand in 2022), as well as costs relating to leases of less than twelve months’ dura-
tion (€1,846 thousand, €2,424 thousand in 2022) or relating to low-value assets (€448 thousand, €502 thou-
sand in 2022); for further information, please refer to note 15. Leases.
6. Provisions
These include €23,320 thousand in provisions for contingencies and other charges and a net increase of
€470 thousand in provision for doubtful accounts. In 2023 the item includes net non-recurring expenses for
€492 thousand related to corporate reorganisation. The main changes in this item are discussed in note
36.Other provisions for non-current contingencies and charges.
7. Amortization
The breakdown is as follows:
2023 2022 Change Amortization of intangible assets 27,550 24,267 3,283 Depreciation of property, plant 57,343 59,047 (1,704)and equipment Depreciation of right of use 23,298 22,524 774 assets T otal 108,191 105,838 2,353
More details about amortization and depreciation can be found in the tables reporting movements in intan-
gible assets and property, plant and equipment.
8. Non-recurring income/(expenses)
In these financial statements, some items of a non-recurring nature resulting in net expenses of €5,502
thousand were shown separately. This item includes the costs for services connected to the La Marzocco/
Eversys business combination and the costs arising from the ongoing reorganization of the company.
Non-recurring income stemming from the revised valuation of stock in Ukraine, with regard specifically to
the use of inventory which had been previously written down and the economic impact of the purchase
price allocation stemming from the acquisitions of Capital Brands and the Eversys Group are also included.
The non-recurring amounts are shown in the income statement, in the corresponding item of the
statement.
9. Net financial income (expenses)
Net financial income and expenses are broken down by nature as follows: 2023 2022 Change Exchange differences and gains (losses) on currency 1,970 (3,250) 5,220 hedges (*)Share of profit of equity investments consolidated by (589) (1,134) 545 the equity method Other expenses on equity - (2,800) 2,800 investments Net inter est income (expense) 4,056 (12,411) 16,467 and FV evaluation Interest for leasing (1,896) (1,573) (323)Other financial income (5,871) (4,173) (1,698)(expenses)Other net financial income (3,711) (18,157) 14,446(expenses)Net financial income (2,330) (25,341) 20,211(expenses) (*) The item includes €56 thousand r elating to ex change rate losses on leases accounted for in accordance with IFRS 16 Leases.
“Exchange differences and gains (losses) on currency hedges” includes the rate differentials on currency
De’Longhi Group
|
03 Group annual report and financial statements 109
risk hedges, as well as the exchange differences linked to consolidation.
“Share of profit of equity investments consolidated by the equity method” includes income from the joint
venture TCL/DL, dedicated to the manufacture of portable air conditioners and the financial expense related
to the investment in NPE S.r.l., a supplier of electronic components.
“Net interest income (expense) and FV evaluation” includes bank interest on the Group’s financial debt (re-
calculated using the amortized cost method, as a result of which interest expense was recognized in ad-
vance of actual payment), the cost of other financial instruments, net of the interest received on the Group’s
investments and temporary losses arising from investments evaluated at fair value through profit and loss.
Interest on leases is equal to the portion of financial expenses payable matured in the reporting period on a
liability, recognized in accordance with IFRS 16 Leases. For more information see note 15.Leases.
“Other financial income (expenses)” include bank charges, financial expenses arising from the actuarial cal-
culation of the long-term employee benefits.
10. Income taxes
These are analyzed as follows:
2023 2022 Change Current income taxes:- Income taxes 78,135 37,975 40,160- IRAP (Italian regional 5,923 2,796 3,127 business tax)Deferred (advanced) tax es (7,172) 17,583 (24,755)T otal 76,886 58,354 18,532
This item includes the estimated tax credit for research and development pursuant to Law 160/2019, as
amended by Law 178/2020 and Law 234/2021, and for new investments in other capital goods pursuant to
Law 178/2020 for the current year.
“Deferred (advanced) taxes” include the taxes calculated on the temporary differences arising between the
accounting values of assets and liabilities and on the corresponding tax base (particularly for taxed provi-
sions recognized by the parent company and its subsidiaries) and on the distributable income of the
subsidiaries.
They also include the benefit arising from the carryforward of unused tax losses which are likely to be used
in the future.
In 2022 this item included the deferred liabilities recognized for €9.8 million stemming from the possible re-
lease of distributable profit reserves of a few Group companies in accordance with Law 197/2022.
Effective as from 1 January 2024, the De’ Longhi Group, a multinational enterprise group which, along with
its direct shareholder, exceeds the threshold of consolidated revenues of at least €750 million for two of the
four previous years, is subject to application of the Pillar 2 income tax called for in Directive 2022/2523,
adopted in Italy with Legislative Decree 209/2023, which aims to ensure a global minimum level of taxation
for multinational enterprise groups and large-scale domestic groups in the European Union.
Based on paragraph 4.A of IAS 12, which provides for a temporary exemption from provisions of this stand-
ard relative to the recognition and reporting of information on deferred assets and liabilities derived from
Pillar 2 application, in this annual report no Pillar 2 deferred tax assets or liabilities were recognized.
The actual and theoretical tax charge are reconciled here below.
As the Pillar 2 rules were not in effect at the closing date of the annual report, no current Pillar 2 taxes were
recognized.
2023 % 2022 %Profit before taxes 327,298 100.0% 238,197 100.0%Theoretical taxes 78,552 24.0% 57,167 24.0%Other (*) (7,589) (2.3%) (1,609) (0.7%)T otal income taxes 70,963 21.7% 55,558 23.3%IRAP (Italian regional business 5,923 1.8% 2,796 1.2%tax)Actual tax es 76,886 23.5% 58,354 24.5%
(*) Mostly refers to the net tax effect of permanent differences, of different tax rates applied abroad relative to the theoretical ones
applied in Italy, of adjustments on prior years taxes.
De’Longhi Group
|
03 Group annual report and financial statements 110
Comments on the statement of
financial position: assets
Non-current assets
11. Goodwill
31.12.2023 31.12.2022 Gross Net Gross Net Goodwill 378,433 371,686 380,501 373,754
The change in “Goodwill” is explained by the translation at 31 December 2023 of goodwill in currency follow-
ing the acquisition of international operations and the disposal of assets included in the cash generating
unit to which goodwill was allocated at the time of the business combination.
Goodwill is not amortized because it is considered to have an indefinite useful life. Instead, it is tested for
impairment at least once a year to identify any evidence of loss in value.
For the purposes of impairment testing, goodwill is allocated to the CGUs (cash generating units), namely
the historic divisions De’Longhi, Kenwood and Braun, as well as the recently acquired Capital Brands and
Eversys, as follows:
Cash-generating unit 31.12.2023 De'Longhi 25,162 Kenwood 17,120 Braun 48,836 Capital Br ands 183,141 Eversys 97,427 T otal 371,686
The objective of the impairment test is to determine the value in use of the CGU to which the goodwill refers,
meaning the present value of the future cash flows expected to be derived from continuous use of the
assets; any cash flows arising from extraordinary events are therefore ignored.
More specifically, value in use is determined by applying the discounted cash flow method to forecast cash
flows contained in plans prepared assuming realistic growth scenarios based on the information available
at the reporting date, including the 2024-2026 plan approved by the Board of Directors, integrated, limited to
specific situations, with updated assumptions considering the possible outcome of some commercial ac-
tions decided after the approval of the plan.
Plan data was projected beyond the explicit planning period, of not more than five years, determined based
on common valuation practices, namely using a perpetuity growth rate that was no higher than those ex-
pected for the markets in which the individual CGUs operate. The growth rate in terminal values used for
projecting beyond the planning period was therefore in a range of 2.2% to 2.6% for the different CGUs,
deemed representative of a precautionary growth rate in terminal values.
The cash flows and discount rate were determined net of tax. Discount rates were calculated using the
Weighted Average Cost of Capital (WACC) obtained from data from a sample of comparable companies.
The discount rates utilized, which vary between 5.5% and 8.4% for the different cash-generating units, there-
fore, reflect the estimated market valuations and the time value of money at the reporting date, as well as
sector risks.
The impairment tests carried out at the end of 2023 have not revealed any other significant evidence of
goodwill impairment.
The recoverable amounts shown in the impairment tests and the sensitivity analysis are much higher than
book value for all the CGUs.
The results obtained using the discounted cash flow method have been tested for their sensitivity to chang-
es in certain key variables, within reasonable ranges and on the basis of mutually consistent assumptions.
The variables altered were the discount rate (between 5.3% and 8.6%) and the growth rate in terminal value
(in the range 2.0%-2.8%).
The estimated recoverable amounts for all the CGUs, however, were higher than book value and the sensitiv-
ity analyses point to relatively stable results; in fact, the minimum and maximum amounts diverged by
around 10% from the central point when both variables were altered.
Group Board of Directors approved the assumptions and the criteria used to perform the impairment tests.
However, estimating CGU recoverable amount requires management to make discretionary judgements
and estimates. In fact, several factors also associated with developments in the difficult market context
could make it necessary to reassess the value of goodwill. The Group will be constantly monitoring those
events and circumstances that might make it necessary to perform new impairment tests.
De’Longhi Group
|
03 Group annual report and financial statements 111
12. Other intangible assets
These are analyzed as follows:
31.12.2023 31.12.2022 Gross Net Gross Net New pr oduct development 152,825 22,681 136,347 19,407 costs Patents 85,162 35,705 77,196 32,152 T rademarks and similar rights 441,475 334,484 443,346 336,579 Work in progress and 22,772 21,552 26,742 25,522 advances Other 135,881 92,222 139,002 103,767 T otal 838,115 506,644 822,633 517,427
The following table reports movements in the main asset categories during 2023:
New Tr ade-Work in product marks and progress Patents Other T otal develop-similar and ment costs rights advances Net opening balance 19,407 32,152 336,579 25,522 103,767 517,427 Additions 2,068 6,057 122 10,204 219 18,670 Amortization (13,204) (4,413) (225) - (8,425) (26,267)T ranslation differences 14,410 1,909 (1,992) (14,174) (3,339) (3,186)and other movements (*)Net closing balance 22,681 35,705 334,484 21,552 92,222 506,644
(*)“Other movements” refers primarily to the reclassification of intangible assets.
The principal additions refer to the capitalization of new product development projects, based on detailed
reporting and analysis of the costs incurred and the estimated future usefulness of such projects.
The Group has capitalized a total of €12,272 thousand in development costs as intangible assets in 2023, of
which €2,068 thousand in “New product development costs” for projects already completed at the reporting
date and €10,204 thousand in “Work in progress and advances” for projects still in progress.
“Patents” mostly refers to the value of industrial patent rights and to costs for developing and integrating
data processing systems. The increase refers primarily to the purchase of patents used in professional
coffee machine segment.
“Trademarks and similar rights” includes a few trademarks calculated based on an indefinite useful life in
accordance with IAS 38, taking into account, above all, brand awareness, economic benefits, reference
market characteristics, brand specific strategies and the amount of investments made to sustain the
brands: €79.8 million for the “De’ Longhi” trademark, €95.0 million for the perpetual license over the “Braun”
brand, €120.0 million for the Nutribullet/MagicBullet trademark, and €39.2 million for the Eversys
trademark.
The impairment test carried out at the end of 2023 for brands with an indefinite useful life, in order to con-
firm the result of the impairment test already conducted to verify the invested capital allocated to each CGU
(described in note 11. Goodwill), did not reveal any evidence that these assets might have suffered an im-
pairment loss.
The method used to test impairment involves discounting to present value the royalties that the Group
would be able to earn from permanently granting third parties the right to use the trademarks in question.
This method, which is based on royalty cash flows and reasonably estimated sales volumes, is the most
commonly used for company valuation purposes since it is able to provide a suitable expression of the rela-
tionship between the strength of the trademark and business profitability.
The discount rates used, which vary between 6.3% and 9.2% net of tax, reflect market valuations and the
time value of money at the reporting date. The growth rate in terminal values used for projecting beyond the
planning period was in a range of 2.2% to 2.6% for the different CGUs, deemed representative of a precau-
tionary growth rate in terminal values.
The cash flows discounted to present value are stated net of tax (in keeping with the discount rate).
The results of the impairment test have been tested for their sensitivity to changes in certain key variables,
within reasonable ranges and on the basis of mutually consistent assumptions. The variables altered were
the discount rate (between 6.1% and 9.4%) and the growth rate in terminal value (in the range 2.0%-2.8%).
The sensitivity analysis using actuarial (changes in the discount and growth rates) revealed relatively stable
results; in fact, the minimum and maximum amounts had a deviation of around 10% when both variables
were changed.
The scenarios modeled for the purposes of the sensitivity test above would, however, result in a decrease in
the present value of the flows over the horizon of the plan, as well as in the terminal value, which could cause
a loss in value for both Braun and Capital Brands, albeit limited to around 5% of their book value.
“Other intangible assets” is explained primarily by the value of the portfolio recognized following allocation
of the purchase price to Capital Brands, subject to amortization based on the estimated useful life.
