AI Tiramisu (Luxemburg) MidCo 3

Luxemburg

Konzernabschluss zum Geschäftsjahr vom 01.01.2023 bis zum 31.12.2023

Annual report 31 December 2023

Contents

Management Report

Consolidated Financial statements

Audit report

Management Report 2023

2023 Performance Highlights

The following tables provide a summary of key economic and financial data for the year ended 31 December 2023 as compared with the years ended 31 December 2022 and 2021.

At a glance

AI Tiramisu (Luxembourg) Midco 3 S.à r.l. (hereinafter "Midco 3" or the "Company" through its subsidiaries (together with the Company the "Group") is one of Europe's main producers of ingredients for artisan pastry, bread and ice cream and chocolate decorations.

The Company was established on 7 April 2022. and on 14 July 2022, through AI Tiramisù S.p.A. ("Tiramisù"), an indirect subsidiary of the Company, completed the acquisition of the entire share capital of Irca S.p.A. ("Irca"), (the "Irca Acquisition"). At the acquisition date, Irca controlled Irca Distribuzione S.r.l ., Irca Spagna Corp S.L ., Dobla Beheer BV and its subsidiaries ("Dobla"). Following the Irca Acquisition, a group reorganisation was performed and Dobla was transferred to AI Tiramisu (Luxembourg) Midco 4 S.à r.l. On 27 September 2023, Tiramisù was merged with and into Irca (the "Merger"). The Merger was effective for accounting and tax purposes from 1 January 2023.

Founded in 1919 and headquartered in the northern Italian town of Gallarate, Irca is one of the world's leading B2B providers of semi-finished ingredients for artisanal chocolate, pastry and bakery products, with a strong platform to capture growth opportunities in the market for artisanal gelato ingredients. The Group design, manufacture, sell and distribute a wide range of high-quality ingredients, serving as a onestop shop for artisanal pastry chefs, bakers, gelato shops, large industrial producers of B2C products and other customers, covering everything needed to create finished products from base to decoration.

Following the Irca Acquisition, the Group has continued to consolidate its presence and integration of its value chain. In July 2022, Irca purchased the entire share capital of Agrinco Holding S.A. which entirely controlled Cesarin S.p.A. ("Cesarin"), the Italian leader in candied fruit, from the Cesarin family and, in October 2022, Irca acquired the entire share capital of Anastasi S.r.l. and 2Aemme S.r.l. (together "Anastasi"). Anastasi is a leading Italian food ingredients company specialised in the manufacturing of semi-finished pistacchio-based products.

On 27 March 2023 the Group finalised the purchase of the "Sweet Ingredients Portfolio" ("Sweet") from Kerry Group (a world leading provider of taste and nutrition solutions for the food, beverage and pharmaceutical markets). Sweet is a leading manufacturer of sweet and cereal-based products with a broad range of technological capabilities, primarily serving the end markets of bakery, cereal, confectionery, dairy and ice cream in Europe and the US. Its operational footprint covers four manufacturing facilities in the US (in Illinois, Kansas, Missouri, and California) ("Sweet US"), and six facilities across the UK, Netherlands, Germany and France ("Sweet EMEA"). The portfolio incorporates a range of products spanning sweet particulates, chocolate confections, baked inclusions, variegates and fruit purées.

On 12 October 2023, Irca Group acquired Ashanti, International School of Pastry & Culinary Arts in Poland ("Ashanti"). The culinary school, founded in 2017, dedicated to professionals and food lovers, is based in Łódź, a city in central Poland. The school offers a wide range of training and workshops for pastry and culinary chefs, ice cream and bakers, bartenders, baristas, sommeliers, as well as companies. In the last 6 years, it has trained approximately 8,000 professionals with its 41 contracted trainers, amongst them international and local leading experts in the culinary world.

The Group delivered a strong performance in 2022 supported by organic growth and the impact of the M&A activity. For the year ended 31 December 2023 the Group generated revenues of €918.6 million (€543.7 million for the year ended 31 December 2022 on a pro forma basis) and Adjusted EBITDA of € 132.2 million (€73.6 million for the year ended 31 December 2022 on a pro forma basis). For the year ended 31 December 2023, assuming the acquisition of Sweet had taken place on 1 January 2023, pro forma revenues and Adjusted EBITDA would have been €1,006.5 million and €139.5 million respectively.

The following graphic sets forth the group structure at 31 December 2023:

⁽¹⁾ Cesarin S.p.A. has 208,000 own shares, representing 10% of share capital

Financial Performance Review

Basis of presentation

The Company was established in April 2022 in the context of the Irca Acquisition, which was completed on 14 July 2022. The first consolidated financial statements of the Group were for the period from 7 April to 31 December 2022, with the results of the Irca Group consolidated from the date of the Irca Acquisition. As a result, the consolidated income statement for the year ended 31 December 2022 only includes approximately 6 months of the results of operations of the Irca Group. Therefore, in order to show a trend in the business and information on a "like for like" basis, the income statement discussion in this management report includes the consolidated results of operations for the year ended 31 December 2023 compared to the results of operations for the year ended 31 December 2022 on a pro forma basis. The key difference between the reported results for 2023 and the pro forma results for 2022 relates to the contribution from the acquisitions that took place in 2023. Consolidated information for the year ended December 31, 2023 excluding the contribution of Sweet is referred to as "Irca Legacy".

Pro forma financial information for the year ended 31 December 2022 (hereinafter "Pro Forma 2022") includes (i) the results of AI Tiramisu (Luxembourg) Midco 3 S.à.r.l ., AI Tiramisu (Luxembourg) Midco 4 S.a.r.l and AI Tiramisu S.p.A.(the "Holding Companies") within the Group perimeter from their establishment in 2022 until 31 December 2022, (ii) the full year results of Cesarin and Anastasi as if they had been acquired on 1 January 2022 and (iii) the full year results of the perimeter of Irca Group as at the acquisition date as if the Irca Group had been consolidated from 1 January 2022.

In order to provide additional information regarding the overall Group perimeter including Sweet, pro forma financial information for the year ended 31 December 2023 has been disclosed. The pro forma financial information for the year ended 31 December 2023 includes the consolidated results of the Group for the year ended 31 December 2023 adjusted to include the full year results of operations of Sweet as if the acquisition had occurred on 1 January 2023.

The following table provides a breakdown of the pro forma results of operations for the year ended December 31, 2023.

	For the year ended 31 December
	2023				2022
(in € thousands and in percentage)	IRCA Legacy ^(A)	Sweet ^(B)	Pro forma ( ^A + ^B )	% of revenues	Pro forma ^(C)	% of revenues
Revenues	644,214	362,296	1,006,510	100.0%	543,725	100.0%
Other revenues and income	2,826	53	2,879	0.3%	3,157	0.6%
Total revenues and other income	647,040	362,349	1,009,389	100.3%	546,882	100.6%
Cost of raw materials	(409,454)	(184,764)	(594,218)	(59.0)%	(341,854)	(62.9)%
Cost of services	(79,024)	(63,651)	(142,675)	(14.2)%	(75,963)	(14.0)%
Personnel expenses	(61,619)	(82,327)	(143,946)	(14.3)%	(58,137)	(10.7)%
Net Release/(Impairment) of provision for financial assets	(749)	(698)	(1,447)	(0.1)%	141	0.0%
Depreciation,amortisation and impairment	(39,073)	(23,691)	(62,764)	(6.2)%	(34,386)	(6.3)%
Other operating costs	(3,134)	(8,230)	(11,364)	(1.1)%	(2,334)	(0.4)%
Operating result	53.987	(1,012)	52,975	5.3%	34,349	6.3%
EBITDA (1)	92,513	22.680	115,193	11.4%	68,665	12.6%
Non-recurring expenses and income	14,508	9.825	24,333	2.4%	20,078	3.7%
Adjusted EBITDA (1)	107,021	32.505	139,526	13.9%	88,743	16.3%

^(A) Refers to the results of operations of AI Tiramisu (Luxembourg) Midco 3 S.a.r.l. and AI Tiramisu (Luxembourg) Midco 4 S.a.r.l., Irca S.p.A ., Ashanti (as if it had been acquired on 1 January 2023), Anastasi and Dobla.
^(B) Refers to the results of operations of Sweet EMEA and USA for the year ended 31 December 2023 as if they had been acquired on 1 January 2023.
^(C) Refers to the results of operations of the Group for the year ended 31 December 2022 as if Irca Group, Cesarin S.p.A., Anastasi S.r.l. and 2.Aemme S.r.l. had been acquired on 1 January 2022. For the calculation of Pro Forma 2022 financial information see our annual report as of and for the period ended 31 December 2022.

Key Highlights

The following tables provide a summary of key economic highlights of the Group for the year ended 31 December 2023 compared with the Pro Forma 2022:

	For the year ended 31 December
(in € thousands)	2023			2022
	Irca Legacy	Sweet ⁽¹⁾	Group	Pro Forma 2022
Revenues	643,898	274,748	918,646	543,725
Operating result	55,895	(4,057)	51,838	34,349
EBITDA	94,385	14,041	108,426	68,665
Adjusted EBITDA	108,893	23,303	132,196	88,743

⁽¹⁾ Relates to the contribution of Sweet to the Group's results of operations generated from the acquisition date to 31 December 2023.

The following table shows the reconciliation between EBITDA and Adjusted EBITDA of the Group for the year ended 31 December 2023 and Pro Forma 2022:

	For the year ended 31 December
(in € thousands)	2023			2022
	Irca Legacy	Sweet ⁽³⁾	Group	Pro Forma 2022
Operating results	55,895	(4,057)	51,838	34,349
Depreciation and amortisation	38,490	18,098	56,588	34,316
EBITDA	94,385	14,041	108,426	68,665
Acquisition related costs ⁽¹⁾		-		14,663
Consultancy costs ⁽²⁾	5,769	995	6,764	1,997
Inventory adjustments ⁽⁴⁾	735	5,055	5,790
Other	8,004	3,212	11,216	3,418
Adjusted EBITDA	108,893	23,303	132,196	88,743

⁽¹⁾ Acquisition related costs for the year ended 31 December 2022 primarily refer to the Irca Acquisition and extraordinary bonuses provided to the employees of the Group.
⁽²⁾ Consultancy costs primarily include extraordinary advisory activities.
⁽³⁾ Relates to the contribution of Sweet to the Group's results of operations generated from the acquisition date to 31 December 2023.
⁽⁴⁾ Relates to the reversal of the inventory measured at fair value and non-recurring write off.

The following table shows the Group's reclassified statement of financial position at 31 December 2023 and 2022:

(in € thousands)	At 31 December 2023	At 31 December 2022 ⁽¹⁾
Fixed assets	1,727,094	1,246,953
Net working capital	49,916	87,004
Non-current liabilities	(63,691)	(74,395)
Net capital employed	1,713,619	1,259,562
Shareholders' equity	(599,234)	(484,136)
Net financial debt	(1,114,385)	(775,426)
Shareholders' equity and net financial debt	(1,713,619)	(1,259,562)

⁽¹⁾ The comparative data at 31 December 2022, have been restated in relation to the completion of the Purchase Price Allocation process of Irca S.p.A., Cesarin S.p.A. and Anastasi S.r.l., fully consolidated since 7 April 2022, July 2022 and October 2022, respectively.

Management's Report

1. Macroeconomic scenario

The global economy is experiencing a gradual rebound following the challenges posed by the Covid-19 pandemic and recent geopolitical tensions. While 2022 saw a significant slowdown in global gross domestic product ("GDP") growth, many negative factors are gradually easing. Factors such as declining energy prices, decreasing inflation, improvements in supply chain obstacles, and reopening of the Chinese economy are contributing to an overall improvement in the global socioeconomic situation.

However, despite these positive trends, the Organization for Economic Co-operation and Development ("OECD") predicts a relatively weak recovery compared to previous years. Global GDP growth is forecasted to be 2.9% in 2023 (as reported in the OECD Economic Outlook published in November 2022), slightly declining to 2.7% in 2024. This subdued growth is attributed to tighter financial conditions, weak trade growth, declining business and consumer confidence, and intensifying geopolitical tensions, such as the Israeli-Palestinian conflict.

Within the Eurozone, the European Commission's Winter Document from February 2024 indicates that the EU's economic activity experienced a slowdown in 2023 due to factors like high inflation and tightening financing conditions. However, rapid and coordinated political responses have enabled the EU to address these challenges effectively. Despite the slowdown, the EU has achieved record-high employment levels and historically low unemployment rates.

In Germany, GDP is forecasted to stagnate in 2023 before growing by 1.3% in 2024. France is expected to see GDP growth of 0.8% in 2023 and 1.3% in 2024, while Spain's growth is projected to slow to 2.1% in 2023 and 1.9% in 2024 after two years of strong post-Covid-19 growth. Italy's GDP growth is expected to slow in 2023 but accelerate in 2024 and 2025 due to investments funded by the National Recovery and Resilience plan.

Turning to an analysis of other countries outside the Eurozone, economists at the OCSA forecast a 1.6% GDP growth for the USA in 2023 and 1.0% in 2024. The increase in private consumption and investments is expected to moderate due to tightening monetary and financial conditions and further impoverishment of savers. In 2023, China's economic growth will reach 5.4% after 3.0% in 2022, settling at 5.1% in 2024. The abolition of zero-Covid restrictions has unlocked pent-up domestic demand for services, increasing revenues in tertiary sectors heavily affected by lockdowns, such as tourism or entertainment.

2. Price trends of raw materials and transportation costs for 2023

The trends observed in 2023 were characterised by divergent movements in the prices of the main raw materials utilised by the Group. Some markets experienced significant inflation (such as cocoa and sugar), bolstered by lower production compared to both European and global demand, while other commodities underwent deflationary dynamics following peaks in post-pandemic contexts. Although the average values of commodity indices, spot, and forward prices remained well above pre-2020 levels, 2023 marked a gradual return to values closer to historical averages.

The Food and Agriculture Organization ("FAO") Price Index, which monitors international prices of frequently traded food commodities, averaged 124.7 for the year 2023, down from the average of 144.7 in 2022, representing a decrease of 13.8%. The Ukrainian crisis effects were partially absorbed by the markets, notably with the FAO index for vegetable oils decreasing by 32.7%, cereals by 15.7%, and dairy products by 17.2%, dropping from the historical peak of 149.5 in 2022 to an average of 123.7 for 2023.

The FAO sugar price index showed continuous growth until September 2023, followed by a gradual but steady decline. On an annual basis, the index increased from 114.5 points to 145, with peaks of 162.7 recorded in September 2023. In the European market, the average quotation for Region 3, including Italy, saw an average increase of 50% in 2023 compared to 2022, with peaks of 70% compared to the previous year. Spot markets in Italy also experienced increases of over 100% compared to the previous year.

Cocoa futures on the London and New York exchanges began an upward trend in January 2023, continuing until December 2023, marking an increase of approximately 70% year-on-year. Unfavourable weather conditions, cocoa plant diseases, and unattractive prices paid to farmers led to lower production, particularly in Cote d'Ivoire and Ghana, causing a supply-demand imbalance. The European grinding index reported by the European Cocoa Association ("ECA") dropped by a modest 2% in Europe, with more pronounced declines recorded in the USA and Asia but offset by increasing processing in cocoaproducing countries.

Energy cost indices witnessed a significant decline during 2023: the industrial producer price index for the energy sector measured by Istat dropped from 247.9 in December 2022 to 143.8 in December 2023, while future contract values traded on the Title Transfer Facility ("TTF"), the benchmark market for continental Europe, fell by approximately 55% from the beginning of 2023 to the end of the year.

Regarding transportation, freight costs, particularly for container transport, experienced a progressive reduction during 2022 and 2023 after a significant increase in 2021 due to the health pandemic. This reduction was predominantly linked to a decrease in transport demand due to economic growth slowdown and inflationary trends, as well as a "natural" return to normal freight rates coinciding with the stabilisation of the health situation and the decongestion of some strategically important global ports. However, in 2024, an increase in maritime freight costs is expected, mainly due to increased demand, turmoil in the Middle East, and the security of maritime transport through the Red Sea.

3. Results of operations

The following table illustrates the consolidated results of operations for the year ending 31 December 2023, and the results of operations for Pro Forma 2022.