De’Longhi Group
|
03 Group annual report and financial statements 112
13. Land, property, plant and machinery
These are analyzed as follows:
31.12.2023 31.12.2022 Gross Net Gross Net Land and buildings 219,496 156,781 204,008 147,834 Plant and machinery 186,474 69,976 169,842 62,984 T otal 405,970 226,757 373,850 210,818
The following table reports movements during 2023:
Land and buildings Plant and machinery T otal Net opening balance 147,834 62,984 210,818 Additions 12,273 7,092 19,365 Disposals (1,267) (177) (1,444)Amortization (8,597) (11,566) (20,163)T ranslation diff erences and 6,538 11,643 18,181 other mov ements Net closing balance 156,781 69,976 226,757
The increases and other movements in “Land and Building” relate primarily to investments made in the con-
struction of new buildings at the Treviso headquarters and at the production plant in China.
The investments in “Plants and machinery” refer mainly to increases of the production lines for coffee ma-
chine in Italy and to the purchases of machinery for the plants in Romania. The other movements refer, first
of all, to the reclassification of the amount relating to the investments made in the previous years in the
production plants (in China, Romania) previously classified under tangible assets in progress.
14. Other tangible assets
Other tangible assets are analyzed as follows:
31.12.2023 31.12.2022 Gross Net Gross Net Industrial and commercial 394,534 70,580 383,603 76,200 equipment Other 95,252 21,789 101,575 27,882 Work in progress and 62,430 62,430 53,989 53,989 advances T otal 552,216 154,799 539,167 158,071
The following table reports movements during 2023:
Industrial and Work in commercial Other progress and T otal equipment advances Net opening balance 76,200 27,882 53,989 158,071 Additions 14,248 7,597 35,422 57,267 Disposals (22) (124) - (146)Amortization (27,395) (9,785) - (37,180)T ranslation diff erences and 7,549 (3,781) (26,981) (23,213)other mov ements Net closing balance 70,580 21,789 62,430 154,799
The additions to “Industrial and commercial equipment” refer primarily to the purchase of moulds for the
manufacturing of new products.
The increase in “Work in progress” refers mainly to the improvements at the plants in Swiss, Romania and
China and the development plan for the headquarter offices.
De’Longhi Group
|
03 Group annual report and financial statements 113
15. Leases
Existing leases are functional to the Group’s operations and refer mainly to the leasing of properties, auto-
mobiles and other capital goods.
Movements in the leased right of use assets in 2023 are shown below:
Industrial and Land and Plant and commercial Other T otal buildings machinery equipment Net opening balance 68,629 2,760 2,339 4,282 78,010 Additions 35,984 10 3 5,040 41,037 Disposals (808) - (1) (141) (950)Amortization (19,692) (578) (204) (2,824) (23,298)T ranslation diff erences and 1,690 (49) - (15) 1,626 other mov ements Net closing balance 85,803 2,143 2,137 6,342 96,425
In 2023, the result for the period includes depreciation and amortization for €23,298 thousand, interest pay-
able for €1,896 thousand and exchange gains for €56 thousand, while €24,234 thousand in lease payments
were reversed.
At 31 December 2023 financial liabilities for leases of €98,623 thousand (of which €77,618 thousand expir-
ing beyond 12 months) and financial assets for advanced payments of €220 thousand, included in “Current
financial receivables and assets”, were recognized in the financial statements (please refer to note 24).
The maturities of the undiscounted lease liabilities (based on contractual payments) are shown below:
Undiscounted Payable within Payable in 1-5 Payable in more flows at one year years than five years 31.12.2023 Lease liabilities 105,857 23,195 63,601 19,061
The adoption of IFRS 16 Lease affected Group net equity at 31 December 2023 for €2,771 thousand.
16. Equity investments
Details of equity investments are as follows:
31.12.2023 31.12.2022 Equity investments consolidated using the 4,243 6,052 equity method Investment measur ed at fair value 51 51 T otal 4,294 6,103
“Equity investments consolidated using the equity method” refers to the equity investments subject to joint
control as per contractual agreements and associated companies, accounted for using the equity method
in accordance with IAS 28 - Investments in associates and joint venture.
The changes in 2023 are shown below:
31.12.2023 Net opening balance 6,052 Interest in net pr ofit (589)Exchange rate diff erences (253)Sale of 25% equity investment in NPE S.r.l. (967)Net closing balance 4,243
17. Non-current receivables
The balance at 31 December 2023 of €5,400 thousand refers to security deposits (€5,609 thousand at 31
December 2022).
18. Other non-current financial assets
This item includes investments made as part of the Group’s liquidity management with primary counter-
parts, namely financial assets that will be held until maturity consistent with the business model objective to
receive contractual cash flows (principal and interest) at specific maturities which were, therefore, account-
ed for using the amortized cost method.
The item includes mainly €20,353 thousand relating to two bonds with a total nominal value of €20,000
thousand, maturing in 2026 and 2027, respectively, €101,678 thousand relating to four floating rate notes,
maturing in 2026 and 2027 with semi-annual and quarterly coupons (par value of €100,200 thousand.
No signs of impairment emerged about the balances recognized in the financial statements.
De’Longhi Group
|
03 Group annual report and financial statements 114
19. Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are analyzed as follows:
31.12.2023 31.12.2022 Deferred tax assets 60,413 64,634 Deferred tax liabilities (72,164) (83,254)Net closing balance (11,751) (18,620)
“Deferred tax assets” and “Deferred tax liabilities” include the taxes calculated on temporary differences be-
tween the carrying amount of assets and liabilities and their corresponding tax base (particularly taxed pro-
visions recognized by the parent company and its subsidiaries), the tax effects associated with the alloca-
tion of higher values to fixed assets as a result of allocating consolidation differences based on the
applicable tax rate and the deferred taxes on the distributable income of subsidiaries. Deferred tax assets
are calculated mainly on provisions and consolidation adjustments. They also include the benefit arising
from the carryforward of unused tax losses which are likely to be used in the future.
Leasing and other transactions which upon initial recognition result in taxable and deductible differences of
the same amount include deferred tax assets of €9,006 thousand reported net the deferred tax liabilities of
€8,734 thousand.
The net balance is analyzed as follows:
31.12.2023 31.12.2022 T emporary diff erences (16,536) (27,247)T ax losses 4,785 8,627 Net closing balance (11,751) (18,620)
The change in the net asset balance reflects an increase of €376 thousand through equity recognized in the
“Fair value and cash flow hedge reserve” following the fair value measurement of securities and cash flow
hedges, and an increase of €830 thousand recognized in “Profit (loss) carried forward” relating to the actuar-
ial gains and (losses) recognized in the comprehensive income statement in accordance with IAS 19 - Em-
ployee Benefits.
Exposure to Pillar 2 income tax derives from the level of taxation imposed in the jurisdiction in which the
entities of multinational groups (including any entities subject to joint control) are present; this level of
taxation depends on various factors, such as mainly where the income is generated, the tax rate, the tax
regulations used to calculate taxable income, as well as the form of and entitlement to incentives or other
tax benefits applicable in the jurisdiction.
Furthermore, given the novelty and complexity of determining the effective level of taxation, in the first re-
porting periods in which Pillar 2 will be effective (namely the periods that begin before 31
December and end before 30 June 2028) it will be possible to apply a simplified regime based mainly on the
accounting information available for each relevant jurisdiction (the transitional regime, which provides for
Country-by-Country Reporting - CbCR safe harbors) and based on which - in case at least one of the three
threshold tests is exceeded - compliance costs will be lowered and Pillar 2 taxes will be eliminated.
Taking into account what is known or reasonably estimated at the end of the year, even though this informa-
tion today does not reflect all the provisions of the Pillar 2 legislation connected to the location and opera-
tions of all the Group enterprises in all the individual jurisdictions in which the latter operates, and consider-
ing that at the end of the year all the information might not be available or reasonably estimated, the Group’s
exposure to Pillar 2 income tax at the end of the year, including based on the transitional county-by-country
reporting safe harbor, is deemed insignificant
More specifically, based on the information know or reasonably estimated:
• as the majority of the Group entities are located in jurisdictions which satisfy at least one of the tests
called for under the transitional county-by-country reporting safe harbor, the conditions for application of
the Pillar 2 income tax do not exist, and
• for the remainder of the Group entities, which are located in jurisdictions which do not satisfy any of the
tests called for under the transitional county-by-country reporting safe harbor, the exposure is not signifi-
cant as the taxation in those jurisdictions is near the minimum of 15% or the estimated impact on profit in
these jurisdictions is not material in light of the Group’s total revenues.
The Group, with the support of consultants, is getting organized and preparing for compliance with the Pillar
2 rules, including in order to manage the exposure in subsequent periods by developing adequate systems
and procedures which aim to:
• identify, locate and characterize all the Group enterprises for the purpose of the Pillar 2 rules, and
• carry out the tests called for under the transitional county-by-country reporting safe harbor for each rele-
vant jurisdiction in order to benefit from the reduction in compliance costs and the elimination of Pillar 2
taxes, and
• carry out the complete, detailed calculations of the taxation in any jurisdictions which do not pass any of
the above mentioned test called for Pillar 2.
De’Longhi Group
|
03 Group annual report and financial statements 115
Current assets
20. Inventories
“Inventories”, shown net of an allowance for obsolete and slow-moving goods, can be analyzed as follows:
31.12.2023 31.12.2022 Finished pr oducts and goods 378,890 426,336 Raw, ancillar y and consumable materials 142,747 152,934 Work in progress and semi-finished products 35,431 27,421 Inventory writedown allowance (52,390) (56,032)T otal 504,678 550,659
The value of inventories is stated after deducting an allowance for obsolete or slow-moving goods totaling
€52,390 thousand (€56,032 thousand at 31 December 2022) in relation to products and raw materials that
are obsolete and slow-moving or are no longer of strategic interest to the Group.
21. Trade receivables
These are analyzed as follows:
31.12.2023 31.12.2022 T rade r eceivables- due within 12 months 283,483 289,402- due beyond 12 months - -Allowance for doubtful accounts (10,791) (10,591)T otal 272,692 278,811
Trade receivables are stated net of an allowance for doubtful accounts of €10,791 thousand, representing a
reasonable estimate of the expected losses during the entire life of the receivables. The allowance takes
account of the fact that a significant portion of the receivables are covered by insurance policies with major
insurers.
Movements in the allowance for doubtful accounts are shown in the following table:
Tr anslation Provisions/31.12.2022 differences and 31.12.2023 Releases other movements Allowance for 10,591 470 (270) 10,791 doubtful accounts
The change in the allowance for doubtful accounts refers to provisions for expected losses net utilization
during the year to cover bad debt for which provisions had already been made.
The Group has received guarantees from customers as collateral against trade balances; in addition, a sig-
nificant portion of the receivables are covered by insurance policies with major insurers. More details can be
found in note 43. Risk management.
In accordance with the disclosure required by Consob Circular 3369 of 9 April 1997, we report that the total
amount of receivables factored without recourse and outstanding at 31 December 2023 is €199,680 thou-
sand (€186,814 thousand at 31 December 2022). The total amount of receivables factored by the Group
(turnover) during 2023 (under Law 52/1991 known as the Factoring Law) was €809,397 thousand (€797,712
thousand during 2022).
22. Current tax assets
These are analyzed as follows:
31.12.2023 31.12.2022 Direct tax receivables 14,125 10,240 T ax pa yments on account 5,552 2,894 T ax r efunds requested 567 2,378 T otal 20,244 15,512
There are no current tax assets due beyond 12 months.
De’Longhi Group
|
03 Group annual report and financial statements 116
23. Other receivables
“Other r eceivables” are analyzed as follows: 31.12.2023 31.12.2022 VAT 16,708 6,282 Advances to suppliers 6,444 3,843 Other tax receivables 3,933 1,732 Prepaid insurance costs 4,504 3,931 Employees 207 308 Other 11,899 13,788 T otal 43,695 29,884
This item includes other receivables due beyond 12 months of €1 thousand (€6 thousand at 31 December
2022).
24. Current financial receivables and assets
“Current financial receivables and assets” are analyzed as follows:
31.12.2023 31.12.2022 Fair value of derivatives 12,507 11,691 Advances for leasing contr acts 220 317 Fair value of other current financial assets 68,163 87,666 Other curr ent financial assets 91,582 268,680 T otal 172,472 368,354
More details on the fair value of derivatives can be found in note 43. Risk management.
“Other current financial assets” includes the amount of investments made as part of liquidity management
valued at amortized cost.
25. Cash and cash equivalents
This balance consists of surplus liquidity on bank current accounts and other cash equivalents, mostly relat-
ing to customer payments received at period end and temporary cash surpluses.
Some of the Group’s foreign companies have a total of €72.1 million in cash on bank accounts held at the
same bank. These cash balances form part of the international cash pooling system and are partially offset
by €65.8 million in overdrafts held at the same bank by other foreign companies. This bank therefore acts as
a “clearing house” for the Group’s positive and negative cash balances. Considering the substance of the
transactions and technical workings of the international cash pooling system, the positive and negative
cash balances have been netted against one another in the consolidated statement of financial position, as
permitted by IAS 32.
The cash balances at 31 December 2023 include €4 thousand in current accounts of certain subsidiaries,
that are restricted, having been given as collateral.
26. Non-current assets held for sale
As of 31 December 2022, the item referred to the value of a freehold property of a subsidiary classified as
non-current assets available for sale, as required by IFRS 5 - Non-current assets held for sale and discontin-
ued operations, as there was an ongoing programme aimed at divestment that ended in January 2023 with
the registration of the sale of the property and its appurtenances.
From the sale, the Group realised a capital gain of € 457 thousand classified among “Other income”.
De’Longhi Group
|
03 Group annual report and financial statements 117
Comments on the statement of financial
position: net equity and liabilities
Net equity
The primary objective of the Group’s capital man-
agement is to maintain a solid credit rating and ad-
equate capital ratios in order to support its busi-
ness and maximize value for shareholders.
On 21 April 2023 the Shareholders’ Meeting of De’
Longhi S.p.A. resolved to distribute a total of
€72,079 thousand as dividends, fully paid during
2023.
Movements in the equity accounts are reported in
one of the earlier schedules forming part of the fi-
nancial statements; comments on the main com-
ponents and their changes are provided below.
27. Treasury shares
At 31 December 2023 the Group, through the
parent company De’ Longhi S.p.A., held 595,000
treasury shares for a total of €9,658 thousand, pur-
chased in previous years; the change with respect
to 31 December 2022 (De’ Longhi S.p.A. held
€895,350 for a countervalue of €14,534 thousand)
is due to the exercise of 300,350 options in connec-
tion with the “2020-2027 Stock Option Plan”.
During the Shareholders’ Meeting held on 21 April
2023, shareholders approved the renewal - after re-
voking the previous authorization granted by share-
holders - of the authorization to purchase and sell
treasury shares for up to a maximum of 14.5 mil-
lion ordinary shares or an amount which does not
exceed one fifth of the share capital, including any
shares held by the Company or any of its subsidiar-
ies. The buyback program was approved, in accord-
ance with the law, for a period of up to a maximum
of 18 months (namely through 21 October 2024).
28. Stock option plans
At 31 December 2023 a share-based incentive plan
approved during De’ Longhi S.p.A.’s Annual General
Meeting held on 22 April 2020, the “Stock Option
Plan 2020-2027”, was in place.
In the face of the plan, the Shareholders’ Meeting
decided on a further increase in the share capital of
nominal maximums Euro 4,500,000 to be carried out
through the 3,000,000 ordinary shares, with a nomi-
nal value of Euro 1.5 each having the same charac-
teristics as ordinary shares outstanding on the date
of issue, with regular enjoyment, intended, if the
shares in the portfolio do not were capacious.
The aim of the plan is to encourage the loyalty of
the beneficiaries, encouraging their stay in the
Group, linking their remuneration to the implemen-
tation of the company strategy in the medium to
long term.
The overall duration of the plan is about 8 years and
in any case the deadline is set for 31 December
2027.
The identification of individual beneficiaries is left
to the Board of Directors on a proposal from the
Remuneration and Appointments Committee or
the Ceo of the Parent Company De’ Longhi S.p.A.,
after hearing the Board of Statutory Auditors on the
basis of their respective competences.
The allocation of option is free of charge: benefi-
ciaries are therefore not required to pay any consid-
eration for the grant of options. On the contrary, the
exercise of options and the consequent subscrip-
tion of shares are subject to the payment of the ex-
ercise price.
Each option entitles you to subscribe to an action,
under the conditions laid down in the Rules of Pro-
cedure. The strike price will be equal to the arithme-
tic average of the official prices recorded by the
Company’s shares on the Electronic Stock Market
organized and managed by Borsa Italiana S.p.A. in
the 180 days off the calendar before the approval
date of the Plan 2020-2027 and its regulation by
the Shareholders’ Meeting. This criterion allows a
reference to be made of a period of time which, al-
though not close to the time at which the issue
price of the shares is determined, is long enough to
mitigate the stock market price data from the vola-
tility phenomena resulting from the crisis related to
the spread of coronavirus.
The exercise of the options can be carried out by
the beneficiaries - in one or more tranches - only
and e.g.in the period of operation, including:
• 15 May 2023 and 31 December 2027, for a maxi-
mum number of 50% of the total options allocat-
ed to each beneficiary, without prejudice to the
suspension periods described in Article 12 of the
Regulation;
De’Longhi Group
|
03 Group annual report and financial statements 118
• 15 May 2024 and 31 December 2027, for the remaining 50% of the total options assigned to each benefi-
ciary, without prejudice to the suspension periods described in Article 12 of the Regulation.
The options not exercised by the by the end of the exercise period, shall in any event be forfeited without the
beneficiary being entitled to any indemnity or compensation whatsoever.
The shares will have regular enjoyment and therefore equal to that of the other shares outstanding on the
date of their issue and will be freely available and therefore freely transferable by the beneficiary. Please refer
to the Annual report on remuneration policy and the remuneration paid for more information.
At 31 December 2022 stock options on 1,560,000 shares had been assigned; during the year the total fell to
1,089,650 shares as a result of the resignation of one of the eligible persons and for the exercise of a total of
300,350 options.
For the purposes of assessing the plan under IFRS 2 - Share-based Payment, two different tranches have
been identified, corresponding to a number of options evenly distributed over the two operating periods
provided for in the plan. The result is a fair value different unit for each individual tranche.
The fair value of the stock option is the value of the option on the assignment date determined by applying
the Black-Scholes Model, which takes into account the conditions of exercise of the right, the current value
of the share, the expected volatility, the risk-free rate and considering the non-vesting conditions.
Volatility was estimated with the help of data provided by a provider market information and corresponds to
the estimate of stock volatility over the period covered by the plan.
The fair value of the options assigned on the date of this Report and the assumptions made for its evalua-
tion are as follows:
Award (05.04.2020) Award (05.14.2020) Award (05.15.2020) Award (05.20.2020) Award (11.05.2020)First tr anche fair value 4.4283 4.591 4.4598 4.4637 12.402 Second tr anche fair value 4.3798 4.536 4.4034 4.4049 12.0305 Expected dividends (Euro) 2.80% 2.80% 2.80% 2.80% 2.80%Estimated v olatility (%) 35.00% 34.00% 33.00% 32.00% 28.00%Historic volatility (%) 37.00% 37.00% 37.00% 37.00% 37.00%Market interest r ate (0.2%) (0.2%) (0.2%) (0.2%) (0.2%)Expected lif e of the options (years) 7.7 7.7 7.7 7.7 7.7 Exercise price (Euro) 16.982 16.982 16.982 16.982 16.982
De’Longhi Group
|
03 Group annual report and financial statements 119
29. Share capital
The share capital at 31 December 2023 comprises 151,060,000 ordinary shares with a par value of €1.5 for
a total of €226,590 thousand.
30. Reserves
The details are as follows:
31.12.2023 31.12.2022 Change Share premium reserve 40,078 38,268 1,810 Legal r eserve 45,318 45,269 49 Other r eserves:- Extr aordinary reserve 201,413 172,733 28,680- F air value and cash flow hedge reserve 259 497 (238)- St ock option r eserve 5,695 6,373 (678)- Reserve for treasury shares (9,658) (14,534) 4,876- Curr ency translation reserve 40,867 74,280 (33,413)- Pr ofit (loss) carried forward 1,010,200 932,213 77,987 T otal 1,334,172 1,255,099 79,073
The “Share premium reserve” was set up following the public offering at the time of the parent company’s
listing on the Milan stock exchange on 23 July 2001 which and subsequently reduced following the demerg-
er transaction in favour of DeLclima S.p.A.. At 31 December 2022 it amounted to €38,268 thousand after the
exercise of options assigned pursuant to the 2016-2022 Stock Option Plan.
During 2023 the reserve was increased to €40,078 thousand as a result of the exercise of 300,350 options of
the “2020-2027 Stock Option Plan” for a countervalue of € 1,810 thousand.
The “Legal Reserve” amounted to €45,269 thousand at 31 December 2022. The increase of €49 thousand is
attributable to the allocation of profit for 2022 approved by shareholders during De’ Longhi S.p.A.’s AGM held
on 21 April 2023.
The extraordinary reserve increased by € 28,680 thousand following the allocation of the 2022 result re-
solved by the Shareholders’ Meeting of De’ Longhi S.p.A. on 21 April 2023.
The “Fair value and cash flow hedge reserve” reports a positive balance of €259 thousand, net of €155 thou-
sand in tax.
The change in the “Fair value and cash flow hedge” reserve in 2023, recognized in the statement of compre-
hensive income for the year, is attributable to the negative fair value of the cash flow hedge and availa-
ble-for-sale securities of €614 thousand net of €376 thousand in tax.
The “Stock Option Reserve” at 31 December 2023 refers to the share-based incentive plan “Stock Option
Plan 2020-2027” already described in note 28. Stock Option Plans.
The “Stock Option Reserve” amounted to positive €5,695 thousand, which corresponds to the fair value of
the options at the assignment date, recognized on a straight-line basis from the grant date through vesting.
During the year, € 907 thousand were accrued because of the fair value valuation of outstanding options net
of exercises during the year and the cancellation of options because of the change in the number of
holders.
The “Reserve for treasury shares” is negative for an amount of € 9,658 thousand and represents the securi-
ties countervalue of 595,000 treasury shares purchased under the buy-back programme. The change com-
pared to 31 December 2022 refers to the utilisation of the treasury stock portfolio to cover the exercise of
300,350 options under the ‘2020-2027 Stock Option Plan’.
“Profit (loss) carried forward” includes the retained earnings of the consolidated companies and the effects
of consolidation adjustments and adjustments to comply with Group accounting policies.
Below is a reconciliation between the net equity and profit reported by the parent company, De’ Longhi S.p.A.,
and the figures shown in the consolidated financial statements:
Net equity Profit for Net equity Profit for 31.12.2023 2023 31.12.2022 2022 De' Longhi S.p.A. financial 557,569 36,578 588,531 100,808 statements Share of subsidiaries' equity and results for period attributable to the 834,186 218,905 649,687 59,442 Group, after deducting carrying value of the investments Allocation of goodwill arising on consolidation and related amortization 464,525 (444) 465,679 5,308 and r eversal of goodwill recognized for statutory purposes Elimination of intercompany pr ofits (45,425) (4,613) (40,820) 14,286 Other adjustments 284 (14) 314 (1)Consolidated financial statements 1,811,139 250,412 1,663,391 179,843 Minority - 35 4,274 2,415 Consolidated financial 1,811,139 250,377 1,659,117 177,428 statements-Group por tion
De’Longhi Group
|
03 Group annual report and financial statements 120
31. Minorities’ portion of net equity
The minorities’ portion of net equity which amounted to € 4,274 thousand as of 31 December 2022, referred
to the minority interest (49%) in the company Eversys UK Ltd. and its subsidiary Eversys Ireland Ltd., which
became part of the Group as a result of the Eversys acquisition. The change relates to the finalization of the
purchase of the minority share in 2023.
32. Earnings per share
Earnings per share are calculated by dividing the earnings for the year by the weighted average number of
the Company’s shares outstanding during the period.
31.12.2023 Weighted average number of shares outstanding 150,248,220 Weighted average number of diluted shares outstanding 151,568,623
The dilutive impact was not significant at 31 December 2023, therefore, the difference between the diluted
earnings per share (€1.65) and the basic earnings per share (€1.67) is not material.
De’Longhi Group
|
03 Group annual report and financial statements 121
Liabilities
33. Bank loans and borrowings
“Bank loans and borrowings” are analyzed as follows:
Payable within one year Payable in 1-5 years Balance 31.12.2023 Payable within one y ear Payable in 1-5 years Balance 31.12.2022 Overdr afts 16,394 - 16,394 3,592 - 3,592 Current bank loans and borrowings - - - 4 - 4 Long- term loans (short term por tion) 179,611 - 179,611 87,914 - 87,914 Bank loans and borrowings (short‐term portion) 196,005 - 196,005 91,510 - 91,510 Long- term loans - 300,844 300,844 - 477,582 477,582 T otal banks loans and borrowings 196,005 300,844 496,849 91,510 477,582 569,092
This item does not include amounts due beyond 5 years.
No new loans were taken out in 2023.
In regard to current bank loans (already described in prior annual reports), none of the financial covenants
included in the loan agreements, based on net debt/equity and net debt/ EBITDA had been breached at 31
December 2023.
Most of the bank debt is floating rate; as a result of the hedge on one of the medium/long-term loans, the
floating rate debt was swapped for fixed rate debt. The fair value of the loans, calculated by discounting
future interest flows at current market rates, does not differ significantly from the amount of debt recog-
nized in the financial statements.
34. Other financial payables
This balance, inclusive of the current portion, is made up as follows:
31.12.2023 31.12.2022 Private placement (short‐term portion) 21,397 21,409 Negative fair value of derivatives 13,170 12,206 Other short term financial pay ables 37,445 44,887 T otal short‐term payables 72,012 78,502 Private placement (one t o five years) 64,259 85,709 Negative fair value of derivatives - - Other financial payables (one to five years) - - T otal long‐term pay ables (one t o five years) 64,259 85,709 Private placement (beyond five years) 150,358 150,317 T otal long‐term pay ables (beyond five years) 150,358 150,317 T otal other financial payables 286,629 314,528
De’Longhi Group
|
03 Group annual report and financial statements 122
The bond loan refers to the issue and placement of €150 million in unsecured, non-convertible notes with
US institutional investors (the “US Private Placement”) completed in 2017 and an additional €150 million
placed in 2021.
In both instances the securities were issued in a single tranche by De’ Longhi S.p.A.