	For the year ended 31 December
		2023			2022
(in € thousands and in percentage)	Irca Legacy	Sweet ⁽¹⁾	Group	% of revenues ⁽²⁾	Pro Forma	% of revenues
Revenues	643,898	274,748	918,646	100,0%	543,725	100.0%
Other revenues and income	2,824	53	2,877	0,4%	3,157	0.6%
Total revenues and other income	646,722	274,801	921,523	100,3%	546,882	100.6%
Cost of raw materials	(407,473)	(141,230)	(548,703)	(63,3)%	(341,854)	(62.9)%
Cost of services	(78,953)	(51,366)	(130,319)	(12,3)%	(75,963)	(14.0)%
Personnel expenses	(61,521)	(62,912)	(124,433)	(9,6)%	(58,137)	(10.7)%
Net Release/(Impairment) of provision for financial assets	(749)	(698)	(1,447)	(0,1)%	141	0.0%
Depreciation, amortisation and impairment	(39,014)	(18,098)	(57,112)	(6,1)%	(34,386)	(6.3)%
Other operating costs	(3,117)	(4,554)	(7,671)	(0,5)%	(2,334)	(0.4)%
Operating result	55,895	(4,057)	51,838	8,7%	34,349	6.3%
EBITDA	94,385	14,041	108,426	14,7%	68,665	12.6%
Non-recurring expenses and income	14,508	9,262	23,770	2,3%	20,078	3.7%
Adjusted EBITDA	108,893	23,303	132,196	16,9%	88,743	16.3%

⁽¹⁾ Relates to the contribution of Sweet to the Group's results of operations generated from the acquisition date to 31 December 2023.
⁽²⁾ The percentage of revenues refers to Irca Legacy results.

For the comparability of results, comments are provided comparing Irca Legacy to Pro Forma 2022 in order to isolate the impact of Sweet which contributed to the Group results of operations for nine months of 2023.

Revenues

Revenues amounted to €643.9 million for the year ended 31 December 2023, showing an increase of €100.2 million or 18.4% compared to the €543.7 million for the year ended 31 December 2022. The growth in revenues in 2023 was mainly due to the increase in sales volumes and in sales prices of the main products offered by the Group.

Cost of raw materials, consumables and goods for resale

Cost of raw materials, consumables and goods for resale increased by €65.6 million, or 19.2%, from €341.9 million for the year ended 31 December 2022 to €407.4 million for the year ended 31 December 2023. The increase was mainly due to higher volumes purchased as a result of the increased sales volumes as well as increased purchase prices of raw materials during the same period. As a percentage of revenues, cost of raw materials, consumables and goods for resale marginally increased from 62.9% in the year ended 31 December 2022 to 63.3% in the year ended 31 December 2023. Although Irca Legacy is able to pass-through price increases in raw material costs to customers the timing is not immediate and depends on the channel and geography of the customer.

Cost of services

Cost of services increased by €3.0 million, or 3.9%, from €76.0 million for the year ended 31 December 2022, to €79.0 million for the year ended 31 December 2023. The increase was mainly due to an increase in consultancy and legal fees related to advisor costs incurred in relation to the Sweet acquisition and in the merger between Irca S.p.A. and Tiramisu S.p.A.. As a percentage of revenues, these costs decreased from 14% in the year ended 31 December 2022, to 12.3% in the year ended 31 December 2023.

Personnel expenses

Personnel expenses increased by €3.4 million, or 5.8%, from €58.1 million for the year ended 31 December 2022 to €61.5 million for the year ended 31 December 2023. The change was mainly due to the increase in the number of employees, from 1.128 at 31 December 2022 to 1.188 at 31 December 2023.

Impairment of financial assets

For the year ended 31 December 2023, Irca Group recognized a total of €0.7 million of impairment of financial assets, compared to a release of €0.1 million for the year ended 31 December 2022.

Depreciation, amortisation and impairment

Depreciation, amortisation and impairment increased by €4.6 million, or 13.4%, from €34.4 million for the year ended 31 December 2022 to €39.0 million for the year ended 31 December 2023. This increase was mainly related to the higher investments made by the Group.

Adjusted EBITDA

Adjusted EBITDA increased by €20.1 million, or 22.7%, from €88.7 million for the year ended 31 December 2022 to €108.9 million for the year ended 31 December 2023.

4. Liquidity and Capital Resources

The Irca Legacy principal sources of liquidity are (i) net cash flows from operating activities, (ii) existing bank loans and (iii) liquidity available under the revolving credit facility.

Consolidated Cash Flow

The following table sets forth the Group's consolidated cash flow statement for the year ended 31 December 2023 and for the period ended 31 December 2022 on a reported basis:

(in € thousands)	For the year ended 31 December 2023	For the period ended 31 December 2022
Net cash flows from/ (used in) operating activities	57,864	(5,752)
Net cash flows used in investing activities	(522,053)	(852,657)
Net cash flows from financing activities	492,048	918,764
Net cash flow for the period	27,859	60,355

For the year ended 31 December 2023 the Irca Group generated cash of €27.9 million (€60.4 million for the period ended 31 December 2022).

Net cash from operating activities amounted to €57.9 million (-€5.8 million for the period ended 31 December 2022) and was mainly driven by (i) cash generated from operating activities before changes in working capital of €110.7 million (ii) cash flows generated from movements in working capital of €30.7 million partially offset by (ii) income taxes paid of €10.4 million and (iii) finance expenses paid of €72.3 million. The cash absorbed by movements in working capital was mainly driven by an increase in inventories and payments made to suppliers.

Net cash used in investing activities amounted to € 522.1 million (€852.7 for the period ended 31 December 2022) and is mainly related to payments for acquisitions net of cash acquired and in particular mainly relates to (i) the payment for the acquisition of Sweet for €484.8 million and (ii) the payment for the acquisition of Ashanti for €0.6 million. Cash used in investing activities also includes €36.7 million related to the purchase of tangible and intangible assets and in particular related to i) the implementation of the ERP system in all the companies of the Group; ii) ii) new productions lines for improving and increasing the Group's production capacity (in particular the new production line for the production of dark creams and the dark chocolate and new packaging line in Italy and US, renovation and expansion of the factory in Vietnam and advances for chocolate and cream production lines, confectionary lines in France and new cooking line in UK which are expected to come into operation during the 2024).

Net cash generated from financing activities amounted to €492.0 million and is mainly related to:

―	Net proceeds from the additional issuance of the Unitranche Notes of €216.0 million, together with the proceeds arising from the capital increase of €178.8 million, which were used to finance the Sweet acquisition
―	Proceeds of €125.0 million related to the loan received as part of the Sweet acquisition;
―	Repayment of €34.2 million related to the revolving credit facility.

For the period ended 31 December 2022, net cash generated from financing activities amounted to €918.8 million and was mainly related to:

―	Net proceeds of €718.2 million from the issuance of the Unitranche Notes which were used to repay the Bridge Facility (for an original amount of €430 million) and certain existing indebtedness of the Irca Group in relation to the Irca Acquisition.
―	Proceeds from capital increase performed during the year for a total of €632.1 million mainly in relation to the Irca Acquisition partially offset by the repayment of medium-long term loans of the Irca Group for an amount of €329.1 million; and
―	dividend payments of €169.1 million.

Reclassified Statement of Financial Position

The following table sets forth the Group's reclassified statement of financial position at 31 December 2023 and 2022:

(in € thousands)	At 31 December 2023	At 31 December 2022 Restated ⁽¹⁾
Property, plant and equipment	221,912	106,162
Goodwill	1,047,097	869,555
Trademarks	118,459	106,792
Other intangible assets	339,479	164,314
Other non-current assets	147	130
Fixed assets	1,727,094	1,246,953
Inventories	135,130	81,582
Trade receivables	122,933	67,855
Trade payables	(167,220)	(65,849)
Other current and non-current payables, net	(40,927)	3,416
Net working capital	49,916	87,004
Deferred tax liabilities	(50,329)	(66,092)
Employee benefits	(3,694)	(2,618)
Provisions	(9,368)	(5,685)
Net capital employed	1,713,619	1,259,562
Shareholders' equity	(599,234)	(484,136)
Medium/long-term financial liabilities	(1,202,664)	(835,846)
Cash and cash equivalents, net	88,279	60,420
Net financial debt	(1,114,385)	(775,426)
Shareholders' equity and net financial debt	(1,713,619)	(1,259,562)

⁽¹⁾ The comparative data at 31 December 2022, have been restated in relation to the completion of the Purchase Price Allocation process of Irca S.p.A., Cesarin S.p.A. and Anastasi S.r.l., fully consolidated since 7 April 2022, July 2022 and October 2022, respectively.

Fixed assets amounted to €1,727.1 million at 31 December 2023 (€1,246.9 million at 31 December 2022) and are mainly related to goodwill for €1,047.1 million recognized in connection with the Irca Acquisition (€644.7 million) and, to a lesser extent, in relation to the Dobla Acquisition (€89.9 million), the Cesarin Acquisition (€46.2 million), the Anastasi Acquisition (€88.7 million) and the Sweet Acquisition (€176.7 million).

Net Working Capital at 31 December 2023 amounted to €49.9 million (€87.0 million at 31 December 2022).

Net financial debt at 31 December 2023 amounted to €1,114.3 million (€775.4 million at 31 December 2022) and mainly relates to obligations under the Unitranche notes (€993.4 million). The following table sets forth a breakdown of net financial debt at 31 December 2023 and 2022.

(in € thousands)	At 31 December 2023	At 31 December 2022
Unitranche notes	993,382	735,918
Revolving Credit Facility	-	34,808
Other borrowings from banks	25,476	22,606
Payable to Midco 2	129,805	-
Amounts due to factoring companies	37,954	29,483
Lease liabilities	18,950	13,031
Other financial receivables	(2,903)	-
Cash and cash equivalents	(88,279)	(60,420)
Net financial debt	(1,114,385)	(775,426)

Unitranche notes relates to (i) the Senior Secured Floating Rate Notes due 2029, entered into on 29 September 2022 by AI Tiramisù S.p.A., maturing on 29 September 2029, for a nominal amount of €750 million, subscribed with the purpose for fully repaying the Bridge Facility (€430 million senior secured bridge facility, issued and used by AI Tiramisù S.p.A. to partially finance the Irca Acquisition and to repay certain existing indebtedness of Irca Group) and the Additional Unitranche Facility 1 for a nominal amount of €225 million, subscribed for the purposes of the Sweet acquisition.

Revolving Credit Facility ("RCF") relates to a super senior €68 million multi-currency revolving credit facility entered into in July 2022 in the context of the Irca acquisition. During the year the RCF line was totally reimbursed (€34 million).

Payable to Midco 2 relates to a loan received from Midco 2 in relation to the Sweet acquisition.

Amounts due to factoring companies are related to trade receivables sold under factoring agreements for which the risk of collection remains with the Group.

5. Quantitative and Qualitative Disclosures about Market Risk

The Group is exposed to market risk (exchange rate risk and interest rate risk), credit risk and liquidity risk and has the objective to maintain a balanced approach to managing its financial exposure by matching assets and liabilities and achieving operational flexibility through the use of liquidity generated by current operating activities and bank loans. A description of the risks as well as mitigating actions is provided in Note 3 to the Consolidated Financial Statements.

6. Sustainability

During the fiscal year 2023, the Group defined, for the first time, a strategic sustainability plan, identifying the strategic areas of impacts and the medium-long term objectives, with Key Performance Indicators (KPIs) to be achieved by 2025 and 2028. Leveraging existing best practices and initiatives, this plan is built on three pillars:

―	Healthier Indulgence & Wellbeing Options - to provide alternative options to customers and consumers and address specific nutritional needs or lifestyles, with a focus on people's health and wellbeing;
―	People Company - places people at the centre of the strategy and training as a key factor for success, with initiatives aimed at fostering employee growth, promoting diversity and inclusion, and investing in communities; and
―	Smart, Sustainable Solutions - to invest in operational processes and reduce the environmental impact of activities, working on efficiency, innovation, and supply chain sustainability.

With these actions, the Group intends to responsibly play its role within the ongoing process of global transformation, so that it can make the necessary contribution to the identification of useful solutions for the people who work in the Group, for the communities in the territory where it operates and, more generally, for the well-being of our planet.

Additionally, in December 2023, the first sustainability report was published, serving as a tool to periodically report on sustainability objectives and performance and initiate constructive dialogue with all relevant stakeholders, aiming towards common goals.

7. Research and Development

In 2023, among other things, the Group arranged to:

―	continue the development of high-value-added products, expanding beyond Vegan, Better for you, Dairy Free, and Sugar Reduced options to include the study and proposal of chocolates, compounds, and creams with high protein content tailored for Healthy Diet and sports enthusiasts (such as Protein Bars, etc.);
―	manage and develop requests for new products from the sales area;
―	reformulation of Fruit Jams and Fillings, which will be produced entirely by Cesarin in the future using new technology.

The above activities were managed by a multidisciplinary team composed of people from marketing, production and quality.

8. Own Shares

During 2023, the Company did not acquire any own shares.

9. Human Resources

During 2023, there were no fatalities or serious accidents in the workplace that entailed serious injuries to employees. Nor were any charges reported in respect of occupational illness, regarding employees or ex-employees, or mobbing for which the Group has been found to be liable.

10. Environment

During 2023, no sanctions or penalties were imposed on the Group for environmental offences or damages and there are no pending lawsuits in this respect.

11, Outlook

These Consolidated Financial Statements have been prepared on a going concern basis, as management has confirmed the absence of financial, operational or other indicators that may suggest an inability on the part of the Group to meet its obligations in the foreseeable future and, in particular, during the 12 months following the reporting date. In reaching such a conclusion, management gave due consideration to the financial results of the Group for the first two months of 2024 which show an increase in revenues mainly driven by increased prices compared to the same period in 2023. In addition, liquidity remains healthy at Group level.

Luxembourg, 22 April 2024

Bart De Geyndt, Member of the Board of Directors of AI Tiramisù MidCo 3 S.a.r.l.

Federica Boleso, Member of the Board of Directors of AI Tiramisù MidCo 3 S.a.r.l.

Consolidated Financial Statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(In € thousand)	Note	For the year ended 31 December 2023	For the period from 7 April 2022 to 31 December 2022 Restated ⁽¹⁾
Revenues	6.1	918,646	242,266
Other income	6.2	2,877	1,423
Total revenues and other income		921,523	243,689
Cost of raw materials, consumables and goods for resale	6.3	(548,703)	(154,204)
Cost of services	6.4	(130,319)	(35,934)
Personnel expenses	6.5	(124,433)	(26,926)
Release/ (Impairment) of provision for financial assets	6.6	(1,447)	402
Depreciation, amortisation and impairment	6.7	(57,112)	(16,162)
Other operating costs	6.8	(7,671)	(1,018)
Total operating costs		(869,685)	(233,842)
Operating profit		51,838	9,847
Finance income	6.9	3,780	20,941
Finance expenses	6.9	(123,154)	(38,891)
Change in fair value of derivatives		(1,130)	(349)
Exchange gain/ (losses)		(2,530)	459
Profit before tax		(71,196)	(7,993)
Income tax expense	6.10	9,191	(425)
Net profit (loss) for the period (A)		(62,005)	(8,418)
Net Profit (loss) for the period attributable to the group		(62,005)	(8,418)
Net Profit (loss) for the period attributable to minority interests		-	-
Other comprehensive income:
a) Items that will not be reclassified to profit or loss
Actuarial gains and losses on employee benefit liabilities (net of tax)		(401)	249
b) Items that may be reclassified to profit or loss
Changes in foreign exchange reserve		(1,271)	(787)
Total other comprehensive income (B)		(1,672)	(538)
Total comprehensive income for the period (A)+(B)		(63,677)	(8,956)
Total comprehensive income for the period attributable to the group		(63,677)	(8,956)
Total comprehensive income for the period attributable to minority interests		-	-

⁽¹⁾ The financial information for the period ended 31 December 2022 has been restated in relation to the completion of the Purchase Price Allocation for the acquisitions of Irca S.p.A., Cesarin S.p.A. and Anastasi S.r.l.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		As at 31 December
(In € thousand)	Note	2023	2022 ⁽¹⁾
ASSETS
Non-current assets
Goodwill	7.1	1,047,097	869,555
Trademarks	7.2	118,459	106,792
Other intangible assets	7.3	339,479	164,314
Property, plant and equipment	7.4	221,912	106,162
Investments		32	59
Other non-current assets	7.7	115	71
Total non-current assets		1,727,094	1,246,953
Current assets
Inventories	7.5	135,130	81,582
Trade receivables	7.6	122,933	67,855
Tax receivables		2,627	911
Financial assets measured at fair value	4.1	193	366
Other current assets	7.7	28,145	20,230
Cash and cash equivalents	7.8	88.279	60.420
Total current assets		377.307	231,364
TOTAL ASSETS		2,104,401	1,478,317
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity
Share capital	7.9	1,302	1,302
Reserves	7.9	659,937	491,252
Net profit (loss) for the period attributable to the Group	7.9	(62,005)	(8,418)
Total shareholders' equity		599,234	484,136
Shareholders' equity attributable to minority interests		-	-
Total consolidated shareholders' equity		599,234	484,136
Non-current liabilities
Non-current financial liabilities	7.10	1,120,809	767,748
Deferred tax liabilities	7.11	50,329	66,092
Employee benefits	7.12	3,694	2,618
Provisions for risks and charges	7.13	9,368	5,685
Other non-current liabilities	7.14	13,147	-
Total non-current liabilities		1,197,347	842,143
Current liabilities
Trade payables		167,220	65,849
Current financial liabilities	7.10	89,199	68,098
Tax liabilities		6.055	-
Financial liabilities measured at fair value	4.1	1,551	524
Other current liabilities	7.14	43,795	17,567
Total current liabilities		307,820	152,038
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		2,104,401	1,478,317

⁽¹⁾ The financial information for the period ended 31 December 2022 has been restated in relation to the completion of the Purchase Price Allocation for the acquisitions of Irca S.p.A., Cesarin S.p.A. and Anastasi S.r.l.

CONSOLIDATED STATEMENT OF CASH FLOWS

(In € thousand)	For the year ended 31 December 2023	For the period from 7 April 2022 to 31 December 2022 Restated ⁽¹⁾
Profit before tax	(71,196)	(7,993)
Adjustments to reconcile profit before tax to net cash flows:
Depreciation, Amortization and Impairment of intangible assets and property, plant and equipment	56,588	16,162
Provisions for risks and charges and employee benefits	1,253	382
Provision for obsolete inventory	2,147	552
Provision/(Release) for doubtful trade receivables	1,447	(402)
Gain on prepayment bridge loan	-	(19,350)
Net finance (income)/expenses	119,374	37,300
Change in fair value of financial assets and liabilities	1,130	349
Cash flow from operating activities before changes in net working capital	110,743	27,000
Working capital adjustments:
- Decrease/ (increase) in inventories	4,558	(3,409)
- Decrease/ (increase) in trade receivables	(56,717)	11,051
- (Decrease)/increase in trade payables	90,458	(14,891)
- Decrease/ (increase) in other receivables & payables	(7,627)	(6,800)
Cash flow from changes in net working capital	30,672	(14,049)
Income taxes paid	(10,419)	(11,102)
Finance income/ (expenses) collected/(paid)	(72,308)	(7,537)
Employee / Agents benefits/Other provision paid	(824)	(64)
Cash flow from/(used in) operating activities (A)	57,864	(5,752)
Cash flow from/ (used in) investing activities
Payment for acquisition of the IRCA Group, net of cash acquired	-	(683,720)
Payment for acquisition of Cesarin SpA, net of cash acquired	-	(57,748)
Payment for acquisition of Anastasi Srl and 2Aemme Srl, net of cash acquired	-	(104,217)
Payment for acquisition of Sweet business, net of cash acquired	(484,774)	-
Payment for acquisition of Ashanti, net of cash acquired	(585)	-
Net (payments for)/proceeds from (purchase)/sale of tangible and intangible assets	(36,694)	(6,972)
Cash flow from/(used in) in investing activities (B)	(522,053)	(852,657)
Cash flow from/ (used in) financing activities
Proceeds from bridge loan	-	430,000
Repayment of bridge loan (including prepayment fees)	-	(424,622)
Proceeds from RCF	-	72,000
Repayment of RCF	(34,200)	(37,800)
Proceeds from Unitanche	216,000	718,201
Proceeds from Midco 2	125,000	-
Proceeds from short term loan	5,181	-
Repayment of medium-long term loan	(2,889)	(329,088)
Repayment of short-term loan	321	-
Proceeds from factor	8,471	29,483
Dividends paid	-	(169,104)
Capital increase	178,775	632,131
Change in lease liabilities	(4,611)	(2,437)
Cash flow from/ (used in) financing activities (C)	492,048	918,764
Net cash flow (A)+(B)+(C)	27,859	60,355
Cash and cash equivalents at the beginning of the period	60,420	65
Cash and cash equivalents at the end of the period	88,279	60,420

⁽¹⁾ The financial information for the period ended 31 December 2022 has been restated in relation to the completion of the Purchase Price Allocation for the acquisitions of Irca S.p.A., Cesarin S.p.A. and Anastasi S.r.l.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(In € thousand)	Share capital	Share premium reserve	Reserves	Net profit (loss) for the period	Total shareholders' equity attributable to the Group	Shareholders' equity attributable to minority interests	Total shareholders' equity
At the incorporation date (7 April 2022)	65	-	-	-	65	-	65
Net profit (loss) for the year	-	-	-	(8,418)	(8,418)	-	(8,418)
Other comprehensive income	-	-	(538)	-	(538)		(538)
Total comprehensive income for the period	-	-	(538)	(8,418)	(8,956)	-	(8,956)
Capital increase	1,237	630,894	-	-	632,131	-	632,131
Capital contribution	-	30,000	-	-	30,000	-	30,000
Distribution of reserve	-	-	(169,104)	-	(169,104)	-	(169,104)
At 31 december 2022 ⁽¹⁾	1,302	660,894	(169,642)	(8,418)	484,136	-	484,136
Net profit (loss) for the year	-	-	-	(62,005)	(62,005)	-	(62,005)
Other comprehensive income	-	-	(1,672)	-	(1,672)	-	(1,672)
Total comprehensive income for the period	-	-	(1,672)	(62,005)	(63,677)	-	(63,677)
Capital increase	-	178,775	-	-	178,775	-	178,775
Net profit (loss) for the previous year	-	-	(8,418)	8,418	-	-	-
At 31 december 2023	1,302	839,669	(179,732)	(62,005)	599,234	-	599,234

⁽¹⁾ The financial information for the period ended 31 December 2022 has been restated in relation to the completion of the Purchase Price Allocation for the acquisitions of Irca S.p.A., Cesarin S.p.A. and Anastasi S.r.l.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 GENERAL INFORMATION

1.1 Background

AI Tiramisu (Luxembourg) Midco 3 S.à r.l. (hereinafter "Midco 3'' or the "Company" and together with its subsidiaries the "Group") is the holding entity of the Group which directly controls AI Tiramisu (Luxembourg) Midco 4 S.à r.l. (collectively the "Holding Companies"). The Group is one of Europe's main producers of ingredients for artisan pastry, bread and ice cream and chocolate decorations.

Midco 3 is a private limited company incorporated and domiciled in Luxembourg, with registered office in rue 124 boulevard de la Petrusse.

The Company was established on 7 April 2022. On 14 July 2022 AI Tiramisù S.p.A.("Tiramisù"), an indirect subsidiary of the Company, completed the acquisition of the entire share capital of Irca S.p.A. (the "Irca Acquisition"). At the acquisition date, Irca S.p.A. ("Irca") controlled Irca Distribuzione S.r.l ., Irca Spagna Corp S.L ., Dobla Beheer BV and its subsidiaries ("Dobla"). Following the Irca Acquisition, a group reorganisation was performed and Dobla was transferred to AI Tiramisu (Luxembourg) Midco 4 S.à r.l. On 27 September 2023, Tiramisù was merged with and into Irca (the "Merger"). The Merger was effective for accounting and tax purposes from 1 January 2023.

Founded in 1919 and headquartered in the northern Italian town of Gallarate, Irca is one of the world's leading B2B providers of semi-finished ingredients for artisanal chocolate, pastry and bakery products, with a strong platform to capture growth opportunities in the market for artisanal gelato ingredients. The Group design, manufacture, sell and distribute a wide range of high-quality ingredients, serving as a onestop shop for artisanal pastry chefs, bakers, gelato shops, large industrial producers of B2C products and other customers, covering everything needed to create finished products from base to decoration.

Following the Irca Acquisition, the Group has continued to consolidate its presence and integrated its value chain. In July 2022, Irca purchased the entire share capital of Agrinco Holding S.A. which entirely controlled Cesarin S.p.A. ("Cesarin "), the Italian leader in candle fruit, from the Cesarin family and, in October 2022, Irca acquired the entire share capital of Anastasi S.r.l. and 2Aemme S.r.l. (together "Anastasi"). Anastasi is a leading Italian food ingredients company specialised in the manufacturing of semi-finished pistacchio-based products.

On 27 March 2023 the Group finalised the purchase of the "Sweet Ingredients Portfolio" (the "Sweet") from Kerry Group (a world leading provider of taste and nutrition solutions for the food, beverage and pharmaceutical markets). The Sweet Ingredients Portfolio is a leading manufacturer of sweet and cereal-based products with a broad range of technological capabilities, primarily serving the end markets of bakery, cereal, confectionery, dairy and ice cream in Europe and the US. Its operational footprint covers four manufacturing facilities in the US (in Illinois, Kansas, Missouri, and California) (the "Sweet US"), and six facilities across the UK, the Netherlands, Germany and France (the "Sweet EMEA"). The portfolio incorporates a range of products spanning sweet particulates, chocolate confections, baked inclusions, variegates and fruit purées.

On 12 October 2023, Irca Group acquired Ashanti, International School of Pastry & Culinary Arts in Poland ("Ashanti"). The culinary school, founded in 2017, dedicated to professionals and food lovers, is based in Łódź, a city in central Poland. The school offers a wide range of training and workshops for pastry and culinary chefs, ice cream and bakers, bartenders, baristas, sommeliers, as well as companies.

In the last 6 years, it has trained approx. 8,000 professionals with its 41 contracted trainers, amongst them international and local leading experts in the culinary world.

At 31 December 2023, the Company's share capital, amounting to €1,302 thousand, is entirely held by the sole shareholder AI Tiramisu (Luxembourg) Midco 2 S.à r.l., which is indirectly controlled by Advent International L.P.

The consolidated financial statements as of for the year ended 31 December 2023 (the "Consolidated Financial Statement") were approved by the Company's Board of Directors on 22 April 2024.

2 SUMMARY OF ACCOUNTING POLICIES

The main accounting policies and criteria used in preparing and presenting the Consolidated Financial Statements are described below. Accounting policies have been adopted for the period presented in this document.

2.1 Basis of preparation

These Consolidated Financial Statements have been prepared in accordance with the IFRS® Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and adopted by the European Union ("EU-IFRS" or "International Accounting Standards") in effect as at the date of their approval. The designation "EU-IFRS" includes all "International Financial Reporting Standards", all "International Accounting Standards" (IAS), all interpretations of the "International Reporting Interpretations Committee (IFRIC)", formerly the "Standing Interpretations Committee (SIC)", endorsed and adopted by the European Union. Moreover, EU-IFRS have been adopted for the period presented in this document.

The Consolidated Financial Statements have been prepared:

•	on the basis of existing EU-IFRS. Any future developments and updates in interpretations will be reflected in future years, in accordance with guidance provided on a case-by-case basis by the relevant accounting standards;
•	on a going concern basis, as management has confirmed the absence of financial, operational or other indicators that may suggest an inability on the part of the Group to meet its obligations in the foreseeable future and, in particular, during the 12 months following the reporting date; and
•	on an historical cost basis, except in relation to the measurement of financial assets and liabilities that under IFRS must be recognised at fair value.

2.2 Form and content of the financial statements

The presentation currency of the Consolidated Financial Statements is Euro. Unless otherwise specified, all amounts in this document are presented in thousands of Euro..

The format of the consolidated financial statements and related classification criteria adopted by the Group, among the options available under IAS 1-Presentation of financial statements ("IAS 1") are as follows:

•	the consolidated statement of financial position, which classifies assets and liabilities based on whether they are current/non-current;
•	the consolidated statement of comprehensive income, which presents an analysis of expenses recognised in profit or loss using a classification based on the nature of expenses (IAS 1:99); and one statement of comprehensive income for the period being the total of profit or loss and other comprehensive income (IAS1:81A)
•	the consolidated statement of cash flow's, which is prepared using the indirect method.

The formats used are those considered to provide the best representation of the Group's results, financial position and cash flows.

The amendments to IAS 1, issued in February 2021, have impacted the disclosure of the Group's accounting policies, but not the measurement, recognition, or presentation of any item in the Group's financial statements.

2.3 Scope of consolidation and consolidation criteria

The Consolidated Financial Statements include the financial statements of the Company and its subsidiaries as approved by the respective boards of directors and prepared based on the accounting records of the individual companies, adjusted as necessary to align them with EU-IFRS. The following table provides, for each of the subsidiaries at 31 December 2023, a summary of the company name, registered office, share capital, currency, type of control, percentage share capital held directly or indirectly by the Company and consolidation method used.

Company name	Registered office	Principal activities	Functional currency	Type of control	Group percentage control	Consolidation method
Parent group companies:
AI Tiramisu (Luxembourg) Midco 3 S.à r.l.	124 boulevard de la Petrusse, Luxembourg	Holding	Euro	n.a.	n.a.	n.a.
Subsidiaries:
Al Tiramisu (Luxembourg) Midco 4 S.à r.l.	124 boulevard de la Petrusse, Luxembourg	Holding	Euro	Direct	100%	Full
Irca S.p.A.	Italy - Gallarate (VA)	Production/ Distribution	Euro	Indirect	100%	Full
Irca Distribuzione S.r.l.	Italy - Busto Arsizio (VA)	Distribution	Euro	Indirect	100%	Full
Irca Spagna Corp S.L.	Spain - Barcelona	Distribution	Euro	Indirect	100%	Full
Irca Moscow - representative office	Moscow	Representative office	Rublo	Indirect	100%	Full
Agrinco Holding S.A.	Switzerland - Roveredo	Holding	CHF	Indirect	100%	Full
Cesarin S.p.A. ^*	Italy-Montecchio di Crosara	Production/Distribution	Euro	Indirect	90%	Full
Anastasi S.r.l.	Italy-Bronte	Production/Distribution	Euro	Indirect	100%	Full
Dobla Beheer B.V. ^****	The Netherlands - Heerhugowaard	Holding	Euro	Indirect	100%	Full
Irca France	France-Nuelly-Sur-Seine	Food academy	Euro	Indirect	100%	Full
Dobla B.V. ^****	The Netherlands - Heerhugowaard	Holding	Euro	Indirect	100%	Full
Dobla Logistics B.V.B.A.	Belgium - Meer	Distribution	Euro	Indirect	100%	Full
Dobla Belgium Production N.V.	Belgium - Kessel	Production	Euro	Indirect	100%	Full
Dobla Asia Company Ltd.	Ba Ria Vung Tau - Vietnam	Production	Dong	Indirect	100%	Full
Dobla Chocolate Innovations Hong Kong Ltd.	Hong Kong	Distribution	Euro	Indirect	100%	Full
Irca Pty Ltd	Australia - Perth	Distribution	AUD	Indirect	100%	Full
Dobla Holding USA Inc.	USA - Dover	Holding	USD	Indirect	100%	Full
Dobla Group USA LLC	USA - Duluth	Distribution	USD	Indirect	100%	Full
Dobla Manufacturing USA LLC	USA - Duluth	Production	USD	Indirect	100%	Full
In2Food Gourmet LLC	USA - Duluth	Distribution	USD	Indirect	100%	Full
Irca MEA Trading LLC ^**	UAE - Dubai	Distribution	AED	Indirect	49%	Full
AI Charlie UK Bidco Limited ⁽¹⁾	UK - Pocklington, York	Holding	GBP	Indirect	100%	Full
IRCA Manufacturing UK Limited ⁽¹⁾	UK - Pocklington, York	Production/Distribution	GBP	Indirect	100%	Full
AI Charlie French Bidco SAS ⁽¹⁾	France- Anneyron	Holding	Euro	Indirect	100%	Full
IRCA Manufacturing France SAS ⁽¹⁾	France- Anneyron	Production/Distribution	Euro	Indirect	100%	Full
AI Charlie German Bidco GmbH ⁽¹⁾ ^***	Germany -Hochheim	Holding	Euro	Indirect	100%	Full
IRCA Manufacturing Germany GmbH ⁽¹⁾ ^***	Germany - Hochheim	Production/Distribution	Euro	Indirect	100%	Full
IRCA Manufacturing Netherlands BV ⁽¹⁾ ^****	Netherland - Tilburg	Production/Distribution	Euro	Indirect	100%	Full
AI Charlie Irish Bidco Limited ⁽¹⁾	Ireland - Dublin	R&D activities	Euro	Indirect	100%	Full
Irca Group USA LLC ⁽¹⁾	USA - Delaware	Production/Distribution	USD	Indirect	100%	Full
Guernsey Bel Inc. ⁽¹⁾	USA - Delaware	Production/Distribution	USD	Indirect	100%	Full
Ashanti Atelier S.p. Z.o.o. ⁽²⁾	Poland	Catering school	PLN	Indirect	100%	Full

⁽¹⁾ Entities established during 2023 in connection with the Sweet acquisition, see note 5.
⁽²⁾ Acquired during 2023. See Note 5
^* Cesarin S.p.A. has 208,000 own shares, representing 10% of share capital.
^** Fully consolidated without attribution of interests to third parties, in accordance with the accounting provisions in IFRS 10 - "Consolidated Financial Statements"
^*** In 2023 AI Charlie German Bidco GmbH and IRCA Manufacturing Germany GmbH, make use of disclosure exemptions pursuant to Section 264, paragraph 3 of the German Commercial Code (HGB) and thus refrain from preparing their annual financial statements for financial year 2023.
^**** In 2023 IRCA Manufacturing Netherlands BV, Dobla Beheer B.V. and Dobla B.V. make use of disclosure exemptions pursuant to article 2:403, of the Dutch Civil Code and thus refrain from preparing their annual financial statements for financial year 2023.