The first issue matures in 10 years, in June 2027, and has an average life of 7 years. The notes will accrue
interest from the subscription date at a fixed rate of 1.65% per annum. The notes will be repaid yearly in
equal instalments beginning June 2021 and ending June 2027, without prejudice to the Company’s ability to
repay the entire amount in advance.
The second issue matures in 20 years, in April 2041, and has an average life of 15 years. The notes will
accrue interest from the subscription date at a fixed rate of 1.18% per annum. The notes will be repaid yearly
in equal instalments beginning April 2031 and ending April 2041, without prejudice to the Company’s ability
to repay the entire amount in advance.
Both issues are unrated and are not intended to be listed on any regulated markets.
The issues are subject to half-yearly financial covenants consistent with those applied to other loans. At 31
December 2023 the covenants had not been breached. Neither issue is secured by collateral of any kind.
“Negative fair value of derivatives” refers to hedges on interest rates and currencies, foreign currency receiv-
ables and payables, as well as on future revenue streams (anticipatory hedges).
“Other short term financial payables” refers mainly to factoring without recours related payables.
Net financial position
Details of the net financial position are as follows:
31.12.2023 31.12.2022 A. Cash 1,250,198 770,247 B. Cash equivalents - - C. Other current financial assets 159,965 356,663 of which lease prepayments 220 317 D. Cash, cash equiv alents and other current financial assets 1,410,163 1,126,910 (A + B + C)E. Curr ent financial liabilities (96,241) (78,682)of which lease liabilities (21,005) (20,464)F. Current por tion of non‐current financial liabilities (179,611) (87,914)G. Curr ent financial liabilities (E + F) (275,852) (166,596)H. Curr ent net financial liabilities (D + G) 1,134,311 960,314 I.1. Other non-current financial assets 122,031 122,604 I. Non-curr ent financial liabilities (378,462) (537,942)of which lease liabilities (77,618) (60,360)J. Debt instruments (214,617) (236,026)K. Tr ade pay ables and other non-current liabilities - - L. Non-curr ent net financial liabilities (I + I.1+ J + K) (471,048) (651,364)M. T otal financial liabilities (H + L) 663,263 308,950 Fair value of derivatives and other financial non-bank assets/(663) (10,169)liabilities T otal net financial position 662,600 298,781
Details of the net financial position are shown in accordance with CONSOB Bulletin DEM/6064293 of 28.07.2006; in order to provide
a better representation, “Other non-current financial assets” are indicated separately in letter I.1 “Other non-current financial assets”;
for further information, see note 18.
For a better understanding of changes in the Group’s net financial position, reference should be made to the
full consolidated statement of cash flows, appended to these explanatory notes, and the condensed state-
ment presented in the report on operations.
More details on the fair value of derivatives can be found in note 43. Risk management.
Details of financial receivables and payables with related parties are reported in Appendix 3.
De’Longhi Group
|
03 Group annual report and financial statements 123
35. Employee benefits
These are made up as follows:
31.12.2023 31.12.2022 Provision for sever ance indemnities 7,988 8,040 Defined benefit plans 21,659 17,768 Other long term benefits 21,394 12,724 T otal 51,041 38,532
The provision for severance indemnities includes amounts payable to employees of the Group’s Italian com-
panies and not transferred to supplementary pension schemes or the pension fund set up by INPS (Italy’s
national social security agency). This provision has been classified as a defined benefit plan, governed as
such by IAS 19 ‐ Employee benefits.
Some of the Group’s foreign companies provide defined benefit plans for their employees.
Some of these plans have assets servicing them, but severance indemnities, as an unfunded obligation, do
not.
These plans are valued on an actuarial basis to express the present value of the benefit payable at the end of
service that employees have accrued at the reporting date.
The amounts of the obligations and assets to which they refer are set out below:
Provision for severance indemnities:
Movements in the year are summarized below:
Net cost charged t o income 2023 2022 Change Current service cost 378 186 192 Interest cost on defined benefit obligation 66 86 (20)T otal 444 272 172
Change in present v alue of obligations 31.12.2023 31.12.2022 Change Present value at 1 January 8,040 9,901 (1,861)Current service cost 378 186 192 Utilization of provision (643) (1,032) 389 Interest cost on obligation 66 86 (20)Actuarial gains & losses recognized in the 147 (1,101) 1,248 comprehensive income statement Present value at reporting date 7,988 8,040 (52)
Defined benefit plans:
Movements in the year are as follows:
Net cost charged t o income 2023 2022 Change Current service cost 1,435 1,389 46 Return on plan assets (285) - (285)Interest cost on obligation 766 256 510 T otal 1,916 1,645 271 Change in present v alue of obligations 31.12.2023 31.12.2022 Change Present value at 1 January 17,768 27,103 (9,335)Net cost charged t o income 1,916 1,645 271 Benefits paid (1,501) (1,140) (361)T ranslation diff erences (178) 146 (324)Actuarial gains & losses recognized in the 3,654 (9,986) 13,640 comprehensive income statement Present value at reporting date 21,659 17,768 3,891
The outstanding liability at 31 December 2023 21,659 of €thousand (€ 17,768 thousand at 31 December
2022) refers to a few subsidiaries (mainly in Germany, Japan and Swiss).
De’Longhi Group
|
03 Group annual report and financial statements 124
The assumptions used for determining the obligations under the plans described are as follows: Severance Severance Other plans Other plans Assumptions used indemnity 2023 indemnity 2022 2023 2022 Discount r ate 3.20% 3.70% 1,25%-3,6% 0,5% - 3,7%Future salary increases 2,0%-3,0% 2,3%-3,3% 0,0%-3% 0,0% - 3%Inflation r ate 2.00% 2.30% 0,0% - 2,1% 0,0% - 2,2%
“Other medium/long-term benefits” includes the amount accrued for the incentive plan 2021-2023 in the re-
porting period of €21,394 thousand. This plan was approved by the Board of Directors for a limited number
of the Group’s key resources.
For more information, please refer to the Annual Remuneration Report.
36. Other provisions for non-current contingencies and charges
These are analyzed as follows:
31.12.2023 31.12.2022 Agents’ lea ving indemnity pr ovision 2,121 2,022 Product warranty pr ovision 43,512 42,744 Provision for contingencies and other char ges 26,244 27,401 T otal 71,877 72,167
Movements are as follows:
Tr anslation difference and 31.12.2022 Utilization Net accrual 31.12.2023 other movements Agents’ lea ving indemnity 2,022 (242) 341 2,121 provision Product warranty 42,744 (21,105) 21,814 59 43,512 provision Provision for contingencies and 27,401 (2,343) 1,165 21 26,244 other charges T otal 72,167 (23,690) 23,320 80 71,877
The agents’ leaving indemnity provision covers the payments that might be due to departing agents in ac-
cordance with art. 1751 of the Italian Civil Code, as applied by collective compensation agreements in force.
The product warranty provision has been established for certain consolidated companies, on the basis of
estimated under‐warranty repair and replacement costs for sales taking place by 31 December 2023. It
takes account of the provisions of Decree 24/2002 and of European Community law.
The “Provision for contingencies and other charges” includes the provision of €15,965 thousand (€15,730
thousand at 31 December 2022) for legal disputes and product complaint liabilities (limited to the Group’s
insurance deductible), the provision of € 10,278 thousand (€11,761 thousand at 31 December 2022) for the
provisions made by a few subsidiaries relating to commercial risks and other charges.
On 23 February 2023 the French Competition Authority (the “FCA”) notified a few Group companies of a
complaint filed by a French company (and other French sector companies, mentioned in the complaint)
which refers to certain acts that occurred between 2009 and 2014 which were allegedly in violation of rules
governing anti-competitive conduct.
More specifically, the complaint alleges that the Group entered into horizontal agreements which consisted
in the exchange between competitors of privileged information relating to small appliances in France in the
period referred to above.
The French Competition Authority concluded that the practice of exchanging information, to the extent that
it restricted market competition, constitutes an anticompetitive agreement prohibited by the Art. 420-1 of
the French Commercial Code and Art. 101, paragraph 1, TFUE.
The complaint is currently being analyzed carefully by the Group which is preparing its defense with the
support of premiere legal counsel and sector consultants. It is not yet possible to assess the possibility or
the size of any sanctions. The Group believes that there are sound arguments to be made in its defense.
37. Trade payables
The balance represents the amount owed by the Group to third parties for the provision of goods and servic-
es. The item does not include amounts due beyond 12 months.
38. Current tax liabilities
“Current tax liabilities” refers to the Group’s direct tax and, with respect to the Italian subsidiaries who ad-
hered to the Domestic Tax Consolidation regime, the net amount owed the parent company De Longhi In-
dustrial S.A..
The Parent Company De’ Longhi S.p.A. and a few of the Italian subsidiaries renewed, jointly with the
De’Longhi Group
|
03 Group annual report and financial statements 125
consolidator De Longhi Industrial S.A., the option to adhere to group taxation, referred to as “Domestic Tax
Consolidation”, as permitted under articles 117-129 of the Consolidated Income Tax Act (TUIR) as per Pres-
idential Decree n. 917 of 22 December 1986 and Decree of the Ministry and Finance of 1 March 2018, for the
three-year period 2022 - 2024.
For additional information please refer to Appendix.3.
39. Other payables
These are analyzed as follows:
31.12.2023 31.12.2022 Employees 58,644 52,704 Indirect taxes 40,192 27,638 Social security institutions 9,179 7,172 Withholdings pay ables 7,906 6,519 Advances 7,515 8,860 Other tax es 697 1,164 Other 13,164 10,910 T otal 137,297 114,967
The item does not include amounts due beyond 12 months.
40. Commitments
These are detailed as follows:
31.12.2023 31.12.2022 Guarantees given to third par ties 652 773 Other commitments 3,836 11,191 T otal 4,487 11,964
“Other commitments” mainly consist of contractual obligations pertaining to the subsidiaries.
De’Longhi Group
|
03 Group annual report and financial statements 126
41. IFRS 7 classification of financial as-
sets and liabilities
Financial assets and liabilities are classified below
in accordance with IFRS 7 using the categories
identified in IFRS 9.
Assets at 31 dicembre 2023 T otal Amortized cost Fair value in Profit&Loss Fair value in OCI Non-current assets (*)Equity investments 51 - 51 -Receivables 5,400 5,400 - -Other non‐curr ent financial assets 122,031 122,031 - -Current assets (**)T rade r eceivables 272,692 272,692 Current tax assets 20,244 20,244 Other r eceivables 43,695 43,695 Current financial receivables and assets 172,252 91,582 76,066 4,604 Cash and cash equivalents 1,250,198 1,250,198 Liabilities at 31 dicembre 2023 T otal Amortized cost Fair value in Profit&Loss Fair value in OCI Non‐current liabilities (***)Bank loans and borrowings (long‐term portion) 300,844 300,844 - -Other financial payables (long‐term portion) 214,617 214,617 - -Current liabilities (****)T rade pa yables 716,238 716,238 Bank loans and borrowings (short‐term portion) 196,005 196,005 Other financial payables (shor t‐term portion) 72,012 58,842 9,544 3,626 Current tax liabilities 70,571 70,571 - -Other pa yables 137,297 137,297 - -
(*) Interests in subsidiaries. associates and joint ventures are not included (IFRS 9 - 2.1 a).
(**) Advances for leasing contracts are not included (IFRS 9 - 2.1 b).
(***) Lease liabilities under IFRS 16 (IFRS 9.-2.1b) are not included.
(****) Lease liabilities to which IFRS 16 Leases is applied (IFRS 9 - 2.1 b) are not included.
The value of financial assets/liabilities at amortized cost does not differ significantly from their fair value.
De’Longhi Group
|
03 Group annual report and financial statements 127
Assets at 31 dicembre 2022 T otal Amortized cost Fair value in Profit&Loss Fair value in OCI Non-current assets (*)Equity investments 51 - 51 -Receivables 5,609 5,609 - -Other non‐curr ent financial assets 124,624 122,604 2,020 Current assets (**)T rade r eceivables 278,811 278,811 Current tax assets 15,512 15,512 Other r eceivables 29,884 29,884 Current financial receivables and assets 368,037 268,680 90,870 8,487 Cash and cash equivalents 770,247 770,247 Liabilities at 31 dicembre 2022 T otal Amortized cost Fair value in Profit&Loss Fair value in OCI Non‐current liabilities (***)Bank loans and borrowings (long‐term portion) 477,582 477,582 - -Other financial payables (long‐term portion) 236,026 236,026 - -Current liabilities (****)T rade pa yables 540,687 540,687 Bank loans and borrowings (short‐term portion) 91,510 91,510 Other financial payables (shor t‐term portion) 66,902 54,696 6,533 5,673 Current tax liabilities 76,264 76,264 - -Other pa yables 114,967 114,967 - -
(*) Interests in subsidiaries. associates and joint ventures are not included (IFRS 9 - 2.1 a).
(**) Advances for leasing contracts are nor included (IFRS 9 - 2.1 b).
(***) Lease liabilities under IFRS 16 (IFRS 9.-2.1b) and Forward contracts that will result in an acquisition to be considered as a business combination within the scope of IFRS 3 Business combination are
not included (IFRS 9 - 2.1 f).
(****) Lease liabilities to which IFRS 16 Leases is applied (IFRS 9 - 2.1 b) are not included.
The value of financial assets/liabilities at amortized cost does not differ significantly from their fair value.