Other than in relation to the Sweet Acquisition and the acquisition of Ashanti, there have been no changes to the scope of consolidation or the Group's shareholdings compared to 2022.

The criteria adopted by the Group for the definition of the scope of consolidation and the consolidation principles are described below.

Subsidiaries

An investor controls an entity when it is: i) exposed, or is entitled to take part in, the variability of the related economic returns and ii) is capable of exercising its decision-making powers over significant activities of the entity in such a way as to influence these returns. The existence of control is verified each time the facts and/or circumstances indicate a change in one of the above-mentioned elements that qualify control. Subsidiaries are consolidated through the full consolidation method starting from the date that control was acquired and they cease to be consolidated from the date that control was transferred to third parties. The closing date of the financial statements of all the subsidiaries coincides with that of the Parent Company.

The principles adopted for line-by-line consolidation are as follows:

•

the assets, liabilities, revenues and expenses of the subsidiaries are consolidated on a line-by-line basis, attributing to the minority interests, where applicable, their share of equity and profit or loss for the year which are shown separately in equity and in the income statement;

•

gains and losses including any tax effects resulting from transactions between fully consolidated Group companies, which have not yet been realised with third parties at the end of the reporting period, are eliminated, other than losses that result from transactions involving a reduction in value of the asset transferred. Receivables and payables, costs and revenues and finance income and expenses between companies included in the scope of consolidation are also eliminated;

•

if the parent increases its shareholding in a subsidiary subsequent to assuming control, any difference between the acquisition cost and the corresponding share of equity acquired is recognised in equity attributable to owners of the Parent. In the same way, if the Parent reduces its shareholding in a subsidiary without a loss of control of the subsidiary, the effects are recognised in equity. If, on the other hand, as a result of the sale of shares in a subsidiary the Parent loses control, the following are recognised in the income statement:

(i)	any gains/losses, calculated as the difference between the consideration received and the corresponding share of net equity sold;
(ii)	the effects of remeasuring any remaining investment to its fair value;
(iii)	all amounts previously recognised in other comprehensive income in relation to the subsidiary over which control was lost. If, however, it is not foreseen that such amounts would be subsequently reclassified to the income statement, they are reclassified to "Reserves".

The new book value of any remaining investment is the fair value at the date of loss of control and this becomes the reference value for future measurement of the investment in accordance with relevant accounting standards.

Business combinations

Business combinations in which control is acquired are recorded as set out in IFRS 3, applying the acquisition method of accounting. Identifiable assets acquired and liabilities and contingent liabilities assumed are recognised at their fair value at the acquisition date, except for deferred tax assets and liabilities, assets and liabilities relating to employee benefits and assets held for sale, which are recognised on the basis of the relevant accounting principles. If positive, the difference between the acquisition cost and the fair value of the assets and liabilities acquired is recognised in intangible assets as goodwill; if negative, after reviewing the fair value measurements of the assets and liabilities acquired, it is recognised directly in the consolidated statement of comprehensive income as a gain. In the event that the values of the acquired assets and liabilities are initially determined on a provisional basis, they must be confirmed within a maximum period of twelve months from the acquisition date, based solely on information relating to facts and circumstances existing at the acquisition date. In the period when such values are finally determined, the provisional values are adjusted retrospectively. Transaction costs are recorded in the consolidated statement of comprehensive income when incurred.

Non-controlling interests as at the date of the acquisition may be measured at fair value or at the present ownership instruments' proportionate share in the recognised amounts of the acquirer's identifiable net assets. The choice of measurement method may be made on a transaction-by-transaction basis.

In addition to the fair value at the acquisition date of the assets transferred, the liabilities assumed, and any capital instruments issued for the purposes of the acquisition, the acquisition cost also includes contingent consideration, or that share of the cost, the amount and timing of which are contingent on future events. Contingent consideration is measured at fair value at the acquisition date; subsequent changes in fair value are recognised in the consolidated statement of comprehensive income if the contingent consideration is a financial asset or liability while, if the contingent consideration is classified as equity, the original amount is not remeasured and is recorded directly in equity when settled.

Common control transaction

Business combinations in which all the combining entities or businesses are ultimately controlled by the same party or parties, both before and after the transaction, are referred to as business combinations under common control. These combinations are not subject to regulation under IFRS 3 or any other IFRS standard. In the absence of specific accounting standards, an accounting policy meeting the requirements of IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors must be applied to ensure the provision of relevant and reliable information.

The accounting policy chosen to represent combinations under common control should accurately reflect the economic substance of the arrangement, regardless of its legal form. Economic substance serves as the primary consideration in determining the most appropriate method for accounting for such combinations. It involves evaluating the creation of added value and significant changes in cash flows related to the transferred net assets.

Additionally, it is essential to consider existing interpretations and guidance. Reference is made to the Preliminary Guidance on IFRS issued by the Association of Italian Auditors concerning the accounting treatment of business combinations involving entities under common control in both separate and consolidated financial statements.

The net assets transferred should be recognized at the same values as their carrying amounts in the financial statements of the acquired companies or, if available, at the values reported in the consolidated financial statements of the common controlling company. In this context, the Company has opted to base its valuation on the carrying amounts in the financial statements of the acquired companies in such cases.

2.4 Accounting policies and measurement criteria

The following paragraphs briefly describe the key accounting policies and measurement criteria adopted in preparing the Consolidated Financial Statements.

CURRENT AND NON-CURRENT ASSETS AND LIABILITIES

The Group classifies an asset as current when:

•	it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;
•	it holds the asset primarily for the purpose of trading;
•	it expects to realise the asset within twelve months after the reporting period; or
•	the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All assets that do not satisfy the conditions listed above are classified as non-current.

The Group classifies a liability as current when:

•	it expects to settle the liability in its normal operating cycle;
•	it holds the liability primarily for the purpose of trading;
•	the liability is due to be settled within twelve months after the reporting period; or
•	it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.

All liabilities that do not satisfy the conditions listed above are classified as non-current.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is measured at cost and recognised at purchase price or production cost including any directly attributable costs necessary to make the assets ready for use, net of any impairment. Borrowing costs directly attributable to the purchase, construction or production of tangible assets whose realisation requires periods of time longer than one year are capitalised and depreciated over the useful life of the asset to which they refer.

Costs incurred for maintenance and ordinary repairs are charged directly to the income statement when incurred. Costs related to the expansion, modernisation or improvement of owned or leased assets are capitalised to the extent that they meet the requirements to be classified as an asset or part of an asset. Assets recognised in relation to leasehold improvements are depreciated over the lease term, or over the specific useful life of the asset, whichever is shorter.

Property, plant and equipment is depreciated on a straight-line basis over the useful economic and technical life of individual assets, which is the estimated period over which the asset will be used by the Group. This period starts from the month in which the use of the asset begins or could have begun. When the asset includes several significant components with different useful lives, each component is depreciated separately. The value to be depreciated is represented by the book value reduced by the presumable net transfer value at the end of the asset's useful life. Land is not depreciated, even if purchased together with a building, nor are works of art, or tangible assets held for sale. Any changes to the depreciation plan, deriving from a revision of the useful life of a tangible asset, its residual value or the way in which the economic benefits of the asset are obtained, are recognised prospectively.

Depreciation methods and periods

Depreciation begins when the asset is available for use and is charged on a straight-line basis over its estimated useful life.

The estimated useful life of the various categories of property, plant and equipment is as follows:

	Estimated useful life (years)
Parking space	80
Buildings	33
Plant and machinery	16
Photovoltaic plants	33
Miscellaneous equipment	5
Vehicles	4
Vehicles for internal use	5
Cars	5
Standard office furniture and equipment	8
Electronic office equipment	5

The useful lives of items of property, plant and equipment are reviewed and, where necessary, updated at least at the end of each reporting period.

RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

In accordance with IFRS 16, a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The contract is then reassessed to determine whether it is, or contains, a lease only if the terms and conditions of the contract are changed.

For a contract that is, or contains, a lease, each lease component within the contract is accounted for as a lease separately from non-lease components of the contract, unless the Group applies the practical expedient in IFRS 16, paragraph 15. Under such practical expedient, the lessee may elect, by class of underlying asset, not to separate non-lease components from lease components, and instead account for each lease component and any associated non-lease components as a single lease component. The Group has adopted this expedient for the leasing of motor vehicles.

The lease term is the non-cancellable period of a lease, together with both:

•	periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and
•	periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option.

In assessing whether a lessee is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, an entity shall consider all relevant facts and circumstances that create an economic incentive for the lessee to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The lessee shall revise the lease term if there is a change in the non-cancellable period of a lease.

At the commencement date, the Group recognises a right-of-use asset and a lease liability.

At the commencement date, the right-of-use asset is measured at cost. The cost of the right-of-use asset comprises:

a)	the amount of the initial measurement of the lease liability;
b)	any lease payments made at or before the commencement date, less any lease incentives received;
c)	any initial direct costs incurred by the lessee; and
d)	an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories.

The lessee incurs the obligation for those costs either at the commencement date or as a consequence of having used the underlying asset during a particular period.

At the commencement date, the lessee measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments included in the measurement of the lease liability comprise the following:

a)	fixed payments, less any lease incentives receivable;
b)	variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
c)	amounts expected to be payable by the lessee under residual value guarantees;
d)	the exercise price of a purchase option if the lessee is reasonably certain to exercise that option;
e)	payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

Lease payments are discounted to their present value using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee is required to use its incremental borrowing rate (the rate of interest it would have to pay to borrow a similar sum over a similar term as the lease contract).

Following initial recognition, the right-of-use asset is measured applying a cost model:

a)	less any accumulated depreciation and any accumulated impairment losses; and
b)	adjusted for any remeasurement of the lease liability.

Following initial recognition, the lease liability is measured by:

a)	increasing the carrying amount to reflect interest on the lease liability;
b)	reducing the carrying amount to reflect the lease payments made; and
c)	remeasuring the carrying amount to reflect any reassessment or lease modifications , or to reflect revised in-substance fixed lease payments.

In the event of a lease modification that is not accounted for as a separate lease, the right-of-use asset is remeasured (up or down) in line with the change in the lease liability at the modification date. The lease liability is remeasured based on the new contract conditions, using the discount rate at the effective date of the modification.

The Group has elected to exploit two exceptions permitted by IFRS 16, regarding short-term leases (leases that, at the commencement date, have lease terms of 12 months or less) and leases for which the underlying asset is of low value (leases for which the underlying asset value, when new, is less than USD 5,000). In such cases the right-of-use assets and related lease liabilities are not recognised, and lease payments are charged directly to the income statement.

INTANGIBLE ASSETS

Intangible assets include identifiable assets without physical substance that are controlled by the Group and expected to produce future economic benefits, as well as goodwill arising on business combinations. The requirement that such assets be identifiable is normally satisfied when an intangible asset is:

•	based on a legal or contractual right; or
•	separable, in the sense that it may be separately sold, transferred, leased or exchanged.

Control over an intangible asset consists of the right to make use of the future economic benefits deriving from the asset and the ability to limit such access to others. Internally generated goodwill is not recognised as an asset, nor are intangible assets recognised in relation to research (or the research phase of an internal project).

An intangible asset arising from development - or from the development phase of an internal project shall be recognised if, and only if, the following can be demonstrated:

•	the technical feasibility of completing the intangible asset so that it will be available for use or sale;
•	the intention to complete the intangible asset and use or sell it;
•	the ability to use or sell the intangible asset;
•	how the intangible asset will generate probable future economic benefits: among other things, the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;
•	the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset;
•	ability to reliably measure the expenditure attributable to the intangible asset during its development.

In application of the above criterion, the Group recognises research expenses in the income statement in the period in which they are incurred. Development costs incurred by the Group are capitalised only if the technical and commercial feasibility of the related development and sales activities is clearly determined and proven. If both regulatory and product development uncertainties remain significant, the Group recognises development costs in the income statement in the year they are incurred.

Intangible assets are initially recognised at acquisition or production cost, including costs directly attributable to making the asset ready for use. All other subsequent costs are charged directly to the consolidated statement of comprehensive income in the year incurred. Research costs are recognised in the consolidated statement of comprehensive income as they are incurred.

The most significant intangible assets held by the Group are as follows:

(a) Goodwill

Goodwill is recognised as an intangible asset with an indefinite useful life. It is initially measured at cost, as previously described, and subsequently tested for impairment at least annually to identify if goodwill is impaired (see the following paragraph "Impairment of goodwill, tangible and intangible assets with a finite useful life"). Impairment losses recognised for goodwill may not be reversed in subsequent periods.

(b) Intangible assets with a finite useful life (trademarks, recipes, software and development activities)

Intangible assets with a finite useful life are recognised at cost, net of accumulated amortisation and impairment losses, if any.

Amortisation starts when the asset is available for use and is charged systematically over the residual estimated useful life; for details regarding amounts to be amortised and the recoverability of the recognised values of such assets, see the paragraphs on Property, plant and equipment and Impairment of goodwill, tangible and intangible assets with a finite useful life respectively.

The estimated useful life for the various classes of intangible assets is as follows:

	Estimated useful life (years)
Trademark	30
Customer list	11/20
Recipes	10
Software	3
Development costs	5

IMPAIRMENT OF GOODWILL, TANGIBLE AND INTANGIBLE ASSETS WITH A FINITE USEFUL LIFE

(a) Goodwill

As noted above, goodwill is tested for impairment annually or more frequently, whenever events or changes in circumstances indicate that goodwill may be impaired, in accordance with IAS 36 (Impairment of assets). Impairment tests are normally performed at each year end and therefore the reference date for such tests is the financial reporting date.

Impairment tests are carried out for each cash-generating unit ("CGU") to which goodwill has been allocated. An impairment loss on goodwill is recognised when the CGU's carrying amount exceeds its recoverable amount. The recoverable amount of a CGU is the higher of its fair value less costs of disposal and its value in use, being the present value of estimated future cash flows; in calculating the value in use, the estimated future cash flows are discounted to present value using an after-tax discount rate, that reflects current market assessments of the time value of money and the risks specific to the asset. If the impairment loss is higher than the carrying amount of goodwill allocated to the CGU, the excess is applied to the other assets of the CGU in proportion to their carrying amount. The carrying amount of an asset should not be reduced below the highest of:

•	the fair value of the assets less costs of disposal;
•	the value in use.

Impairment losses recognised for goodwill may not be reversed in subsequent periods even if the conditions that gave rise to such impairment loss cease to exist.

(b) Tangible and intangible assets with a finite useful life

At each reporting date, the Group assesses whether there are any indications of impairment of tangible and intangible assets with a finite useful life. Both internal and external sources of information are used for this purpose. Considerations based on the former (internal sources of information) include obsolescence or physical damage, significant changes in the use of the asset and the economic performance of the asset compared to estimated performance. Considerations based on the latter (external sources of information) include the market value of the asset, changes in technology, markets or laws, trends in market interest rates and the cost of capital used to evaluate investments.

When indicators of impairment exist, the recoverable amount is estimated and the carrying amount of the asset reduced accordingly, with the impairment loss being charged to the income statement. The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use, where value in use is determined by discounting the asset's estimated future cash flows including, if materially significant and reasonably certain, those relating to disposal of the asset at the end of its useful economic life, less any costs of disposal. In calculating the value in use, the estimated future cash flows are discounted to present value using an after-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For assets that do not generate cash inflows that are largely independent of those from other assets or groups of assets, the Group estimates the recoverable amount of the CGU to which the asset belongs.

If the carrying amount of an asset or the CGU to which it belongs exceeds the recoverable amount, an impairment loss is recognised in the income statement. Such impairment losses are allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to other assets of the unit in proportion to their carrying amounts, while respecting their relative recoverable amounts. If the conditions that gave rise to an impairment loss no longer exist, the asset is revalued to the revised estimate of its recoverable amount, up to the value that would have been recorded, net of amortisation, had no impairment loss been recognised, with the increase being recognised in the income statement.

FINANCIAL ASSETS

The classification of a financial asset is based on the Group's business model for managing the related financial assets and their contractual cash flows. The Group considers whether the contractual cash flows represent solely payments of principal and interest that are consistent with a basic lending arrangement. Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related financial assets are classified and measured at fair value through profit and loss.

The Group initially measures a financial asset at its fair value plus transaction costs, in the case of a financial asset not at fair value through profit or loss. Measurement subsequent to initial recognition is based on the classification of the financial assets into one of the following categories:

(i) Financial assets at amortized cost;

(ii)Financial assets at fair value through other comprehensive income/(loss), with subsequent recycling of cumulative gains and losses to the statement of profit and loss ("FVOCI"); or

(iii) Financial assets at fair value through profit and loss ("FVPL").

Financial assets are derecognized when the rights to receive cash flows from the instrument have expired and the Group has transferred substantially all risks and rewards of ownership.

Financial assets measured at amortized cost

This category includes financial assets that meet the following requirements: (i) the financial asset is held within a business model whose objective is to hold financial assets to collect their contractual cash flows; and (ii) the contractual terms of the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.

Financial assets at fair value through consolidated profit or loss (FVTPL)

Financial assets at fair value through profit or loss are recorded in the statement of financial position at fair value with net changes in fair value recognized in the statement of profit or loss. This category includes financial assets not classified in any of the previous categories and derivative instruments and equity investments which the Group has not irrevocably elected to classify at fair value through OCI.

IMPAIRMENT OF FINANCIAL ASSETS

In accordance with the provisions of IFRS 9, the Group applies the expected credit loss model to assess the recoverability of financial assets. This model is based on a predictive approach, which involves comparing the contractual cash flows due in accordance with the contract with all the cash flows the Group expects to receive, discounted at the original effective interest rate.

Considering the financial assets held by the Group, the measurement model described is applied by the Group to trade and other receivables.

For trade receivables, the Group adopts a simplified approach, which does not require the recognition of periodic changes in credit risk, but rather the recognition of an Expected Credit Loss ("ECL") calculated over the entire life of the receivable (the lifetime ECL).

In particular, the policy implemented by the Group involves the stratification of trade receivables into categories based on days past due and an assessment of the counterparty's solvency. Different impairment percentages are applied to these categories, reflecting the relative recovery expectations.

Other receivables, for which the Group estimates a low credit risk, are measured using a general approach. This approach involves estimating the ECL with reference to a time horizon of 12 months and checking for changes in credit risk with respect to the initial assessment at each balance sheet date. Regarding receivables for which no significant increases in credit risk are identified, the ECL continues to be assessed over a 12-month horizon. With respect to receivables for which significant increases in credit risk are detected, the ECL is measured over the entire life of the receivable.

The value of receivables is shown in the statement of financial position net of the related provision for doubtful accounts.

Write-downs made in accordance with IFRS 9 are recognised in the consolidated income statement net of any positive effects related to releases or reversals of impairment and are presented under the heading "Impairment of financial assets".

INVENTORIES

Inventories are stated at the lower of purchase or production cost and net realisable value, which is the amount the Group expects to obtain from their sale in the ordinary course of business. The cost of inventories is determined by applying the average method.

Inventories of raw materials and semi-finished products that are no longer usable in the production cycle and inventories of finished products that cannot be sold are written down based on market trends and their presumed loss of value due to their obsolete or slow-moving nature.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash, demand deposits, and financial assets with an original maturity of period or less that are readily convertible to cash and subject to an insignificant risk of changes in value.

EMPLOYEE SEVERANCE INDEMNITY (TFR)

The employee severance indemnity due to employees in accordance with Article 2120 of the Italian Civil Code ("TFR") is considered a defined-benefit plan. Under such plans, the amount of the benefit is only quantifiable following termination of the employment relationship and is dependent upon factors such as age, length of service and level of remuneration; for this reason, the costs charged to the income statement for a given year are determined by actuarial calculation. The liability recognised for defined benefit plans corresponds to the present value of the obligation at the reporting date. The obligations under defined-benefit plans are determined each year by an independent actuary, using the projected unit credit method. The present value of defined-benefit plans is determined by discounting future cash flows at an interest rate equal to high-quality corporate bonds issued in Euro which reflect the period of the relevant defined benefit plan. The actuarial gains and losses deriving from adjustments in the total liability and the effect of changes in the actuarial assumptions are recognised in the statement of comprehensive income.

With effect from 1 January 2007, the 2007 Budget Law, and related decrees implementing the law, introduced significant changes to the TFR regulations, including the option for each employee to choose the destination of the accruing indemnity. Specifically, employees may now allocate new TFR flows to alternative external pension plans or elect for them to be paid into the treasury fund set up by INPS. If an external pension plan is chosen, the company is only obliged to make defined contributions to such plan and, accordingly, from the aforementioned date, the related new TFR flows are deemed to be payments to a defined contribution plan not subject to actuarial valuation.

SHARE-BASED PAYMENTS

The cost of services rendered by directors and employees that are remunerated through share-based compensation plans and settled with the assignment of securities is determined on the basis of the fair value of the rights granted, measured at the assignment date. The calculation method for determining fair value at the assignment date takes into account all the various characteristics (vesting period, possible exercise price and conditions, etc.) of the rights and of the security to which the plan relates. The cost of such plans is recognised in the income statement, under "Personnel expenses", with a balancing entry in shareholders' equity, over the vesting period of the rights granted, based on the best estimate of those that will become exercisable.

PROVISIONS

Provisions for risks and charges are recorded to cover costs and liabilities whose existence is certain or probable but which at the end of the reporting period are uncertain as to amount or as to the date on which they will arise. Provisions are recognised only when:

•	there is a current (legal or constructive) obligation for a future outflow of resources deriving from a past event;
•	it is likely that the outflow of resources required to satisfy the obligation is significant; and
•	the amount of the obligation can be estimated reliably.

Provisions are based on best estimates at the reporting date of the present value of the expenditure required to extinguish the obligation or transfer it to third parties. If the time value of money is material and the payment date of the obligations can be reasonably estimated, provisions are calculated as the present value of the expected cash flows, taking into account the risks associated with the obligation. Increases in the amount of the provision due to changes in the time value of money are recognised as "Finance expenses" in the income statement.

Provisions are adjusted periodically to reflect changes in estimated costs, timing and discount rates. Changes to estimates are recognised in the income statement in the same account as the original provision.

PAYABLES

Trade payables and other payables are initially recognised at fair value and subsequently measured using the amortised cost method.

Payables to banks and other lenders are initially recognised at fair value, net of directly attributable transaction costs, and later are measured at amortised cost, using the effective interest rate method. If there is a change in the estimate of the expected cash flows, the value of the liability is recalculated to reflect such change based on the present value of the new expected cash flows and the internal effective interest rate as calculated initially. Payables to banks and other lenders are classified as current liabilities, unless the Group has an unconditional right to postpone payment for at least twelve months after the reference date.

Payables are derecognised when settled and when the Group has transferred all risks and the charges related to the instrument.

DERIVATIVE FINANCIAL INSTRUMENTS

A derivative is a financial instrument or other contract:

•	whose value changes in response to changes in a defined underlying variable, such as an interest rate, price of a security or commodity, foreign currency exchange rate, index of prices or rates, credit rating or another variable;
•	that requires an initial net investment of zero, or less than would be required for contracts with a similar response to changes in market conditions;
•	that is settled at a future date.

All derivative financial instruments are measured at fair value, as required by IFRS 9.

The Group makes use of derivative financial instruments to mitigate its exposure to interest rate risk. However, the conditions required for the application of hedge accounting are not met and, therefore, in accordance with IFRS 9, the change in fair value of derivative instruments from one year to the next is recognised in the income statement.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of financial instruments is determined in accordance with IFRS 13 "Fair value measurement". Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place in the principal market for the asset or liability (i.e. the market with the highest number of transactions involving sale of such assets or transfer of such liabilities). In the absence of a principal market, it is assumed that the transaction takes place in the most advantageous market for the asset or liability to which the Group has access (i.e. the market most likely to maximise the price at which the asset can be sold or minimise the cost at which the liability can be transferred).

The fair value of an asset or liability is determined, using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. Market participants are independent, informed buyers and sellers, able and willing but not obliged to enter into transactions.

In determining fair value, the Group considers the characteristics of specific assets and liabilities and in measuring the fair value of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. Fair value measurement of assets and liabilities is based on the use of appropriate valuation techniques applied to available data, maximising the use of relevant observable inputs.

IFRS 13 establishes a fair value hierarchy that categorises the inputs to valuation techniques used to measure fair value into three levels:

•	Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date;
•	Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g. for derivatives, exchange rates published by the Bank of Italy, interest rates and yield curves, implied volatilities, credit spreads based on CDS data etc.);
•	Level 3 inputs are unobservable inputs for the asset or liability (management assumptions regarding financial flows, risk-adjusted spreads etc.).

REVENUES AND COSTS

Revenue is recognised in accordance with IFRS 15 "Revenue from Contracts with Customers" ("IFRS 15"). In accordance with IFRS 15, revenues are recognized when control over a product or service is transferred to the customer. Due to the nature of the business revenues are recognized at point in time. Revenues are measured at the transaction price, which is based on the consideration that the Group expects to receive in exchange for the transfer of the promised goods and services to the customer. The transaction price includes the estimate of the variable consideration for the portion for which it is considered probable that a significant reversal of the recognized revenues will not occur.

Costs are recognised when they relate to goods or services sold or used in normal business activities; they are recognised either based on systematic allocation or when such goods and services have no further use.

GRANTS

Government grants are recognized when it is reasonably certain that i) the Group will comply with the conditions set for their payment and ii) the grants will be received. The Group presents the contributions relating to energy and gas as a reduction of the related cost, while the other contributions (mainly relating to the 4.0 transition) under the item "other revenues".

FINANCIAL INCOME AND EXPENSES

Finance income and expenses are recognised during the period to which they relate.

INCOME TAX EXPENSE

Income taxes are based on an estimate of the tax expense for the year, based on current fiscal legislation, and are recognised in the income statement under "Income tax expense", except in those cases where the tax effects of transactions are recognised directly in equity and the related amounts are charged or credited directly to equity. The consolidated statement of comprehensive income reports income taxes relating to each line item reported under "Other items that will not be classified to profit or loss". Provision for taxes due on the transfer of non-distributed profits of subsidiaries is made only when a real intention to transfer such profits exists.

Deferred tax assets and liabilities are calculated using the balance sheet liability method and are recognised on temporary differences between the carrying amount of an asset or a liability in the consolidated financial statements and its tax base, except for non-deductible goodwill and for those differences related to investments in subsidiaries when the reversal is under the control of the Group and it is probable that they will not reverse in the reasonably foreseeable future. Deferred tax assets, including those relating to unused tax losses carried forward, are recognised to the extent to which it is probable that future taxable profit will be available against which they can be utilised. Tax assets and liabilities are offset, separately for current and deferred taxes, when the income taxes are levied by the same tax authority, there is a legally enforceable right of offset and it is expected that the balance will be settled net. Deferred tax assets and liabilities are computed based on tax rates that are expected to apply in the period in which the asset is recovered or settled to the extent that such rates have been approved at the date of the consolidated financial statements.

Pillar Two, also known as the global minimum tax or GloBE, introduces a minimum effective tax rate of 15%. This rate is calculated based on specific rule sets and applies to multinational enterprises (MNEs) with global revenues exceeding €750 million. The goal of GloBE is to ensure that MNEs pay a minimum tax rate on their income within each jurisdiction where they operate.

On 22 December 2022, the European Union adopted the Directive 2022/2523, known as "EU Pillar Two Directive", which transposes the OECD's GloBE anti-base erosion rules within the EU. On 20 December 2023, the Luxembourg Parliament voted to approve the Pillar Two law transposing the EU Pillar Two Directive into Luxembourg law. The law entered into force from fiscal years starting on or after 31 December 2023. The scope of application is aligned with the EU Pillar Two Directive, in particular the rules would apply to multinational groups ("MNE groups") or large-scale domestic groups with a presence in Luxembourg through a "constituent entity" provided that the group has an annual revenue of EUR 750,000,000 or more in at least two of the four fiscal years preceding the tested fiscal year, as per the consolidated financial statements of the group parent entity.

Pillar Two rules for the Group are expected to be applicable starting from fiscal year 2025. The management of the Group is working on analysis of the relevant documentation in order to be ready for fiscal year 2025.

UNCERTAINTY OVER INCOME TAX TREATMENTS

In determining uncertainty, it must be considered whether a particular tax treatment will be acceptable to the tax authority. If it is considered probable that the tax authority will accept the tax treatment (where 'probable' is taken to mean 'more likely than not'), then the Group recognises and measures its current and deferred tax assets and liabilities applying the provisions of IAS 12.

Conversely, if there is uncertainty about the tax treatment, the Group shall reflect the effect of such uncertainty using the method that best resolves the uncertain treatment. The Group shall decide whether to consider each uncertain tax treatment separately or in combination with one or more uncertain tax treatments, choosing the approach that best provides for resolution of the uncertainty. In assessing whether and how uncertainty affects tax treatment, the Group assumes that the tax authority accepts or does not accept uncertain tax treatment on the presumption that the tax authority will, in carrying out its verification, check all the amounts it is entitled to review and be fully aware of all relevant information. When the Group concludes that it is not probable that the tax authority will accept an uncertain tax treatment, it reflects the effect of the uncertainty in determining current and deferred tax, using either the expected value method or the most likely amount method, whichever it expects to better predict the resolution of the uncertainty.

The Group relies on professional judgement in identifying uncertainties in its income tax treatments and reviews its judgements and estimates when changes in facts and circumstances alter its expectations regarding the acceptability of a particular tax treatment or its estimates of the effect of uncertainty, or both.

As uncertain tax positions relate to the definition of income taxes, the Group reports uncertain tax assets/liabilities as current taxes or deferred taxes.

TRANSLATION OF FOREIGN CURRENCY TRANSACTIONS AND BALANCES

Transactions in currencies other than the functional currency are recognised at the exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are subsequently adjusted to the exchange rate at the end of the reporting period.

Non-monetary assets and liabilities denominated in foreign currency and recognised at historical cost are translated using the exchange rate in effect on the date of initial recognition of the transaction. Nonmonetary assets and liabilities denominated in a foreign currency and recognised at fair value are translated using the exchange rate in effect on the date such value is determined. Any exchange differences are recognised in the income statement. In determining the spot exchange rate to use for initial recognition of the related asset, cost or revenue (or a part thereof), on the derecognition of a nonmonetary asset or liability arising from advance consideration in a foreign currency, the date of the transaction is the date when the Group initially recognises the non-monetary asset or liability associated with the advance consideration. In the case of multiple payments or sums collected in advance, the Group must determine the date of the transaction for each advance paid or received.

The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

•	assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position
•	income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and
•	all resulting exchange differences are recognised in other comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

USE OF ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements in conformity with relevant accounting standards and methods in certain cases requires management to make estimates, judgements and assumptions based on information that is available when the financial statements are prepared, past experience and hypotheses considered reasonable and realistic, given the information known at the time. Such estimates have an effect on the amounts reported in the financial statements, including the statement of financial position, the statement of comprehensive income, the statement of cash flows and the related notes to the financial statements. Actual results may then differ, even significantly, from those reported in the financial statements due to changes in the factors considered in determining the estimates, given the uncertainties that characterise the assumptions on which estimates are based. Estimates and underlying assumptions are monitored continually by the Group. The effects of any changes in estimates are recognized in the consolidated income statement in the period in which the changes are made, or prospectively in future periods.

Key accounting estimates involving a higher degree of subjectivity and judgement on the part of management, where a change in the conditions underlying the assumptions could have a significant effect on the Group's financial results, are detailed below.