De’Longhi Group
|
03 Group annual report and financial statements 128
42. Hierarchical levels of financial instruments measured at fair value
The following table presents the hierarchical levels in which the fair value measurements of financial instruments
have been classified at 31 December 2023. As required by IFRS 13, the hierarchy comprises the following levels:
• level 1: quoted prices in active markets for identical assets or liabilities;
• level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly;
• level 3: inputs for the asset or liability that are not based on observable market data.
Financial instruments measured at fair value Level 1 Lev el 2 Level 3 Derivatives with positive fair value - 12,507 - Derivatives with negative fair value - (13,170) - Other financial assets 51 68,163 -
There were no transfers between the levels during the year.
43. Risk management
The Group is exposed to the following financial risks as part of its normal business activity:
• credit risk, arising from commercial activities and from the investment of surplus cash;
• liquidity risk, arising from the need to have adequate access to capital markets and sources of finance to
fund its operations, investment activities and the settlement of financial liabilities;
• exchange rate risk, associated with the significant amount of purchases and sales in currencies other
than the Group’s functional currency;
• interest rate risk, relating to the cost of the Group’s debt.
Credit risk
Credit risk consists of the Group’s exposure to potential losses arising from failure by a counterparty to fulfill
its obligations.
Trade credit risk is associated with the normal conduct of trade and is monitored using formal procedures
for selecting and assessing customers, for defining credit limits, for monitoring expected receipts and for
their recovery if necessary.
Credit risk is mitigated by insurance policies with major insurers, with the aim of insuring against the risk of
default by punctually performing a selection of a portfolio of customers together with the insurer, who then
undertakes to pay an indemnity in the event of default.
Although there is a certain concentration of risk associated with the size of some of the principal buying
groups, this is counterbalanced by the fact that the exposure is spread across counterparties operating in
different geographical areas.
Positions are written down when there is objective evidence that they will be partially or entirely uncollected;
such writedowns are based on past data and information about the counterparty’s solvency, taking account
of insurance and any other guarantees as described above.
The Group’s maximum exposure to credit risk is equal to the book value of trade receivables before the al-
lowance for doubtful accounts, and amounts to €283,483 thousand at 31 December 2023 and €289,403
thousand at 31 December 2022.
This amount corresponds to the gross balance of trade receivables of €348,374 thousand at 31 December
2023 (€351,540 thousand at 31 December 2022), net of deductions and accounting offsets, which reduce
the overall credit risk, mainly in the form of credit notes and other documents not yet issued to customers.
The following analysis of credit risk, carried out on the basis of receivables ageing and the reports used for
credit management, refers to the trade balances before these deductions because the documents still to be
issued cannot be specifically allocated to the ageing categories.
Trade receivables of €348,374 thousand at 31 December 2023 comprise €306,507 thousand in current bal-
ances and €41,867 thousand in past due amounts, of which €38,381 thousand past due within 90 days and
€3,846 thousand past due by more than 90 days.
The amount of insured or guaranteed receivables at 31 December 2023 is €249,284 thousand.
The Group has recognized €10,791 thousand in allowances for doubtful accounts against unguaranteed re-
ceivables of €99,090 thousand.
Trade receivables of €351,340 thousand at 31 December 2022 comprise €316,286 thousand in current bal-
ances and €35,254 thousand in past due amounts, of which €31,757 thousand past due within 90 days and
€3,497thousand past due by more than 90 days.
The amount of insured or guaranteed receivables at 31 December 2022 is €280,439thousand.
The Group has recognized €10,591 thousand in allowances for doubtful accounts against unguaranteed re-
ceivables of €71,101 thousand.
As far as financial risk is concerned, it is the Group’s policy to maintain a sufficiently large portfolio of coun-
terparties of high international repute for the purposes of temporary investment of surplus resources or for
the negotiation of derivatives.
De’Longhi Group
|
03 Group annual report and financial statements 129
The maximum credit risk in the event of counter-
party default relating to the Group’s other financial
assets, whose classification is presented in note
41. IFRS 7 classification of financial assets and lia-
bilities, is equal to the book value of these assets.
Liquidity risk
Liquidity risk is the risk of not having the fund
needed to fulfil payment obligations arising from
operating and investment activities and from the
maturity of financial instruments.
The Group uses specific policies and procedures
for the purposes of monitoring and managing this
risk, including:
• centralized management of financial payables
and cash, supported by reporting and informa-
tion systems and, where possible, cash pooling
arrangements;
• raising of medium and long‐term finance on cap-
ital markets;
• diversification of the type of financing instru-
ments used;
• obtaining of short‐term credit lines so as to
ensure wide room for manoeuvre for the purpos-
es of managing working capital and cash flows;
• monitoring of current and forecast financing
needs and distribution within the Group.
The Group has both medium‐term bank credit lines
(related to the loans disclosed in this Financial
Statements) and short‐term credit lines (typically
renewed on an annual basis), for financing working
capital and other operating needs (issue of guaran-
tees, currency transactions etc.).
These credit lines, along with cash flow generated
by operations, are considered sufficient to satisfy
the Group’s annual funding requirements for work-
ing capital, investments and settlement of paya-
bles on their natural due dates.
Note 41. IFRS 7 classification of financial assets
and liabilities presents the book value of financial
assets and liabilities, in accordance with the cate-
gories identified by IFRS 9.
The following table summarizes the due dates of
the Group’s financial liabilities at 31 December
2023 and 31 December 2022 on the basis of con-
tractual payments which have not been
discounted.
Undiscounted Payable Payable in Undiscounted Payable Payable in Payable in Payable in cash flows at within one more than cash flows at within one more than 1-5 years 1-5 years 31.12.2023 year five y ears 31.12.2022 year five y ears Bank loans and borrowings (*) 533,142 212,458 320,684 - 611,898 104,922 506,976 -Other financial payables (**) 311,281 75,049 72,957 163,275 342,061 81,393 95,623 165,045 T rade pa yables 716,238 716,238 - - 540,513 540,513 - -Current tax payables and other 207,868 207,860 9 - 191,131 190,953 178 -payables
With regard to lease liabilities in accordance with
IFRS 16, please refer to Note 15. Leases.
(*) The corresponding balance reported in the financial statements was €496,849 thousand at 31 December 2023 vs. €569,091 thousand at 31 December 2022 and refers to medium/long and short term
bank debt.
(**) The corresponding balance in the accounts is €286,629 thousand at 31 December 2023 and €314,528 at 31 December 2022 and refers to long-term payables comprehensive of their short-term por-
tion of the private placement.
De’Longhi Group
|
03 Group annual report and financial statements 130
Exchange rate risk
In carrying on its business, the Group is exposed to the
risk of fluctuations in currencies (other than its func-
tional one) in which ordinary trade and financial trans-
actions are denominated. For the purposes of protect-
ing its income statement and statement of financial
position from such fluctuations, the Group adopts a
suitable hedging policy that eschews speculative ends.
Hedging policies
Hedging is carried out centrally by a special team
on the basis of information obtained from a de-
tailed reporting system, using instruments and pol-
icies that comply with international accounting
standards. The purpose of hedging is to protect ‐ at
individual company level ‐ the future revenues/
costs contained in budgets and/or long‐term plans,
trade and financial receivables/payables and net
investments in foreign operations.
Purpose of hedging
Hedging is carried out with three goals:
a. to hedge cash flows of budgeted or planned
amounts up until the time of invoicing, with a
time horizon that doesn’t go beyond 24 months;
b. to hedge the monetary amounts of receivables
and payables originating from invoicing and fi-
nancing transactions;
c. to hedge exchange rate risk relating to net in-
vestments in foreign operations.
The principal currencies to which the Group is ex-
conditions thus negotiated are passed down in full
to Group companies so that De’ Longhi Capital Ser-
vices S.r.l. does not directly carry derivatives for
risks that are not its own.
Sensitivity analysis
When assessing the potential impact, in terms of
change in fair value, of a hypothetical, sudden
+/‐5% change in year‐end exchange rates, it is nec-
essary to distinguish between the risk associated
with expected future revenues/costs and the risk
associated with foreign currency assets and liabili-
ties at 31 December 2023:
a. with regard to the risk connected to future flows
(revenues/costs forecast in the budget and/or mul-
ti-year plans), at 31 December 2023 the fair value of
the relative hedges were recognized in net equity in
accordance with IAS standards as described in the
section Accounting standards - Financial instru-
ments found in these Explanatory Notes; a change
of +/- 5% in the year-end exchange rates of the ex-
posed currency is estimated to produce a change
of +/ - €2.1 million before tax (+/- €3.2 million before
tax at 31 December 2022). This figure would
impact the income statement solely in the year in
which the hedged revenues/costs materialize;
b. as for the risk associated with foreign currency
assets and liabilities. the analysis considers only
unhedged receivables/payables in currencies other
than the functional currency of the individual com-
panies. since the impact of any hedges is assumed
to be equal and opposite to that of the hedged
items. A +/‐ 5% change in year‐end exchange rates
of the principal exposed currencies (mainly the USD
posed are:
• the US dollar (mainly the EUR/USD and GBP/
USD), being the currency in which a significant
part of the cost of raw materials, parts and fin-
ished products is expressed;
• the Japanese yen (JPY/HKD), for sales on the
Japanese market;
• the Australian dollar (AUD/HKD) for sales on the
Australian market;
• the Czech koruna and the Polish Zloty, for sales
on the East Europe market;
• the British Pound (EUR/GBP), for sales on the UK
market;
• the Renminbi (CNY/HKD) for the cost of raw ma-
terials, parts and finished products.
Instruments used
Highly liquid derivative instruments of a non‐specu-
lative nature are used, mostly forward purchase/
sale agreements.
The transactions are entered into with primary, well
known counterparties of international standing and
using methods which allow for best practice execu-
tion for each transaction.
Operating structure
Hedging activity is centralized (except for isolated,
negligible cases) under De’ Longhi Capital Services
S.r.l., a Group company, which intervenes on the
markets on the basis of information received from
the individual operating companies. The terms and
and the Renminbi) against the principal functional
currencies would produce a change in fair value of
around +/‐ €1.2 million before tax (+/‐ €1.9 million
before tax at 31 December 2022).
The hedging transactions at 31 December 2023 are
described in the paragraph “Interest rate and cur-
rency exchange hedges at 31 December 2023”.
Interest rate risk
The Group is exposed to interest rate risk on floating
rate loans and borrowings. This risk is managed cen-
trally by the same team that manages currency risks.
The bonds and a part of the loan taken out in 2019,
which is hedged with an Interest Rate Swap, are
fixed rate, while the remainder of the Group’s finan-
cial debt at 31 December 2023 was floating rate.
The purpose of interest rate risk management is to
fix in advance the maximum cost (in terms of the
interbank rate, which represents the benchmark for
these borrowings) for a part of the financial debt.
Sensitivity analysis
When estimating the potential impact of a hypo-
thetical, sudden material change in interest rates
(+/- 1% in market rates) on the cost of the Group’s
debt, only those items forming part of net financial
position which earn/incur interest at floating rates
have been considered and not any others (meaning
total net assets of €636,4 million on a total of
€662.6 million in net debt at 31 December 2023
and total net assets of €169.3 million on a total of
€298.8 million in net debt in 2022).
De’Longhi Group
|
03 Group annual report and financial statements 131
It is estimated that a +/‐ 1% change in interest rates would have an impact of +/- €6.4 million before tax at 31
December 2023 recognized entirely in the income statement (+/‐ €1.7 million before tax at 31 December
2022).
Interest rate and currency exchange hedges at 31 December 2023
At 31 December 2023 the Group has a number of derivatives, hedging both the fair value of underlying in-
struments and exposure to changes in cash flow.
For accounting purposes, derivatives that hedge expected future cash flow are treated in accordance with
hedge accounting as called for in IFRS 9.
Derivatives that hedge foreign currency payables and receivables are reported with changes in their fair
value reported in the income statement. These instruments offset the risk on the hedged item (which is a
recognized asset or liability).
The fair value of the outstanding derivatives at 31 December 2023 is provided below:
Fair Value at 31/12/2023 FX forward agreements (2,236)Derivatives hedging foreign currency r eceiva-(2,236)bles/payables FX forward agreements (621)IRS hedging Parent Company’s loans 2,194 Derivatives covering expected cash flows 1,573 T otal fair value of the derivatives (663)
Forward agreements to hedge against a change in 2023 trade flows:
A list of the forward agreements hedging a change in 2024 trade flows at 31 December 2023:
Notional amount (in thousands) Fair value (in €/000)Currency Current Purchases Sales T otal Current assets Liabilities EUR/CHF* - 26,300 26,300 - (1,035)EUR*/RON - 75,500 75,500 743 (13)EUR/USD* (9,438) - (9,438) 22 (14)EUR/PLN* - 55,000 55,000 - (129)EUR/GBP* - 16,550 16,550 27 (74)USD/CAD* - 66,000 66,000 103 (203)HKD/CNY* (1,030,000) - (1,030,000) 1,065 (1,930)AUD*/HKD - 59,000 59,000 377 (150)HKD/JPY* - 3,250,000 3,250,000 489 -HKD/KRW* - 14,900,000 14,900,000 120 (79)USD*/GBP (15,000) - (15,000) 59 -3,005 (3,626)
* Risk currency
The cash flow hedge reserve recognized for these hedges was negative for €956 thousand at 31 December
2023, after tax of €228 thousand (at 31 December 2022 this same reserve was positive for €2,180 thou-
sand, after tax of €314 thousand).