•	Goodwill: is tested for impairment at least once a year, which requires management to make subjective judgements based on information available within the Group and in the broader marketplace, as well as on historical experience. These subjective assessments mainly concern: (i) the calculation method and model to be used to determine the recoverable value; and (ii) the determination of the discount rate (weighted average cost of capital or "WACC") and the growth rate ("g-rate"). Goodwill amounted to €1,047,097 thousand as at 31 December 2023. Based on the impairment test performed by management, the recoverable amount of goodwill was significantly higher than its carrying amount for the year ended 31 December 2023. Refer to note 7.1 for further information.
•	Receivables: the provision for doubtful accounts reflects the estimated losses expected on the Group's receivables. Provisions are made for expected losses on receivables, estimated based on past experience with receivables of similar credit risk, current and historical past due amounts, as well as careful monitoring of the quality of the receivables portfolio and current and expected conditions of the economy and reference markets. Estimates and assumptions are periodically revised, and the effects of any changes are reflected in the income statement in the year to which they relate. As at 31 December 2023 the Group's trade receivables amounted to €122,933 thousand, net of the provision for doubtful accounts of €3,675 thousand. The accrual to the provision for the year ended 31 December 2023 amounted to €1,447 thousand. Refer to note 6.6 and 7.6 for further information.
•	Inventories: obsolescence are periodically assessed and written down if their net realisable value is lower than their carrying amount. Write-downs are calculated on the basis of assumptions and estimates made by management, based on its experience and historical results. As at 31 December 2023 the Group's inventories amounted to €135,130 thousand, net of a provision for obsolete inventories of €6,967 thousand. The accrual to the provision for the year ended 31 December 2023 amounted to €2,147 thousand. Refer to note 7.5 for further information.
•	Deferred taxes: are measured on the basis of expected taxable income in future years. The measurement of this expected taxable income depends on factors that could change over time and have a significant effect on the measurement of deferred tax assets. Refer to 7.11 for further information.
•	Useful life of tangible and intangible assets with a finite useful life: Depreciation and amortisation are calculated based on the useful economic life of assets. Useful economic life is determined when the asset is first recognised in the financial statements. Considerations regarding an asset's useful life are based on historical experience, market conditions and expected future events that may affect them, including technological changes. An asset's actual useful life may, therefore, differ from its estimated useful life. No changes to the estimate of the useful life of assets was made during 2023. For the year ended 31 December 2023 no impairment indicators were identified and the Group did not recognize any impairment charges for non-current assets with definite useful lives. Refer to note 6.7 for further information.

Critical Judgments in Applying the Group's Accounting Policies

The Group has determined that it has control over Irca MEA Trading LLC, despite the Group only having 49% of the shareholding. In making this judgement the Group considered the guidance in IFRS 10 based on its participation in policy-making process and representation on the Board of Directors. Irca MEA Trading LLC is therefore fully consolidated.

Recently issued accounting standards

Accounting standards, amendments and interpretations endorsed by the European Union and effective from 1 January 2023

The new accounting standards, amendments and interpretations applied with effect during 2023 and included among the Group's accounting policies are described below.

Accounting standard/amendment	EU-approved	Effective date
Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 - Comparative Information (issued on 9 December 2021)	YES	1 January 2023
Amendments to LAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (issued on 7 May 2021)	YES	1 January 2023
Amendments to LAS 12 Income taxes: International Tax Reform - Pillar Two Model Rules (issued on 23 May 2023)	YES	1 January 2023
Amendments to LAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (issued on 12 February 2021)	YES	1 January 2023
Amendments to LAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (issued on 12 February 2021)	YES	1 January 2023
IFRS 17 Insurance Contracts (issued on 18 May 2017); including Amendments to IFRS 17 (issued on 25 June 2020)	YES	1 January 2023

The above-mentioned accounting standards did not have significant impacts on the Group's results.

Accounting standards not yet applicable as not yet endorsed by the European Union

As at the date of approving these Consolidated Financial Statements, the following standards and amendments had not yet been endorsed by the EU.

Accounting standard/amendment	EU-approved	Effective date
Amendments to LAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements (Issued on 25 May 2023)	NO	On or after 1 January 2024
Amendments to LAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (issued on 15 August 2023)	NO	On or after 1 January 2024

There are not expected to be significant impacts resulting from the application of the above accounting standards.

Accounting standards, amendments and interpretations endorsed by the European Union but not yet adopted by the Group

As at the date of approving these Consolidated Financial Statements, the following standards and amendments had been endorsed by the EU, but not adopted in advance by the Group:

Accounting standard/amendment	EU-approved	Effective date
Amendments to LAS 1 Presentation of Financial Statements: · Classification of Liabilities as Current or Non-current Date (issued on 23 January 2020); · Classification of Liabilities as Current or Non-current - Deferral of Effective Date (issued on 15 July 2020); and · Non-current Liabilities with Covenants (issued on 31 October 2022)	YES	On or after January 2024
Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued on 22 September 2022)	YES	On or after January 2024

Management is currently assessing the potential impacts that application of these standards would have on the Consolidated Financial Statements.

3 MANAGEMENT OF FINANCIAL RISKS

The Group's objective is to maintain a balanced approach to managing its financial exposure by matching assets and liabilities and achieving operational flexibility through the use of liquidity generated by current operating activities and bank loans.

The Group's ability to generate liquidity from operations together with its borrowing capacity enable it to satisfy its operational requirements to fund working capital, invest and meet its financial obligations. Treasury and financial risk management are centralised within the Group. Specifically, Group management is responsible for evaluating and approving forecast financial requirements, monitoring trends and taking corrective action as necessary.

The following paragraphs provide qualitative and quantitative information relating to the Group's exposure to the aforementioned risks.

3.1 Market risk

Interest rate risk

The Group's had total financial liabilities of €1,210 million, of which €1,110 million bears variable rates of interest.

The most significant portion of financial liabilities relates to the Unitranche Notes for a principal amount of €993 million which were issued in two tranches in 2022 and 2023.

In order to hedge the risk relating to possible movements in the interest rate of the share of the Unitranche notes, which bears interest linked to the six-month EURIBOR rate, a derivative contract for a notional value of €650 million was signed in the first months of 2023. The derivative contract protects against the risk linked to a general increase in interest rates by exchanging the bond's six-month EURIBOR rate with a contractually determined fixed interest rate with a cap of 3.5% calculated every six months. The fair value of those derivatives is a negative amount of €1,217 thousand at 31 December 2023.

At 31 December 2023, the Group had interest rate swap agreements on other financial liabilities for a notional amount of approximately €6.3 million (€6.5 million at 31 December 2022). The fair value of those derivatives is €193 thousand (€366 thousands at 31 December 2022).

The following table shows details of the interest rate swap contracts at 31 December 2023:

Description	Notional amount (thousands of Euro)	Counterparty	Subscription date	Maturity date	Fixed/Strike Rate	Notional amount as of 31/12/2023	Fair value
						(thousands of Euro)	(thousands of Euro)
IRS	325,000	Royal Bank of Canada	25 April 2023	29 March 2025	Cap. 3.5%+premium	325,000	(646)
IRS	325,000	BNP	25 April 2023	29 March 2025	Cap. 3.5%+premium	325,000	(571)
IRS	4,409	Credit Agricole	1 October 2019	02 August 2027	0.001%	2,416	123
							(1,094)

At 31 December 2023, the Group's most significant variable rate assets are cash and cash equivalents.

Sensitivity analysis was performed regarding interest rate risk, to determine the effects on consolidated income and equity of hypothetical positive and negative 150 bps variations to current effective interest rates.

The analysis performed mainly related to the following items:

•	cash and cash equivalents;
•	short-term and medium/long-term bank borrowings.

The following table shows the results of the analysis:

((Thousands of Euro)	Impact on profit or loss net of tax		Impact on shareholders' equity net of tax
	- 150 bps	+ 150 bps	- 150 bps	+ 150 bps
For the year ended 31 December 2023	11,058	(11,058)	11,058	(11,058)
For the period ended 31 December 2022	6.785	(6.785)	6.785	(6.785)

Note: positive amounts indicate higher profits and increases in shareholders' equity; negative amounts indicate lower profits and decreases in shareholders' equity.

Exchange rate risk

The Group operates at an international level and is therefore exposed to the exchange rate risk arising from the different currencies in which it operates. The main exchange rate to which the Group is exposed is the Euro/USD exchange rate, due to the sales operations carried out in the USA, through the companies Dobla USA Manufacturing, Dobla USA Sales, In2Food and Sweet US. In addition, the purchase of main raw materials is also impacted by fluctuations in the exchange rates between the U.S. dollar and British pound sterling, on the one hand, and the Euro, on the other. These currencies are reference currencies for procurement of the main raw materials used by the Group, and this exposes the Group to foreign exchange risk. This risk, however, is mitigated by entering into contracts with suppliers that provide for the fixing of purchase prices of raw materials over agreed periods.

For the period ended 31 December 2023, the total amount of cash inflow directly exposed to the Euro/USD exchange rate risk was equivalent to approximately 23% of the Group's total revenues (10.5% for the year ended 31 December 2022).

In addition, the Group uses foreign exchange forward contracts to manage some of its transaction exposures, mainly related to the acquisition of pistachio raw materials in USD. The foreign exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally from one to 6 months.

The following table shows details of the foreign exchange forward contracts at 31 December 2023:

Description	Notional amount	Counterparty	Subscription date	Maturity date	Fair value
	(thousands of USD)				(Euro)
Flexible Forward - Import	3,000	Banco BPM	23 October 2023	26 September 2024	(121.375)
Flexible Forward - Import	2,000	Credem	23 October 2023	30 December 2024	(102.346)
Flexible Forward - Import	1,745	Credem	3 November 2023	30 August 2024	(65.601)
Flexible Forward - Import	2,000	Credit Agricole	15 November 2023	12 November 2024	(45.326)
					(334.648)

3.2 Credit risk

Credit risk represents the Group's exposure to the risk of potential losses resulting from the nonfulfilment of obligations by counterparts.

Trade receivables are recognised net of provisions, calculated on the basis of the risk of non-fulfilment of obligations by counterparts, in turn based on available information regarding the counterparty's solvency and historical data. Provisions are made against individually significant receivables for which an objective risk of partial or total non-collection is identified. The provision for doubtful receivables at 31 December 2023 amounted to €3,675 thousand (€2,383 thousand at 31 December 2022). The increase in the year is mainly due to the Sweet Acquisition and increased volumes.

The table below gives a breakdown of (current and non-current) trade receivables at 31 December 2023 and 2022 grouped according to maturity, net of the provision for doubtful receivables:

(Thousands of Euro)	At 31 December 2023	Current	Past due 0-60 days	Past due 61-90 days	Past due by more than 90 days
Trade receivables gross ^*	175,931	109,563	52,279	8,854	5,234
Other receivables (current and non-current)	28,260	28,260	-	-	-

^* Trade receivables are reported gross of €52,998 related to receivables sold to factor accompany under a no-recourse agreement

(Thousands of Euro)	At 31 December 2022	Current	Past due 0-60 days	Past due 61-90 days	Past due by more than 90 days
Trade receivables gross ^*	108,622	68,906	32,876	3,906	2,934
Other receivables (current and non-current)	20,118	20,118	-		-

^* Trade receivables are reported gross of €40,767 related to receivables sold to factor accompany under a no-recourse agreement

The amount of cash and cash equivalents at year end is €88,279 thousand at 31 December 2023. The Group operates with reliable banks. Therefore, credit risk related to cash and cash equivalents is considered low.

3.3 Liquidity Risk

Liquidity risk is the risk that owing to an inability to access new funds or sell assets, the Group is unable to meet its payment obligations, leading to a negative impact on results if it is then obliged to incur additional costs to meet its obligations or deal with insolvency.

The Group manages this risk by seeking to establish a financial structure that, consistent with its business objectives and defined limits: i) ensures sufficient liquidity, while minimising the related opportunity cost; and ii) maintains an appropriate balance in terms of duration and composition of debt. The following tables provide an analysis of cash disbursements by due date based on contractual repayment obligations relating to financial payables, lease contracts, trade payables and other liabilities at 31 December 2023 and 2022:

(Thousands of Euro)	Within 1 year	Between 2 and 5 years	More than 5 years
Trade payables	167,220
Payables due to banks and other lenders ^*	171,187	460,374	1,313,138
Other payables	56,942
At 31 December 2023	395,349	460,374	1,313,138

^* Revolving facilities are classified within 1 year given the contractual maturity even though they are generally renewed on a rolling basis.

(Thousands of Euro)	Within 1 year	Between 2 and 5 years	More than 5 years
Trade payables	65,849
Payables due to banks and other lenders ^*	137,133	269,695	830,798
Other payables	17,567
At 31 December 2022	220,549	269,695	830,798

^* Revolving facilities are classified within 1 year given the contractual maturity even though they are generally renewed on a rolling basis.

All the amounts shown in the previous table represent nominal, non-discounted amounts, calculated with reference to the remaining contractual maturities, both for the principal share and the interest share.

3.4 Climate change

Climate change and related regulatory responses may adversely impact the Group business. There is increasing concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere will cause significant changes in weather patterns around the globe and an increase in the frequency and severity of natural disasters. Changes in weather patterns and an increased frequency, intensity and duration of extreme weather conditions could, among other things, disrupt the operation of the supply chain, increase the product costs and impact the types of products that consumers purchase. For example, the supply of certain raw materials the Group sources as part of the business (including cocoa and sugar, among others) is extremely vulnerable to changing weather conditions such as droughts, extreme rainfall, poor terrain conditions, parasites or other pests. Any of these factors, or a combination thereof, may result in lower volumes made available by the suppliers, and increased prices. As a result, the effects of climate change could have a long-term adverse impact on the business, financial condition, results of operations and prospects.

In addition, in many of the countries in which we operate, governmental bodies are increasingly enacting legislation and regulations in response to the potential impacts of climate change. These laws and regulations, which may be mandatory, have the potential to impact the operations of the Group directly or indirectly as a result of required compliance by us, as well as by the suppliers, wholesale partners and distributors.

Finally, the Group has taken voluntary steps to mitigate the impact on climate change. For example, the Group has launched an initiative aiming to reduce the CO ₂ emissions, implemented an ESG scorecard and reporting procedure and are in the process of assessing key climate change risks affecting both the assets and supply chain.

3.5 Risk related to Russia-Ukraine and Israeli-Palestinian conflicts

The Group has not encountered any significant critical issues related to the ongoing Russia-Ukraine conflict in terms of procurement, production, and sales. As of 31 December 2023, the Group's primary suppliers and customers are situated outside of Russia and Ukraine.

However, it cannot be discounted that the persistence of a military conflict situation in Ukraine and the escalating tensions between Russia and the countries where the Group operates could potentially impact global macroeconomics conditions and the economies of those nations. This may lead to a potential decrease in demand and subsequent reduction in production levels. The Group's management continually monitors the evolving sanctions framework.

Regarding the Israeli-Palestinian conflict, the risk that could impact the Group is related to the increase in transportation/container costs.

3.6 Capital Management

The Group's capital management is aimed at guaranteeing adequate capital indicators to support its investment plans, while meeting contractual obligations with lenders. The Group ensures it has sufficient capital to finance its business development needs and meet operating requirements and to guarantee a balanced financial structure and minimise the total cost of capital.

4. FINANCIAL ASSETS AND LIABILITIES BY CATEGORY

The following tables show financial assets and liabilities at 31 December 2023 and 2022 as required by IFRS 7, in accordance with the categories established by IFRS 9:

(in € thousands)	At 31 December 2023	At 31 December 2022
FINANCIAL ASSETS
Financial assets measured at amortised cost:
Non-current financial assets	115	71
Trade receivables	122,933	67,855
Cash and cash equivalents	88,279	60,420
Other assets measured at amortised cost	28,145	20,230
Total	239,472	148,576
Financial assets measured at fair value through other comprehensive income:
Derivative financial instruments	193	366
Total	193	366
TOTAL FINANCIAL ASSETS	239,907	148,942

(Thousands of Euro)	At December 31, 2023	At December 31, 2022
FINANCIAL LIABILITIES
Financial liabilities measured at amortised cost:
Non-current financial liabilities	1,120,809	767,748
Trade payables	167,220	65,849
Current financial liabilities	89,199	68,098
Other payables measured at amortised cost	56,942	17,567
Total	1,434,170	919,262
Financial liabilities measured at fair value through other comprehensive income:
Derivative financial instruments	1,551	524
Total	1,551	524
TOTAL FINANCIAL LIABILITIES	1,435,721	919,786

Fair value of the financial assets and liabilities reported above does not substantially differ from their book values in the financial statements at 31 December 2023.

4.1 Fair value measurement

The following table shows details of financial assets and liabilities measured at fair value at 31 December 2023 and 2022 by type of input used to measure fair value.

	At 31 December 2023
((in € thousands)	Level 1	Level 2	Level 3
Derivative financial instrument assets	-	193	-
Derivative financial instrument liabilities	-	(1,551)	-
Total	-	(1,358)	-

	At 31 December 2022
(Thousands of Euro)	Level 1	Level 2	Level 3
Derivative financial instrument assets	-	366	-
Derivative financial instrument liabilities	-	(524)	-
Total	-	(158)	-

The fair value of derivative financial instruments is determined based on Level 2 inputs (see the note above on "Fair value of financial instruments" for details of the requirements of IFRS 13 regarding fair value measurement).

5 BUSINESS COMBINATIONS

Purchase Price Allocation for the Irca Acquisition

The Irca Acquisition (including Irca and Dobla group) was completed on 14 July 2022 for a purchase price of approximately €731 million. As of 31 December 2022, the purchase price allocation process ("PPA") was provisional. In accordance with IFRS 3, the provisional values of the assets acquired and liabilities assumed were subsequently retrospectively adjusted during the twelve-month measurement period following the acquisition to recognize their fair value at the acquisition date, with such adjustment involving the recalculation of goodwill.

As a result, the assets acquired and liabilities assumed are recognized at fair value as shown in the table below:

(Thousands of Euro)	Book value at acquisition date	Provisional fair value adjustments at 31 December 2022	Fair value adjustments during finalisation of PPA	Fair value at acquisition date
Non-current assets
Trademarks	72,801	16,575	-	89,376
Other intangible assets	20,576	127,451	(311)	147,716
Property, Plant and Equipment	88,683	-	2,280	90,963
Other non current asset	103	-	-	103
Total non-current assets	182,163	144,026	1,969	328,158
Current assets
Inventories	53,695	(250)	3,899	57,344
Trade receivables	60,468	(250)	-	60,218
Other current receivables and financial assets	9,919	-	-	9,919
Cash and cash equivalents	47,440	-	-	47,440
Total current assets	171,522	(500)	3,899	174,921
Total assets	353,685	143,526	5,868	503,079
Non-current liabilities
Non-current financial liabilities	9,025		(233)	8,792
Deferred tax liabilities	18,349	39,009	1,461	58,819
Employee benefits	2,129	-	-	2,129
Provisions for risks and charges	371	3,150	480	4,001
Total non-current liabilities	29,874	42,159	1,708	73,741
Current liabilities
Trade payables	71,547	-	-	71,547
Current financial liabilities	342,221	-	(714)	341,507
Tax liabilities	3,929	-	-	3,929
Other current payables and liabilities	15,844	-	-	15,844
Total current liabilities	433,541	-	(714)	432,827
Total liabilities	463,415	42,159	994	506,568
Net assets acquired (A)	(109,730)	101,367	4,874	(3,489)
Consideration (B)	731,160			731,160
Goodwill	840,890	(101,367)	(4,874)	734,649
out of which Irca				644,743
out of which Dobla				89,906

^* Goodwill allocation between Irca and Dobla has been performed based on the relative fair value of the two entities.

As a result of the provisional purchase price allocation an amount of €101,367 thousand was allocated to goodwill as of 31 December 2022. As a result of the completion of the purchase price allocation in 2023 the adjustments were mainly related to:

―	The remeasurement of some tangible assets at their fair value and the right of use assets for a net amount of € 2,280 thousand;
―	The remeasurement of inventory for 3,899 thousand;
―	Provision for risk for €480 thousand;
―	Current and non-current financial liabilities respectively for € 714 thousand and €233 thousand related to lease liabilities; and
―	Deferred tax liabilities of €1.461 thousand relating to the tax effect on the above adjustments.

Purchase Price Allocation of Anastasi Acquisition

On 27 October 2022 Irca purchased 79.337% of the share capital of Anastasi S.r.l. and 2Aemme S.r.l. (together "Anastasi") from the Anastasi family for a total consideration of approximately €115 million. The remaining part of the share capital was purchased by an indirect parent of the Company and transferred to Irca through a capital contribution. As of 31 December 2022, the difference between the purchase price and the net assets acquired was allocated to goodwill on a preliminary basis. In accordance with IFRS 3, the provisional values of the assets acquired, and liabilities assumed were then subsequently retrospectively adjusted during the twelve-month measurement period following the acquisition to recognize their fair value at the acquisition date, with such adjustment involving the recalculation of goodwill.

As a result, the assets acquired, and liabilities assumed are recognized at fair value as shown in the table below:

(in € thousands)	Book value at acquisition date	Fair value adjustments	Fair value at acquisition date
Non-current assets
Trademark	-	13,077	13,077
Other intangible assets	13	22,300	22,313
Property, Plant and Equipment	5,917	-	5,917
Total non-current assets	5,930	35,377	41,307
Current assets
Inventories	13,688	-	13,688
Trade receivables	12,648	-	12,648
Other current receivables and financial assets	1,852	-	1,852
Cash and cash equivalents	10,790	-	10,790
Total current assets	38,978	-	38,978
Total assets	44,908	35,377	80,285
Non-current liabilities
Non-current financial liabilities	2,327	-	2,327
Deferred tax liabilities/ (assets)	(156)	9,870	9,714
Employee benefits	238	-	238
Provisions for risks and charges	708	-	708
Total non-current liabilities	3,117	9,870	12,987
Current liabilities
Trade payables	2,732	-	2,732
Current financial liabilities	4,874	-	4,874
Tax liabilities	1,944	-	1,944
Other current payables and liabilities	1,416	-	1,416
Total current liabilities	10,966	-	10,966
Total liabilities	14,083	9,870	23,953
Net assets acquired	24,456	20,236	44,692
Equity attributable to minority interest	6,369	5,271	11,640
Consideration paid - 79.337% share capital (A)	115,007	-	115,007
Capital contribution (B)	30,000	-	30,000
Net assets acquired (100%) (C)	30,825	25,507	56,332
Goodwill (A+B,C)	114,182	(25,507)	88,675

The main adjustments made to book values in measuring the fair value of the assets acquired and liabilities assumed related to the following items:

―	Anastasi trademark for €13,077 thousand;
―	Customer list for €22,300 thousand; and
―	Deferred tax liabilities, which increased by €9,870 thousand, in recognition of the tax effect relating to the adjustments identified at the acquisition date.

Non-controlling interests as at the date of the acquisition may be measured at fair value or at the present ownership instruments' proportionate share in the recognised amounts of the acquirer's identifiable net assets. The choice of measurement method may be made on a transaction-by-transaction basis. In the case of the Anastasi Acquisition, the Group has chosen to recognise non-controlling interests at fair value.

Purchase Price Allocation of Cesarin Acquisition

On 28 July 2022 Irca purchased the entire share capital of Agrinco Holding S.A. which entirely controls Cesarin S.p.A. from the Cesarin family for a total consideration of approximately €60,5 million. As of 31 December 2022, the difference between the purchase price and the net assets acquired was allocated to goodwill on a preliminary basis. In accordance with IFRS 3, the provisional values of the assets acquired, and liabilities assumed were then subsequently retrospectively adjusted during the twelve-month measurement period following the acquisition to recognize their fair value at the acquisition date, with such adjustment involving the recalculation of goodwill.

As a result, the assets acquired, and liabilities assumed are recognized at fair value as shown in the table below:

(Thousands of Euro)	Book value at acquisition date	Provisional fair value adjustments at 31 December 2022	Fair value adjustments during finalisation of PPA	Fair value at acquisition date
Non-current assets
Trademarks		5,882		5,882
Other intangible assets	1	1,892		1,893
Property, Plant and Equipment	6,334			6,334
Other non current asset	17			17
Total non-current assets	6,352	7,774	-	14,126
Current assets
Inventories	6,956		799	7,755
Trade receivables	5,826			5,826
Other current receivables and financial assets	862			862
Cash and cash equivalents	2,738			2,738
Total current assets	16,382	-	799	17,181
Total assets	22,734	7,774	799	31,307
Non-current liabilities
Non-current financial liabilities	3,521			3,521
Deferred tax liabilities	(185)	2,169	223	2,207
Employee benefits	400			400
Provisions for risks and charges	882			882
Total non-current liabilities	4,618	2,169	223	7,010
Current liabilities
Trade payables	6,207			6,207
Current financial liabilities	1,676			1,676
Tax liabilities	718			718
Other current payables and liabilities	1,441			1,441
Total current liabilities	10,042	-	-	10,042
Total liabilities	14,660	2,169	223	17,052
Net assets acquired (A)	8,074	5,605	576	14,255
Consideration (B)	60,486			60,486
Goodwill	52,412	(5,605)	(576)	46,231

As a result of the provisional purchase price allocation an amount of €5,065 thousand was allocated to goodwill as of 31 December 2022. As a result of the completion of the purchase price allocation in 2023 an adjustment of €799 thousand was made on inventory (with related tax effect of €223 thousand).

As a result of the finalisation of the purchase price allocation relating to the Irca, Anastasi and Cesarin and the Anastasi Acquisition the following adjustments have been made to the goodwill as of and for the period ended December 31, 2022:

(in € thousands)	At 31 December 2022	Purchase price allocation	At 31 December 2022 restated
Goodwill	900,690	(31,135)	869,555
Adjustments
Property plant and equipment		2,280	2,280
Intangible assets		35,066	35,066
Provision		(480)	(480)
Inventory		4,698	4,698
Other		178	178
Current financial liabilities		714	714
Non-current financial liabilities		233	233
Deferred tax liabilities		(11,554)	(11,554)
Total adjustments		31,135	31,135

Sweet acquisition

On 27 March 2023 the Group finalised the purchase of the "Sweet Ingredients Portfolio" from Kerry Group (a world leading provider of taste and nutrition solutions for the food, beverage, and pharmaceutical markets) for a total consideration of approximately €514.6 million, of which a portion of deferred consideration to be paid by September 2025. At 31 December 2023 the deferred consideration outstanding was €30 million of which a portion due in 2024 and the remainder in 2025.

In the period between the acquisition date and 31 December 2023, the acquisition resulted in increased revenues of approximately €276.7 million. Sweet generated a net loss of approximately €30.2 million in the period that it was consolidated by the Group. If the acquisition had occurred on 1 January 2023, revenue for the year ended 31 December 2023 would have increased by €85.6 million.

The provisional allocation of the fair value of the assets acquired and liabilities assumed in relation to the acquisition of Sweet EMEA and US is as follows:

(in € thousands)	Book value at acquisition date	Fair value adjustments	Provisional fair value at acquisition date
Non-current assets
Trademarks	-	15,596	15,596
Other intangible assets	799	193,044	193,843
Property, Plant and Equipment	78,186	27,995	106,181
Other non-current asset	-	-	-
Total non-current assets	78,985	236,635	315,620
Current assets
Inventories	56,226	4,038	60,264
Tax receivables	54	-	54
Other current financial assets	1,252	-	1,252
Cash and cash equivalents	(196)	-	(196)
Total current assets	57,336	4,038	61,374
Total assets	136,321	240,673	376,994
Non-current liabilities
Non-current financial liabilities	5,245	-	5,245
Deferred tax liabilities	(300)	8,931	8,631
Employee benefits	622	-	622
Provisions for risks and charges	3,530	-	3,530
Total non-current liabilities	9,097	8,931	18,028
Current liabilities
Trade payables	10,556	-	10,556
Current financial liabilities	2,722	-	2,722
Tax liabilities	433	-	433
Other current payables and liabilities	7,896	-	7,896
Total current liabilities	21,607		21,607
Total liabilities	30,704	8,931	39,635
Net assets acquired (A)	105,617	231,742	337,359
Consideration (B)	514,649	-	514,649
Goodwill	409,032	(231,742)	177,290

The main adjustments made to book values in measuring the fair value of the assets acquired and liabilities assumed related to the following items:

―	Trademark - Ravifruit trademark for €15,596 thousand;
―	Other intangible assets - Recipes for €193,044 thousand;
―	Remeasurement of inventory at fair value for €4,038 thousand;
―	Remeasurement of certain tangible assets at fair value for €27,995 thousand;
―	Deferred tax liabilities of €8,931 thousand, in relation to the tax effect of the previous adjustments.

As of the date of preparing the financial statements, the final measurement of the fair value of the assets acquired and liabilities assumed, as well as the amount to be allocated to goodwill, is still ongoing and, therefore, in accordance with the provisions of IFRS 3, the company shall complete such measurement within twelve months from the acquisition date. The provisional values of the assets acquired and liabilities assumed may be adjusted retrospectively to recognize their fair value at the acquisition date, with such adjustment involving the recalculation of goodwill.

The goodwill is mainly attributable to the expected synergies from combining operations of the Sweet ingredients portfolio and the other entities of the Group.

No transaction costs charged to the Group in relation to the Sweet acquisition.

Net cash flows relating to the acquisition are shown in the following table:

(in € thousands)
Net assets acquired (consideration paid)	484,970
Cash and cash equivalents at acquisition date	(196)
Net cash flow from acquisition	484,774

Ashanti acquisition

On 12 October 2023, Irca Group acquired Ashanti, International School of Pastry & Culinary Arts in Poland ("Ashanti") for a consideration of approximately €658 thousand.

In the period between the acquisition date and 31 December 2023, the acquisition resulted in increased revenues of approximately €92 thousand and a decrease of around €20 thousand in net profit attributable to the Group.

The following tables show the book value as of the acquisition date of the assets acquired and liabilities assumed as well as the calculation of provisional goodwill.

(in € thousands)	At Acquisition date
Non-current assets
Property, Plant and Equipment	169
Total non-current assets	169
Current assets
Inventories	19
Trade receivables	23
Other current receivables and financial assets	15
Cash and cash equivalents	73
Total current assets	130
Total assets	299
Non-current liabilities
Non-current financial liabilities	120
Total non-current liabilities	120
Current liabilities
Trade payables	2
Current financial liabilities	374
Other current payables and liabilities	8
Total current liabilities	384
Total liabilities	504

(in € thousands)	Provisional goodwill
Net assets acquired (A)	(205)
Consideration (B)	658
Goodwill	863

As of the date of preparing the financial statements, the measurement of the fair value of the assets acquired and liabilities assumed, as well as the amount to be allocated to goodwill, is still ongoing and, therefore, in accordance with the provisions of IFRS 3, the company shall complete such measurement within twelve months from the acquisition date.

Net cash flows relating to the acquisition are shown in the following table:

(in € thousands)
Net assets acquired (consideration paid)	658
Cash and cash equivalents at acquisition date	73
Net cash flow from acquisition	585

Transaction costs, equal to €70 thousand, have been charged to the income statement and included in "Cost of services".

6 NOTES TO THE CONSOLIDATED COMPREHENSIVE INCOME STATEMENT

6.1 Revenues

Revenues increased by €676,380 thousand mainly due to the full year impact of the acquisitions of Irca, Cesarin, Anastasi and the contribution of Sweet Ingredients Portfolio for nine months of 2023.

6.2 Other income

Other income amounted to €2,877 thousand for the year ended 31 December 2023 and are mainly relates to i) incentives for photovoltaic plants for €331 thousand (€214 thousand at 31 December 2022), ii) grants on new investments and others for €1,154 thousand (€744 thousands at 31 December 2022).

6.3 Cost of raw materials, consumables and goods for resale

The following table provides a breakdown of Cost of raw materials, consumables and goods for resale:

(in € thousands)	For the year ended 31 December 2023	For the period from 7 April 2022 to 31 December 2022
Raw materials and goods for resale	524,213	125,059
Packaging, consumables and other	24,490	29,145
Total	548,703	154,204

The increase of €394.499 thousand from €154.204 thousand for the year ended 31 December 2022 to €548.703 thousand for the year ended 31 December 2023 is mainly due to the increase in raw materials and goods for resale amounted to €399.154 thousand. The trend in this item is mainly due to the change in the scope of consolidation and the full year consolidation of the Irca Group.

6.4 Cost of services

The following table provides a breakdown of Cost of services:

(in € thousands)	For the year ended 31 December 2023	For the period from 7 April 2022 to 31 December 2022
Transport costs	35.122	10.398
Utilities	20.787	5.743
Consultancy and legal fees	11.247	5.720
Maintenance	12.075	1.390
Fees and other agency costs	2.751	1.369
Storage of goods	6.035	1.365
Marketing costs	2.640	1.166
Travel expenses	4.801	1.119
Third-party services	1.572	1.086
Agent's indemnity	5.502	90
Other	27.787	6.488
Total	130.319	35.934

Other mainly includes IT, cleaning, insurance, laboratory and bank costs.

6.5 Personnel expenses

The following table provides a breakdown of Personnel expenses:

(in € thousands)	For the year ended 31 December 2023	For the period from 7 April 2022 to 31 December 2022
Wages and salaries	97.336	21.772
Social security contributions	20.928	3.495
Post-employment benefits	4.010	1.256
Other costs	2.159	403
Total	124.433	26.926

The following table shows the number of Group employees by category at 31 December 2022:

	As at 31 December 2023	As at 31 December 2022
Senior management	35	19
Middle manager	169	50
White collar	687	285
Blue collar	1.276	774
	2.167	1.128

The average number of employees for 2023 is 1.648.

6.6 Release/(Impairment) of provision for financial assets

The Release/(Impairment) of provision for financial assets includes the provisions for doubtful receivables and amounts to €1.447 thousand at 31 December 2023 (a release of €402 thousand for the period ended December 31, 2022).