During 2023 the Group reversed to the income statement a net amount of €2,180 thousand from the posi-
tive cash flow hedge reserve at 31 December 2022.
De’Longhi Group
|
03 Group annual report and financial statements 132
This amount was reported in the following lines of the income statement:
2023 2022 Increase (reduction) in revenues (1,267) 187(Increase) reduction in materials consumed (1,229) 4,723 Net financial income (expenses) - (112)T axes 315 (1,026)T otal recognized in income statement (2,181) 3,772
Hedges against foreign currency receivables and payables:
Notional amount (in thousands) Fair v alue (in €/000)Currency Purchases Sales T otal Current assets Current Liabilities AUD*/HKD (25,348) 51,685 26,337 528 (1,034)AUD/NZD* - 5,528 5,528 10 -EUR*/CHF (1,000) 4,090 3,090 84 (16)EUR/AUD* (100) 1,550 1,450 - (12)EUR/CHF* (17,100) 21,200 4,100 334 (402)EUR/CZK* (107,300) 262,200 154,900 71 (21)EUR/GBP* (62,040) 20,700 (41,340) 138 (415)EUR*/GBP (120) 2,912 2,792 - (41)EUR/HKD* (7,800) 125,160 117,360 - (56)EUR*/HKD (7,186) - (7,186) 168 (1)EUR/HUF* (1,550,000) 2,105,000 555,000 8 (7)EUR/JPY* (8,000) - (8,000) - -EUR/PLN* (269,450) 247,800 (21,650) 52 (75)EUR/RON* (307,000) 617,640 310,640 - (119)EUR*/RON - 20,000 20,000 - (19)EUR/SEK* (10,900) 3,700 (7,200) 16 (3)EUR/USD* (722,114) 122,430 (599,685) 2,520 (4,969)EUR*/USD (280,000) - (280,000) 2,145 -GBP/USD* (3,305) 6,450 3,145 26 (25)HKD/CLP* - 4,364,000 4,364,000 - (2)HKD/CNH* (542,162) 69,400 (472,762) 707 (78)HKD/JPY* - 4,445,711 4,445,711 - (800)HKD/KRW* (1,000,000) 8,057,200 7,057,200 5 (61)HKD/MXN* (26,400) 57,422 31,022 2 (88)USD/MXN* - 252,900 252,900 - (384)SGD*/HKD (10,246) 130 (10,116) 112 -USD/CAD* (5,520) 36,910 31,390 53 (613)USD*/CHF (400) 7,530 7,130 327 (7)USD*/RON (18,000) - (18,000) - (179)USD/ZAR* (20,800) 61,470 40,670 - (114)7,306 (9,542)
* Risk currency
De’Longhi Group
|
03 Group annual report and financial statements 133
IRS (Interest Rate Swap) hedging interest rate risk on loans:
The fair value of the derivatives is calculated using the discounted cash flow method based on the swap
curve, not including the spread; at 31 December 2023 the fair value of the derivatives, which also takes into
account counterparty risk in accordance with IFRS 13 - Fair Value measurement, came to a positive €2,194
thousand which is recognized under other financial receivables.
As the hedge on future interest flows qualifies as an effective hedge, at 31 December 2023 a positive cash
flow hedge reserve of €1,924 thousand was reported in net equity, net of the related tax effect of €462
thousand.
Details are as follows (the figures are shown before tax):
31/12/2023 Valore nozionale Fair value (in M/Euro)(in M/E uro)Interest Rate Swap (IRS) connected t o the loan 56,000 2,194 T otal fair value of the derivatives 2,194 of which: positive short-term fair value 2,194
44. Tax position
The following positions emerged during the periodic audits carried out by the tax authorities:
De’Longhi Appliances S.r.l.
In 2023 a target audit was carried out relating to intercompany transactions, the accounting and tax treat-
ment of dividends received for the tax years 2017 to 2021 and the tax credit matured for investments made
in research and development pursuant to Law 190/2014, relative to the tax years 2015 to 2019.
The target audit was was carried out by the Veneto Regional Office of the Revenue Service and the report of
the findings was delivered on 27 June 2023.
Between 23 November and 5 December 2023, the company was requested to appear for the purposes of
IRES and IRAP investigations for the years 2017, 2018 e 2019 and initial meetings with the Veneto Regional
Office of the Revenue Service followed.
When preparing the 2023 consolidate annual report, the Group, together with its tax consultants, found that
it was unlikely that the investigations would move forward.
45. Transactions and balances with related parties
Appendix 3 contains the information concerning transactions and balances with related parties required by
CONSOB Circulars 97001574 dated 20 February 1997, 98015375 dated 27 February 1998 and DEM/2064231
dated 30 September 2002 relating to related party transactions; all transactions fell within the Group’s
normal scope of operations and were settled under arm’s-length terms and conditions.
Transactions and balances between the parent company and subsidiaries are not reported since these have
been eliminated upon consolidation.
46. Operating segments
As required under IFRS 8, following the demerger transaction the Group’s activities were broken down into
three operating segments (Europe, APA, MEIA) based on business region.
Each segment is responsible for all aspects of the Group’s brands and services different markets; the reve-
nues and the margins, therefore, generated by each operating segment (based on business region) may not
coincide with the revenues and margins of the relative markets (based on geographic area) given the sales
made by a few Group companies outside of their respective geographical areas and the intragroup transac-
tions not allocated based on destination.
De’Longhi Group
|
03 Group annual report and financial statements 134
Information relating to operating segments is presented below:
Income Statement data
2023 Intersegment Americas/Europe MEIA eliminations T otal A PA(**)T otal revenues (*) 2,278,490 1,506,963 159,126 (868,675) 3,075,904 EBITDA 280,966 142,360 14,820 (327) 437,819 Amortization (76,029) (31,921) (241) - (108,191)EBIT 204,937 110,439 14,579 (327) 329,628 Net financial income (2,330)(expenses)Profit (loss) before taxes 327,298 T axes (76,886)Profit (loss) for the year 250,412 Profit (loss) pertaining to 35 minority Profit (loss) pertaining to 250,377 Group
(*) The revenues for each segment include revenues generated by both third parties and other Group operating segments.
(**) Eliminations refer to intersegment revenues generated and eliminated on a consolidated basis.
Data from statement of financial position
31 December 2023 Americas/Intersegment Europe MEIA T otal A PA eliminations T otal assets 3,256,416 1,440,959 85,952 (970,899) 3,812,428 T otal liabilities (2,190,713) (744,695) (36,782) 970,901 (2,001,289)
Income Statement data
2022 Intersegment Americas/Europe MEIA eliminations T otal A PA(**)T otal revenues (*) 2,206,388 1,512,722 181,317 (741,994) 3,158,433 EBITDA 236,931 119,979 16,089 (3,623) 369,376 Amortization (72,408) (33,157) (273) - (105,838)EBIT 164,523 86,822 15,816 (3,623) 263,538 Net financial income (25,341)(expenses)Profit (loss) before taxes 238,197 T axes (58,354)Profit (loss) for the year 179,843 Profit (loss) pertaining to 2,415 minority Profit (loss) pertaining to 177,428 Group
(*) The revenues for each segment include revenues generated by both third parties and other Group operating segments.
(**) Eliminations refer to intersegment revenues generated and eliminated on a consolidated basis.
Data from statement of financial position
31 dicembr e 2022 Americas/Intersegment Europe MEIA T otal A PA eliminations T otale attività 3,017,178 1,451,094 101,113 (1,015,679) 3,553,706 T otale passività (2,080,068) (787,491) (38,433) 1,015,677 (1,890,315)
De’Longhi Group
|
03 Group annual report and financial statements 135
47. Subsequent events
After 31 December 2023 through the date on which this annual report was approved, no events occurred
that would have had a significant impact on the financial and economic results recorded, as per IAS 10 -
Events after the reporting period.
On 27 February 2024 the Group finalized the agreements for a business combination between Eversys (a
leading company in the production and distribution of automatic coffee machines) and La Marzocco (a
leading company in the production and distribution of semi-automatic coffee machines and coffee
grinders).
With this transaction, La Marzocco and Eversys will be able to create synergies and cross-selling opportuni-
ties, to further strengthen their position along the entire value chain, from research and engineering to pro-
duction and market development, while creating a global player able to effectively compete in a leadership
position in different market segments, such as automatic machines, traditional machines and luxury house-
hold, offering a variety and complementary of products, technologies and brands.
The deal is in line with the Group’s strategic guidelines, which see the further consolidation of its leadership
in the world of coffee and the expansion of its presence in the professional channel.
The transaction can be classified as a “transaction between related parties of greater importance”, due to
the fact that De’ Longhi S.p.A. and La Marzocco International LLC are subject to the common control of De
Longhi Industrial S.A..
As such, the transaction received the prior favorable opinion of the Indipendent Committee, responsible for
transactions with related parties of greater importance and the unanimous vote of the Board of Directors of
De’ Longhi S.p.A., with the abstention of the President Giuseppe de’ Longhi and the Directors Fabio de’
Longhi and Silvia de’ Longhi, in compliance with the provisions of the legislation and regulations regarding
related parties.
The transaction involved the creation of a new corporate structure controlled by De’ Longhi S.p.A., with the
related contribution of Eversys, the acquisition by De’ Longhi S.p.A. of shares (directly and/or indirectly held)
of La Marzocco International LLC from De Longhi Industrial S.A. and from minority shareholders, for approx-
imately 41.2% of the share capital. The remaining shares of La Marzocco were also contributed to the new
corporate structure by the shareholders.
Due to the finalization of the transaction on the basis of preliminary results for Eversys and La Marzocco,
while still being audited, De’ Longhi Group owns approximately 61.6% of the new entity, alongside minority
stakes held by De Longhi Industrial S.A. (26.5% approximately) and the previous minority shareholders of La
Marzocco (12%). The total net cash disbursement by De’ Longhi Group was approximately US$ 373 million,
including US$ 200 million in favour of De Longhi Industrial S.A. (for the 22% share of La Marzocco) and US$
173 million for the purchase of shares from La Marzocco’s minority shareholders (for the 19.1% share of La
Marzocco).
This amount was entirely covered by the own resources of De’ Longhi Group.
The transaction did not have any impact on the De’ Longhi Group’s consolidated results reported in the
present Annual financial report, except for some consulting and advisory costs related to the combination.
Treviso, 12 March 2024
De’ Longhi S.p.A.
Vice President and Chief Executive Officer
Fabio de’ Longhi
Appendices
Group annual report
and financial
statements
De’Longhi Group
|
03 Group annual report and financial statements 137
Appendices
These appendices contain additional information to that reported in the explanatory notes, of which they
form an integral part.
This information is contained in the following appendices:
1. List of consolidated companies
2. Statement of consolidated cash flows in terms of net financial position
3. Transactions and balances with related parties:
a. Income statement and statement of financial position
b. Summary by company
3. Fees paid to the external auditors
4. Certification of the consolidated financial statements pursuant to art. 81‐ter of CONSOB Regulation
11971 dated 14 May 1999 and subsequent amendments and additions.
De’Longhi Group
|
03 Group annual report and financial statements 138
Interest held at 31/12/2023 Company name Registered office Currency Share capital (1)Directly Indirectly DE’L ONGHI APPLIANCES S.R.L. Treviso EUR 200,000,000 100%DE’L ONGHI AMERICA INC. Upper Saddle River USD 600,000 100%DE’L ONGHI FRANCE SAS Clichy EUR 2,737,500 100%DE’L ONGHI CANADA INC. Brampton CAD 1 100%DE’L ONGHI DEUTSCHLAND GMBH Neu-Isenburg EUR 2,100,000 100%DE’L ONGHI BRAUN HOUSEHOLD GMBH Neu-Isenburg EUR 100,000 100%DE’L ONGHI ELECTRODOMESTICOS ESP ANA S.L. Barcellona EUR 3,066 100%DE’L ONGHI CAPIT AL SER VICES S.R.L. (2) Tre viso EUR 53,000,000 11% 89%E- SER VICES S.R.L. T reviso EUR 50,000 100%DE’L ONGHI KENWOOD A.P.A. L TD Hong K ong HKD 73,010,000 100%TRICOM INDUSTRIAL COMP ANY LIMITED Hong K ong HKD 171,500,000 100%PROMISED SUCCESS LIMITED Hong Kong HKD 28,000,000 100%ON SHIU (ZHONGSHAN) ELECTRICAL APPLIANCE CO.L TD. Zhongshan City CNY USD 21.200.000 100%DE’L ONGHI-KENWOOD APPLIANCES (DONG GUAN) CO.L TD. Qing Xi T own CNY HKD 285.000.000 100%DE L ONGHI BENEL UX S.A. Luxembourg EUR 181,730,990 100%DE’L ONGHI JAP AN CORPORA TION Tokyo JPY 450,000,000 100%DE’L ONGHI AUSTRALIA PTY L TD. Prestons AUD 28,800,001 100%DE’L ONGHI NEW ZEALAND L TD. A uckland NZD 16,007,143 100%DE’L ONGHI LL C Mosca RUB 3,944,820,000 100%KENWOOD APPLIANCES L TD. Hav ant GBP 30,586,001 100%KENWOOD LIMI TED Havant GBP 26,550,000 100%KENWOOD IN TERNA TIONAL L TD. Havant GBP 20,000,000 100%KENWOOD APPL. (SINGAPORE) PTE L TD. Singapore SGD 500,000 100%KENWOOD APPL. (MALAY SIA) SDN.BHD. Subang Jaya MYR 1,000,000 100%DE’L ONGHI-KENWOOD GMBH Wr Neudorf EUR 36,336 100%DEL ONGHI SOUTH AFRICA PTY.L TD. Constantia Kloof ZAR 100,332,501 100%DE’L ONGHI KENWOOD HELLAS SINGLE MEMBER S.A. Atene EUR 452,520 100%DE’L ONGHI POR TUGAL UNIPESSOAL LDA Matosinhos EUR 5,000 100%ARIETE DEUTSCHLAND GMBH Dusseldor f EUR 25,000 100%
APPENDIX 1
List of consolidated
companies
Companies consolidated according to line-by-line method
De’Longhi Group
|
03 Group annual report and financial statements 139
Interest held at 31/12/2023 Company name Registered office Currency Share capital (1)Directly Indirectly CLIM.RE. S.A. Luxembour g EUR 1,239,468 4% 96%ELLE S.R.L. T reviso EUR 10.000 100%T ASFIYE HALINDE DE’LONGHI BOSPHORUS EV ALETLERI TICARET ANONIM Istanbul T RY 3,500,000 100%SIRKETI DE’L ONGHI PRAGA S.R.O. Praga CZK 200,000 100%DE'L ONGHI SWITZERLAND AG Baar CHF 1,000,000 100%DL HR VA TSKA D.O.O. Zagabria EUR HRK 20.000 100%DE’L ONGHI BRASIL - COMÉRCIO E IMPOR TAÇÃO Ltda São Paulo BRL 43,857,581 100%DE’L ONGHI POLSKA SP. Z.O.O. Varsavia PLN 50,000 0% 100%DE’L ONGHI APPLIANCES TECHNOLOGY SERVICES (Shenzen) Co. Ltd Shenzen C NY USD 175.000 100%DE’L ONGHI UKRAINE LL C Kiev UAH 549,843 100%DE’L ONGHI KENWOOD MEIA F.ZE Dubai USD AED 2.000.000 100%DE’L ONGHI ROMANIA S.R.L. Cluj-Napoca RON 140,000,000 10% 90%DE'L ONGHI KOREA L TD Seoul KRW 900,000,000 100%DL CHILE S.A. Santiago del Cile CLP 3,079,065,844 100%DE’L ONGHI SCANDINA VIA AB Stockholm SEK 5,000,000 100%DEL ONGHI MEXICO SA DE CV Bosques de las Lomas MXN 53,076,000 100%DE’L ONGHI APPLIANCES (SHANGHAI) CO. L TD Shanghai CNY USD 12.745.000 100%DE' L ONGHI MAGY ARORSZÁG KFT. Budapest HUF 34,615,000 100%DE' L ONGHI US HOLDING LL C Wilmingt on USD 50,100,000 100%DE L ONGHI LLP Almaty KZT 500,000 100%BRUNO IN TERNA TIONAL HoldCo LL C Wilmington USD 1 100%BRUNO U.S. HoldCo LL C Wilmington USD 1 100%
De’Longhi Group
|
03 Group annual report and financial statements 140
The list of the companies belonging to the Capital Brands Group is provided below; all of the companies are
indirectly controlled 100% by De’ Longhi S.p.a.:
Company name Registered office Currency CAPIT AL BRANDS HOLDINGS, INC. Wilmington USD CAPIT AL BA Y, LIMITED (3) Hong Kong USD CAPBRAN HOLDINGS, LLC Los Angeles USD CAPIT AL BRANDS, LLC Los Angeles USD CAPIT AL BRANDS DISTRIBUTION, LL C Los Angeles USD BULLET BRANDS, LL C Los Angeles USD HOMELAND HOUSEW ARES, LL C Los Angeles USD BABY BULLET, LL C Los Angeles USD NUTRIBULLET, LL C Los Angeles USD NUTRILIVING, LL C Los Angeles USD
The list of the companies belonging to the Eversys Group is provided below; all of the companies are indi-
rectly controlled 100% by De’ Longhi S.p.a.:
Company name Registered office Currency EVERSYS S.A. Sierre CHF EVERSYS INC T oronto USD EVERSYS INC DELAW ARE Wilmington USD EVERSYS UK LIMITED Crawle y GBP EVERSYS IRELAND LIMITED Dublin EUR EVERSYS DIGITRONICS AG Münsingen CHF ELLITEC GMBH Stans CHF
De’Longhi Group
|
03 Group annual report and financial statements 141
Investments valued in accordance with the equity method
Interest held at 31/12/2023 Company name Registered office Currency Share capital (1)Directly Indirectly DL-TCL HOLDINGS (HK) L TD. Hong Kong HKD USD 5.000.000 50%TCL-DE’L ONGHI HOME APPLIANCES (ZHONGSHAN) CO.L TD. Zhongshan City CNY USD 5.000.000 50%NPE S.R.L. T reviso EUR 1,000,000 20%H&T-NPE EAST EUROPE S.R.L. Madaras RON 14,707,600 20%
(1) Figures at 31 December 2023, unless otherwise specified.
(2) The articles of association, approved by the extraordinary shareholders’ meeting held on 29 December 2004, give special rights to De’Longhi S.p.A. (holding 89% of the voting rights) for ordinary resolutions (approval of financial statements, declaration of dividends,
nomination of directors and statutory auditors, purchase and sale of companies, grant of loans to third parties); voting rights are proportional as far as other resolutions are concerned, except for the preferential right to receive dividends held by the shareholder Ken-
wood Appliances Ltd.
(3) Dormant.
De’Longhi Group
|
03 Group annual report and financial statements 142
APPENDIX 2
Statement of consolidated cash
flows in terms of net financial
position
(€/000) 2023 2022 Profit (loss) pertaining to the Group 250,377 177,428 Income taxes for the period 76,886 58,354 Amortization 108,191 105,838 Net change in provisions and other non-cash items 10,851 (1,661)Cash flow generated by current oper ations (A) 446,305 339,959 Change in assets and liabilities for the period: Tr ade receivables 2,369 103,352 Inventories 34,553 230,225 Tr ade payables 186,920 (417,726)Other changes in net working capital 11,740 203 Payment of income taxes (97,555) (104,086)Cash flow generated (absorbed) by movements in working capital (B) 138,027 (188,032)Cash flow generated by current oper ations and mo vements in working capital (A+B) 584,332 151,927 Investment activities: Investments in intangible assets (18,670) (15,282)Other cash flows for intangible assets - -Investments in property, plant and equipment (76,632) (113,638)Other cash flows for pr oper ty, plant and equipment 1,933 522 Investments in leased assets (41,036) (28,139)Other cash flows for leased assets 950 1,225 Net investments in financial assets and in minority interest 1,147 (890)Cash flow absorbed by ordinary investment activitie s (C) (132,308) (156,202)Cash flow by operating activities (A+B+C) 452,024 (4,275)Fair value and cash flow reserves (614) (3,893)Change in currency translation reserve (20,648) 592 Exercise of stock option 5,101 3,355 Dividends paid (72,079) (124,501)Increase of minority interest 35 2,415 Cash flows absorbed by changes net equity (D) (88,205) (122,032)Cash flow for the period (A+B+C+D) 363,819 (126,307)Opening net financial position 298,781 425,088 Cash flow for the period (A+B+C+D) 363,819 (126,307)Consolidated closing net financial position 662,600 298,781
De’Longhi Group
|
03 Group annual report and financial statements 143
APPENDIX 3
Transactions and balances
with related parties
of which with related of which with related (€/000) 2023 2022 parties parties Revenue from contr acts with cust omers 3,043,086 691 3,126,940 1,445 Other r evenues 32,818 722 31,493 2,269 T otal consolidated re venues 3,075,904 3,158,433 Raw and ancillary materials, consumables and goods (1,301,454) (34,455) (1,194,715) (29,846)Change in inventories of finished pr oducts and work in (23,588) (235,736)progress Change in inventories of raw and ancillary materials, (10,800) 5,519 consumables and goods Materials consumed (1,335,842) (1,424,932)Payroll costs (393,246) (356,710)Services and other operating expenses (885,207) (694) (987,496) (779)Provisions (23,790) (19,919)Amortization (108,191) (105,838)EBIT 329,628 263,538 Net financial income (expenses) (2,330) (286) (25,341) (289)Profit (loss) before taxes 327,298 238,197 T axes (76,886) (58,354)Consolidated pr ofit (loss) 250,412 179,843 Profit (loss) pertaining to minority 35 2,415 Consolidated pr ofit (loss) after taxes 250,377 177,428
De’Longhi Group
|
03 Group annual report and financial statements 144
of which of which Assets 31.12.2023 with r elated 31.12.2022 with r elated (€/000)parties parties Non-current assets Intangible assets 878,330 891,181- Goodwill 371,686 373,754- Other intangible assets 506,644 517,427 Property, plant and equipment 477,981 446,899- Land, property, plant and machinery 226,757 210,818- Other tangible assets 154,799 158,071- Right of use assets 96,425 78,010 Equity investments and other financial assets 131,725 136,336- Equity investments 4,294 6,103- Receivables 5,400 5,609- Other non-current financial assets 122,031 124,624 Deferred tax assets 60,413 64,634 T otal non-current assets 1,548,449 1,539,050 Current assets Inventories 504,678 550,659 T rade r eceivables 272,692 1,032 278,811 1,417 Current tax assets 20,244 15,512 Other r eceivables 43,695 29,884 Current financial receivables and assets 172,472 368,354 Cash and cash equivalents 1,250,198 770,247 T otal current assets 2,263,979 2,013,467 Non-current assets held for sale - 1,189 T otal assets 3,812,428 3,553,706
of which of which Net equity and liabilities 31.12.2023 with r elated 31.12.2022 with r elated (€/000)parties parties Net equity Group por tion of net equity 1,811,139 1,659,117- Share Capital 226,590 226,590- Reserves 1,334,172 1,255,099- Pr ofit (loss) pertaining t o the Group 250,377 177,428 Minority interest - 4,274 T otal net equity 1,811,139 1,663,391 Non-current liabilities Financial pa yables 593,079 773,968- Banks loans and borrowings (long-term 300,844 477,582 portion)- Other financial pay ables (long-term portion) 214,617 236,026- Lease liabilities (long-term portion) 77,618 19,008 60,360 18,070 Deferred tax liabilities 72,164 83,254 Non-current provisions for contingencies and 122,918 110,699 other char ges- Employ ee benefits 51,041 38,532- Other provisions 71,877 72,167 T otal non-current liabilities 788,161 967,921 Current liabilities T rade pa yables 716,238 7,473 540,687 13,392 Financial pa yables 289,022 190,476- Banks loans and borrowings (short-term 196,005 91,510 portion)- Other financial pay ables (short-term portion) 72,012 78,502- Lease liabilities (short-term por tion) 21,005 4,076 20,464 3,513 Current tax liabilities 70,571 26,115 76,264 47,984 Other pa yables 137,297 114,967 T otal current liabilities 1,213,128 922,394 T otal net equity and liabilities 3,812,428 3,553,706
De’Longhi Group
|
03 Group annual report and financial statements 145
Summary by company
In compliance with the guidelines and methods for identifying significant transactions, especially those with related parties covered by the De’ Longhi S.p.A. rules on corporate governance, we shall now present the follow-
ing information concerning related party transactions during 2023 and related balances with mainly commercial nature at 31 December 2023:
Financial Income Tr ade and other Tr ade and other Financial pay ables (€/million) Revenues Costs(Expense)receivables payables- IFRS 16 Related companies: HeT-NPE EAST EUROPE SRL - 0.1 - - 0.2 -TCL-De’Longhi Home Appliances (Zhongshan) Co.Ltd. - 2.3 - - 0.4 -NPE S.r.l. 0.2 32.1 - 0.5 6.9 -Gamma S.r.l. 0.7 0.6 (0.3) 0.4 - 23.1 De Longhi Industrial S.A. - - - - 26.1 -Other r elated parties 0.5 - - 0.1 - -T otal related parties 1.4 35.1 (0.3) 1.0 33.6 23.1
Following the application of IFRS 16 Leases, payables owed to Gamma S.r.l., along with the relative right-of-use assets, stemming from the leases for two locations in Italy were recognized; interestexpenses owed for the period was also recognized.
The Parent Company De’ Longhi S.p.A. and a few Italian subsidiaries adhered to the national tax consolidation regime (Presidential Decree. n. 917/1986 - “TUIR”- articles 117 through 129, and Decree of 1st March 2018), as part of a tax group formed by De Longhi Industrial
S.A.; the agreement entered into covers the three-year period 2022-2024 and may be renewed. The €26.1 million included in tax payables is comprised of the taxes payable by the members of the tax group through De Longhi Industrial S.A..
Please refer to the yearly “Annual Remuneration Report ” for information relating to the compensation of directors and statutory auditors.
De’Longhi Group
|
03 Group annual report and financial statements 146
APPENDIX 4
Fees paid to the external
auditors Disclosure
pursuant to art. 149-duo-
decies of the Consob
Issuer Regulations
Type of service Party performing the service Recipient 2023 Fees
Auditing
PwC S.p.A. De’ Longhi S.p.A. (parent company) 400
PwC S.p.A. Italian subsidiaries 267
Network of parent company auditor Foreign subsidiaries 1,401
Other auditors Foreign subsidiaries 96
Other services
PwC S.p.A. De’ Longhi S.p.A. (parent company) 30
Network of parent company auditor De’ Longhi S.p.A. (parent company) 27
PwC S.p.A. Italian subsidiaries 74
Network of parent company auditor Foreign subsidiaries 551
(Euro/000)
De’Longhi Group
|
03 Group annual report and financial statements 147
APPENDIX 5
Certification of the consoli-
dated financial statements
pursuant to art. 81-ter of
CONSOB Regulation 11971
dated 14 May 1999 and sub-
sequent amendments and
additions
The undersigned Fabio de’ Longhi, Chief Executive
Officer, and Stefano Biella, as Officer Responsible
for Preparing the Company’s Financial Report of
De’ Longhi S.p.A., attest, also taking account of the
provisions of paragraphs 2, 3 and 4, art. 154-bis of
Decree 58 dated 24 February 1998:
that the accounting and administrative processes
for preparing the consolidated financial statements
during 2023:
• have been adequate in relation to the company’s
characteristics and
• have been effectively applied.
It is also certified that the consolidated financial
statements at 31 December 2023:
• have been prepared in accordance with the Inter-
national Financial Reporting Standards adopted
by the European Union under Regulation (EC)
1606/2002 of the European Parliament and
Council dated 19 July 2002 and with the meas-
ures implementing art. 9 of Decree 38/2005;
• correspond to the underlying accounting records
and books of account;
• are able to provide a true and fair view of the is-
suer’s statement of financial position and results
of operations and of the Group of companies in-
cluded in the consolidation.
The report on operations contains a reliable ac-
count of performance and of the results of opera-
tions and of the situation of the issuer and the
Group of companies included in the consolidation,
together with a description of the principal risks
and uncertainties to which they are exposed.
Fabio de’Longhi
Chief Executive Officer
Stefano Biella
Officer Responsible for Preparing the Company’s Fi-
nancial Report
External auditors’ report on the
consolidated financial statements
Group annual report
and financial
statements
Independent auditor’s report
in accordance with article 14 of Legislative Decree No. 39 of 27 January 2010 and article 10 of
Regulation (EU) No. 537/2014
To the shareholders of De’ Longhi SpA
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of De’ Longhi Group (the Group), which
comprise the statement of financial position as of 31 December 2023, the income statement, the
statement of comprehensive income, the statement of changes in net equity, the statement of cash
flows for the year then ended, and explanatory notes to the consolidated financial statements,
including material accounting policy information.
In our opinion, the consolidated financial statements give a true and fair view of the financial position
of the Group as of 31 December 2023, and of the result of its operations and cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
European Union, as well as with the regulations issued to implement article 9 of Legislative Decree
No. 38/05.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISA Italia).
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Consolidated Financial Statements section of this report. We are independent of De’
Longhi SpA pursuant to the regulations and standards on ethics and independence applicable to
audits of financial statements under Italian law. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
De’Longhi Group
|
03 Group annual report and financial statements 149
2 of 6
Key Audit Matters Auditing procedures performed in
response to key audit matters
Recoverability of the value of indefinite-
lived intangible assets
Notes 11 and 12 to the consolidated financial
statements
The consolidated financial statements of De’
Longhi SpA SpA include indefinite-lived
intangible assets, which are not amortised but
tested for impairment at least annually.
Indefinite-lived intangible assets comprise
goodwill for Euro 371.7 million and trademarks
for Euro 334.5 million; the latter comprise the
“De’ Longhi” trademark for Euro 79.8 million, a
perpetual licence on the “Braun” brand for Euro
95.0 million, the “Nutribullet”/”Magic Bullet”
trademark for Euro 120.0 million and the
“Eversys” trademark for Euro 39.2 million.
For the purpose of impairment testing, goodwill
was allocated to the following cash-generating
units (“CGUs”): De’ Longhi, Kenwood, Braun,
Capital Brands and Eversys.
To estimate the recoverable amount of the
individual CGUs, management calculated value in
use using the discounted cash flow method: value
in use is calculated as the sum of the present value
of the future cash flows over the explicit forecast
horizon and a terminal value obtained applying a
long-term growth rate to the last year of the
business plan. The recoverable amount of each
CGU to which goodwill has been allocated was
compared with the net invested capital of the
individual CGUs.
Moreover, the carrying amounts of trademarks
were tested for impairment. The method adopted
for testing, in order to determine the fair values of
these assets, consisted in discounting to present
value the royalties that the Group would be able
to earn by transferring the right to use the
trademark in question to a third party on a
permanent basis.
This method involves estimating the sales
volumes that can reasonably be expected from the
trademarks being tested, the royalty flows and the
discount rate. The recoverable amounts thus
obtained were compared with the carrying
amounts of the trademarks.
As part of our audit of the consolidated
financial statements as of 31 December 2023,
we performed the procedures illustrated
below.
We obtained the exercises prepared by
management to determine the recoverable
amounts of the CGUs identified and
trademarks. The impairment tests were
approved by the board of directors on 12
March 2024.
Our audit approach was based on analysing
the method used by the directors to prepare
the tests and included the following
procedures:
 we understood and evaluated the Group’s
internal control over the process of
testing the recoverability of indefinite-
lived assets;
 we analysed the reasonableness of
management’s considerations about the
identification of the CGUs and the
process of allocation of net assets to the
individual CGUs;
 we analysed the estimated future cash
flows from the CGUs to which goodwill
was allocated and, with regard to
trademarks, the royalty flows, which were
used in the impairment test models,
specifically verifying the reasonableness
of the assumptions used, in light of the
past results of individual CGUs and
individual brands and comparing the
growth rates used by management with
external sources.
With the support of business valuation
experts from the PwC network, we verified
that the valuation methods used for the
impairment tests were consistent with
International Financial Reporting Standards
as adopted by the European Union and with
prevailing practice. Moreover, the key
De’Longhi Group
|
03 Group annual report and financial statements 150
3 of 6
In the course of our audit of the consolidated
financial statements as of 31 December 2023, we
focused on these items as a key audit matter in
consideration of the magnitude of the balances
and the fact that the assets’ recoverability was
verified by management based on assumptions
that are sometime complex, and that by nature
involve the use of management’s judgement,
specifically with reference to the estimation of the
future cash flows expected to be generated from
each CGU and of royalties from trademarks, and
the determination of the long-term growth rates
and discount rates applied.
valuation parameters adopted were analysed
in terms of reasonableness. With specific
reference to the method of calculation of
discount rates, royalty rates, and medium-
/long-term growth rates, we verified that
these had been determined in accordance
with International Financial Reporting
Standards as adopted by the European Union,
with prevailing practice and based on
available market figures. Moreover, we
verified the sensitivity analyses prepared by
management.
We verified the mathematical accuracy of the
calculations of the impairment tests and of
the carrying amounts of net invested capital
of the CGUs identified, determined in
accordance with IAS 36 as of 31 December
2023 that were used for comparison with
values in use.
Finally, our procedures included an analysis
of the notes to the consolidated financial
statements to assess the adequacy and
completeness of disclosures.
Responsibilities of the Directors and the Board of Statutory Auditors for the
Consolidated Financial Statements
The directors are responsible for the preparation of consolidated financial statements that give a true
and fair view in accordance with International Financial Reporting Standards as adopted by the
European Union, as well as with the regulations issued to implement article 9 of Legislative Decree
No. 38/05 and, in the terms prescribed by law, for such internal control as they determine is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
The directors are responsible for assessing the Group’s ability to continue as a going concern and, in
preparing the consolidated financial statements, for the appropriate application of the going concern
basis of accounting, and for disclosing matters related to going concern. In preparing the
consolidated financial statements, the directors use the going concern basis of accounting unless they
either intend to liquidate De’ Longhi SpA or to cease operations, or have no realistic alternative but to
do so.
The board of statutory auditors is responsible for overseeing, in the terms prescribed by law, the
Group’s financial reporting process.
De’Longhi Group
|
03 Group annual report and financial statements 151
4 of 6
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with International Standards on
Auditing (ISA Italia) will always detect a material misstatement when it exists. 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 the
consolidated financial statements.
As part of our audit conducted in accordance with International Standards on Auditing (ISA Italia),
we exercised professional judgement and maintained professional scepticism throughout the audit.
Furthermore:
 we identified and assessed the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error; we designed and performed audit procedures
responsive to those risks; we obtained audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control;
 we obtained 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 Group’s internal control;
 we evaluated the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors;
 we concluded on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern;
 we evaluated the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
 we obtained sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance of
the group audit. We remain solely responsible for our audit opinion on the consolidated
financial statements.
We communicated with those charged with governance, identified at an appropriate level as required
by ISA Italia regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identified
during our audit.
De’Longhi Group
|
03 Group annual report and financial statements 152
5 of 6
We also provided those charged with governance with a statement that we complied with the
regulations and standards on ethics and independence applicable under Italian law and communicated
with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate the related risks, or safeguards
applied.
From the matters communicated with those charged with governance, we determined those matters
that were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We described these matters in our auditor’s report.
Additional Disclosures required by Article 10 of Regulation (EU) No. 537/2014
On 19 April 2018, the shareholders of De’ Longhi SpA in general meeting engaged us to perform the
statutory audit of the Company’s and the consolidated financial statements for the years ending
31 December 2019 to 31 December 2027.
We declare that we did not provide any prohibited non-audit services referred to in article 5,
paragraph 1, of Regulation (EU) No. 537/2014 and that we remained independent of the Company in
conducting the statutory audit.
We confirm that the opinion on the consolidated financial statements expressed in this report is
consistent with the additional report to the board of statutory auditors, in its capacity as audit
committee, prepared pursuant to article 11 of the aforementioned Regulation.
Report on Compliance with other Laws and Regulations
Opinion on compliance with the provisions of Commission Delegated Regulation (EU)
No. 2019/815
The directors of De’ Longhi SpA are responsible for the application of the provisions of Commission
Delegated Regulation (EU) No. 2019/815 concerning regulatory technical standards on the
specification of a single electronic reporting format (ESEF - European Single Electronic Format)
(hereinafter, the “Commission Delegated Regulation”) to the consolidated financial statements as of 31
December 2023, to be included in the annual report.
We have performed the procedures specified in auditing standard (SA Italia) No. 700B in order to
express an opinion on the compliance of the consolidated financial statements with the provisions of
the Commission Delegated Regulation.
In our opinion, the consolidated financial statements as of 31 December 2023 have been prepared in
XHTML format and have been marked up, in all significant respects, in compliance with the provisions
of the Commission Delegated Regulation.
Due to certain technical limitations, some information included in the explanatory notes to the
consolidated financial statements when extracted from the XHTML format to an XBRL instance may
not be reproduced in an identical manner with respect to the corresponding information presented in
the consolidated financial statements in XHTML format.
De’Longhi Group
|
03 Group annual report and financial statements 153
6 of 6
Opinion in accordance with Article 14, paragraph 2, letter e), of Legislative Decree
No. 39/10 and Article 123-bis, paragraph 4, of Legislative Decree No. 58/98
The directors of De’ Longhi SpA are responsible for preparing a report on operations and a report on
the corporate governance and ownership structure of the De’ Longhi Group as of 31 December 2023,
including their consistency with the relevant consolidated financial statements and their compliance
with the law.
We have performed the procedures required under auditing standard (SA Italia) No. 720B in order to
express an opinion on the consistency of the report on operations and of the specific information
included in the report on corporate governance and ownership structure referred to in article 123-bis,
paragraph 4, of Legislative Decree No. 58/98, with the consolidated financial statements of the
De’ Longhi Group as of 31 December 2023 and on their compliance with the law, as well as to issue a
statement on material misstatements, if any.
In our opinion, the report on operations and the specific information included in the report on
corporate governance and ownership structure mentioned above are consistent with the consolidated
financial statements of De’ Longhi Group as of 31 December 2023 and are prepared in compliance with
the law.
With reference to the statement referred to in article 14, paragraph 2, letter e), of Legislative Decree
No. 39/10, issued on the basis of our knowledge and understanding of the Company and its
environment obtained in the course of the audit, we have nothing to report.
Statement in accordance with article 4 of Consob’s Regulation implementing
Legislative Decree No. 254 of 30 December 2016
The directors of De’ Longhi SpA are responsible for the preparation of the non-financial statement
pursuant to Legislative Decree No. 254 of 30 December 2016.
We have verified that the directors approved the non-financial statement.
Pursuant to article 3, paragraph 10, of Legislative Decree No. 254 of 30 December 2016, the non-
financial statement is the subject of a separate statement of compliance issued by ourselves.
Treviso, 28 March 2024
PricewaterhouseCoopers SpA
Signed by
Filippo Zagagnin
(Partner)
This independent auditor’s report has been translated into the English language solely for the
convenience of international readers. Accordingly, only the original text in Italian language is
authoritative.
De’Longhi Group
|
03 Group annual report and financial statements 154
Independent auditors’ report on
consolidated Non-Financial
Statement
Group annual report
and financial statement