6.7 Depreciation, amortisation and impairment

The following table provides a breakdown of Depreciation, amortisation and impairment:

(in € thousands)	For the year ended 31 December 2023	For the year ended 31 December 2022
Depreciation/amortisation:
amortisation of intangible fixed assets	33.764	10.788
depreciation of property, plant and equipment	22.345	5.374
Other provisions:
Impairment of property plant and equipment	479	-
Provision	524	-
Total	57.112	16.162

For more information about changes in Amortisation of intangible assets and Depreciation of property, plant, and equipment, please refer to Note 7.2 2 "Trademarks", 7.3 "Other intangible assets" and 7.4 "Property, plant and equipment".

6.8 Other operating costs

The following table provides a breakdown of Other operating costs:

((in € thousands)	For the year ended 31 December 2023	For the period from 7 April 2022 to 31 December 2022
Taxes and other duties	4.753	258
Contributions and donations	247	87
Compensation	76	28
Other expenses	2.595	645
Total	7.671	1.018

6.9 Finance income and expenses

The following table provides a breakdown of Finance income and expenses:

(in € thousands)	For the year ended 31 December 2023	For the period from 7 April 2022 to 31 December 2022
Gain on early extinguishment of Bridge loan	-	19,350
Interest income	3,780	1,411
Other minor costs	-	180
Finance income	3,780	20,941
Unitranche interest expenses	(105,646)	(17,651)
Bridge interest expenses	-	(4,482)
RCF interest expenses	(707)	(899)
Midco 2 interest expenses	(4,805)	-
Interest expenses on other loans	(2,338)	(1,500)
Bridge Facility Financing fee	-	(11,694)
Other finance expenses	(9,658)	(2,656)
Finance expenses	(123,154)	(38,891)
Finance income and (expenses), net	(119,374)	(17,950)

6.10 Income tax expense

The following table provides a breakdown of Income tax expense/(income):

(in € thousands)	For the year ended 31 December 2023	For the period from 7 April 2022 to 31 December 2022
Current taxes	14,833	5,144
Deferred tax assets and liabilities	(24,024)	(4,719)
Total tax (income)/expense	(9,191)	425

The following table shows the reconciliation between the theoretical tax charge and the actual tax expense for the period:

(in € thousands)	For the year ended 31 December 2023	For the period from 7 April 2022 to 31 December 2022
Profit before tax	(71,196)	(7,993)
Theoretical income taxes	17,087	1,918
ACE (Allowance for Corporate Equity)	1,715	1,616
IRAP (Italian Regional Income Tax)	(2,126)	(1,549)
Unrecognised DTA	(2,983)	(3,186) ^*
Difference between overseas rate and domestic rate	(3,230) ^**	(740)
Tax effect of permanent differences	(1,272)	1,516
Total income tax expense	9,191	(425)
Actual tax rate	(12,9%)	5,3%

^* related to the Holding entities
^** related to the Sweet perimeter

7 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

7.1 Goodwill

The item and the related movement can be detailed as follows:

(in € thousands)
At 7 April 2022	-
Acquisitions through business combinations:
Irca	644.743
Dobla	89.906
Cesarin	46.231
Anastasi	88.675
At 31 December 2022	869.555
Acquisitions through business combinations:
Ashasanty Acquisition	863
Sweet EMEA Acquisition	55.940
Sweet USA Acquisition	121.350
Translation difference	(611)
As at 31 December 2023	1,047,097

The increase in goodwill mainly relates to the acquisition of the Sweet Ingredients Portfolio.

The CGUs identified coincide with the business groups acquired in the acquisitions mentioned above.

The recoverable amount of the CGUs was determined based on its value in use, being the present value of estimated future cash flows as set out in the Group's 2024-2028 Plan. Cash flows for periods beyond the timeframe of the plan were estimated based on a growth rate ("g-rate") in line with the expected longterm inflation rate of the countries in which the CGUs generate their operating cash flows.

In order to determine the terminal value, the level of investments was estimated equal to the average of those expected for the period 2024-2028. Expected future cash flows were discounted at the weighted average cost of capital ("WACC"), which reflects the current market assessment of the time value of money for the period considered and the specific risks of the countries in which the CGUs operate.

The terminal value of each CGU was calculated based on an estimate of the CGU's future cash flows (using the perpetuity growth model) and the latest available forecast data, assuming a growth rate and discount rate (WACC, which represents the weighted average of the cost of own capital and the after-tax cost of borrowing) as shown in the following table:

	2023 Impairment Test		2022 Impairment Test
CGU	Growth rate	WACC	Growth rate	WACC
Irca	1.8%	8.5%	2%	9.29%
Dobla	2.1%	8.4%	2%	7.61%
Cesarin	1.7%	8.4%	n.a.	n.a.
Anastasi	1.8%	8.3%	n.a.	n.a.
Sweet EMEA	2.1%	8.0%	n.a.	n.a.
Sweet USA	2.1%	8.7%	n.a.	n.a.

In 2022 the recoverable amount of the Cesarin and Anastasi CGU's were determined based on the relative fair values less costs to sell, considering that both acquisition dates were closed to 31 December 2022.

Based on the impairment tests performed, the estimated recoverable amounts for the CGUs exceeded their related book values at the reporting date. The recoverable amount of Ashani was determined on the basis of the relative fair value less costs to sell, considering that the acquisition date is close to 31 December 2023.

Sensitivity analyses were also conducted to check the effects of change in certain significant parameters on the impairment test results. The results of such analyses for the year ended 31 December 2023 (impact on the cover of the impairment test) are shown in the tables below reported:

Irca CGU

€ ml		G-rate
		1.3%	1.5%	1.8%	2.0%	2.3%
WACC	8,0%	149.5	182.2	217.5	255.8	297.5
	8,2%	110.7	140.7	173.1	208.1	246.1
	8,5%	74.5	102.2	132.0	164.1	198.8
	8,7%	40.8	66.4	93.9	123.4	155.2
	9,0%	9.3	33.1	58.4	85.7	114.9

Dobla CGU

€ ml		G-rate
		1.6%	1.8%	2.1%	2.3%	2.6%
WACC	7.9%	105.1	113.8	123.4	133.8	145.2
	8.2%	94.8	102.9	116.9	121.1	131.4
	8.4%	85.4	92.8	100.8	109.4	118.8
	8.7%	76.6	83.4	90.8	98.7	107.2
	8.9%	68.4	74.7	81.5	88.7	96.6

Anastasi CGU

€ ml		G-rate
		1.3%	1.5%	1.8%	2.0%	2.3%
WACC	7.8%	63.2	69.5	76.5	84.0	92.1
	8.1%	55.6	61.4	67.8	74.6	82.0
	8.3%	48.5	53.9	59.7	66.0	72.8
	8.6%	42.0	47.0	52.3	58.0	64.3
	8.8%	35.9	40.5	45.4	50.7	56.4

Cesarin CGU

€ ml		G-rate
		1.2%	1.5%	1.7%	2.0%	2.2%
WACC	7.9%	8.6	11.1	13.8	16.6	19.8
	8.2%	5.7	8.0	10.4	13.1	15.9
	8.4%	3.0	5.1	7.4	9.8	12.4
	8.7%	0.5	2.5	4.6	6.8	9.2
	8.9%	(1.8)	(0.0)	1.9	4.0	6.2

Sweet EMEA CGU

€ ml		G-Rate
		1.6%	1.8%	2.1%	2.3%	2.6%
WACC	7.5%	113.8	124.9	137.0	150.2	164.8
	7.8%	101.4	111.4	122.4	134.4	147.5
	8.0%	89.9	99.1	109.1	120.0	131.8
	8.3%	79.3	87.7	96.9	106.8	117.5
	8.5%	69.4	77.2	85.6	94.6	104.5

Sweet US CGU

€ ml		G-rate
		1.6%	1.9%	2.1%	2.4%	2.6%
WACC	8,2%	73.3	88.1	104.1	121.4	140.3
	8,5%	56.2	69.8	84.4	100.3	117.5
	8,7%	40.3	52.8	66.3	80.8	96.5
	9,0%	25.5	37.1	49.5	62.8	77.2
	9,2%	11.7	22.4	33.9	46.2	59.4

7.2 Trademarks

This item includes the value of the Cesarin, Anastasi, Irca, Dobla and Sweet trademarks, as determined following completion of the Purchase Price Allocation processes.

The item and the related movement can be detailed as follows:

(in € thousands)	Cesarin trademark	Anastasi Trademark	IRCA trademark	Dobla trademark	Rivafruit Sweet EMEA	Total
At 7 April 2022
IRCA acquisition	-	-	62,197	27,179	-	89,376
Cesarin acquisition	5,882	-	-	-	-	5,882
Anastasi acquisition	-	13,077	-	-	-	13,077
Amortisation	(82)	(73)	(966)	(422)		(1,543)
At 31 December 2022	5,800	13,004	61,231	26,757	-	106,792
Sweet acquisition	-	-	-	-	15,596	15,596
Amortisation	(197)	(436)	(1,993)	(906)	(397)	(3,929)
At 31 December 2023	5,603	12,568	59,238	25,851	15,199	118,459

7.3 Other intangible assets

The item and the related movement can be detailed as follows:

(in € thousands)	Customer list	Recipes	Development costs	Industrial patents and intellectual property rights	Other	Assets under construction and advances	Total
At April 7, 2022
Tiramisu' S.p.A.	-	-	-	-	7	-	7
IRCA Group acquisition	107,531	35,065	-	3,799	378	943	147,716
Cesarin acquisition	1,892	-	-	1	-	-	1,893
Anastasi e 2Aemme acquisition	22,300	-	-	-	4	9	22,313
Additions	-	-	331	1,057	55	198	1,641
Amortisation	(6,127)	(1,633)	(66)	(1,332)	(87)		(9,245)
Currency translation difference	-	-	-	-	(11)	-	(11)
At 31 December 2022	125,596	33,432	265	3,525	346	1,150	164,314
Additions	-	-	398	3,882	914	5,973	11,167
Sweet acquisition	50,958	142,086	-	-	799	-	193,843
Disposal
Amortisation	(16,440)	(8,937)	(150)	(3,219)	(1,089)	-	(29,835)
Currency translation	-	-	-	238	(10)	(238)	(10)
At 31 December 2023	160,114	166,581	513	4,426	960	6,885	339,479

Customer list and Recipes have been determined following the completion of the Purchase Price Allocation processes of Irca, Cesarin, Anastasi and Sweet.

Industrial patents and intellectual property rights mainly included licences for software used in production and management activities. The additions of the year mainly refer to the i) improvement of business intelligence tools; ii) implementation of ERP management system modules with related software licences;

iii) changes and additions to the MES system; iv) development of web and mobile platform for order management.

Assets under construction amounting to € 6,885 thousand at 31 December 2023 (€1,150 thousand at 31 December 2022) mainly related to investments made by the Group in relation to the evolution of the ERP system. No impairments of assets under construction have been identified.

7.4 Property, plant and equipment

The item and the related movement can be detailed as follows:

(in € thousands)	Land and buildings	Plant and machinery	Office equipment	Leasehold improvements	Rightof-use assets	Assets under construction and advances	Other assets	Total
At 7 April 2022	-	-	-	-	-	-	-	-
Irca acquisition	43,359	31,834	1,318	119	9,232	4,349	754	90,964
Cesarin acquisition	4,807	1,108	195	-	125	-	-	6,235
Anastasi acquisition	627	701	112	108	4,343	-	26	5,917
Additions	626	1,290	853	13	4,360	1,709	94	8,945
Reclassification of assets under construction	313	2,251	14	-	-	(2,578)	-	-
Disposals	(283)	(43)	(2)	-	-	-	(3)	(331)
Depreciation	(819)	(2,621)	(415)	(26)	(1,358)	-	(136)	(5,374)
Currency translation difference	(161)	(62)	(6)	-	35	-	-	(194)
At 31 December 2022	48,469	34,458	2,069	214	16,737	3,480	735	106,162
Additions	4,593	9,673	1,523	66	5,305	13,318	384	34,862
Reclassification of assets under construction	671	1,410	75	-	-	(2,156)	-	-
Sweet acquisition	56,546	35,500	997	166	7,898	4,156	920	106,183
Ashanti acquisition	-	-	571	-	-	-	-	571
Irca France constitution	-	-	162	-	-	-	-	162
Disposals	-	(3)	-	-	(1,443)	(157)	-	(1,603)
Depreciation	(3,259)	(11,427)	(1,306)	(116)	(5,466)	-	(771)	(22,345)
Write-off of assets	(479)	-	-	-	-	-	-	(479)
Currency translation difference	(908)	(520)	(14)	(2)	(69)	(103)	15	(1,601)
At 31 December 2023	105,633	69,090	4,077	328	22,962	18,538	1,283	221,912

Land and buildings amounting to €105,633 thousand at 31 December 2023 (€48,469 thousand at 31 December 2022) mainly includes the net book values of values of land and buildings of the production plants of the Group, The increase is primarily related to the Sweet acquisition for €56,546 thousand.

The item Plant and machinery mainly includes plants dedicated to Group production activities and amount to €69,090 thousand at 31 December 2023 (€34,458 thousand at 31 December 2022).

Additions, equal to €34,862 thousand, mainly refer to the new productions lines for improving and increasing the Group's production capacity (in particular the new line for the production of dark creams and the dark chocolate and new packaging line in Italy, renovation and expansion of the factory in Vietnam and chocolate production in US).

Assets under construction and advances, amount to €18,538 thousand at 31 December 2023 (€3.480 thousand at 31 December 2022), mainly includes investments made for chocolate and cream production lines which are expected to come into operation during the 2024 financial year and new confectionary line in France and oven in UK.

No impairments of assets under construction have been identified.

The following table provides a breakdown of right-of-use assets and related movements:

(in € thousands)	Land and buildings	Plant and machinery	Motor vehicles	Other assets	Total
At 7 April 2022	-	-	-	-	-
Irca acquisition	3,119	4,162	811	1,140	9,232
Cesarin acquisition	-	125	-	-	125
Anastasi acquisition	388	3,955	-	-	4,343
Additions	-	3,440	627	293	4,360
Depreciation	(420)	(417)	(272)	(249)	(1,385)
Currency translation difference	44	(9)	-	-	35
At 31 December 2022	3,131	11,256	1,166	1,184	16,737
Addition	588	2,929	1,090	698	5,305
Sweet acquisition	6,457	912	-	529	7,898
Disposal	(1,380)	-	-	(63)	(1,443)
Depreciation	(2,338)	(1,538)	(699)	(891)	(5,466)
Currency translation difference	(77)	7	-	1	(69)
At 31 December 2023	6,381	13,566	1,557	1,458	22,962

The additions mainly refer to the expansion of a new line of chocolate and light creams in Italy as well as new company cars for Euro 1,090 thousand.

7.5 Inventories

The item can be detailed as follows:

(in € thousands)	At 31 December 2023	At 31 December 2022
Raw materials, consumables and supplies	52,740	28,643
Work in progress and semi-finished products	10,200	8,303
Finished products	64,416	41,520
Advances	9,128	5,032
Packaging	1,041	-
Spare parts	4,573	479
Provision for obsolete inventories	(6,967)	(2,395)
Total inventories	135,130	81,582

Inventories amount to €135,130 thousand at 31 December 2023 (€81,582 thousand at 31 December 2022) and are shown net of the provision for obsolete inventories, totalling €6,967 thousand (€2,395 thousand at 31 December 2022). The increase of €53,548 thousand is mainly related to the Sweet acquisition. Excluding the effects of such acquisition, inventories are in line with those at 31 December 2022.

The following table shows changes in the provision for obsolete inventories:

(in € thousands)
At 31 7 April 2022	-
Irca acquisition	1,266
Cesarin acquisition	616
Anastasi acquisition	100
Addition	552
Utilization	(120)
Currency translation difference	(19)
At 31 December 2022	2,395
Sweet acquisition	5,792
Addition	2,147
Utilisations	(3,297)
Currency translation difference	(71)
At 31 December 2023	6,967

7.6 Trade receivables

The item can be detailed as follows:

(in € thousands)	At 31 December 2023	At 31 December 2022
Trade receivables (gross)	126,608	70,238
Provision for doubtful receivables	(3,675)	(2,383)
Total	122,933	67,855

Trade receivables amount to €122,933 thousand at 31 December 2023 (€67,855 thousand at 31 December 2022) and are presented net of the provision for doubtful receivables, amounting to €3,675 thousand at 31 December 2023 (€2,383 thousand at 31 December 2022). The increase of €55,078 thousand is mainly related to the Sweet acquisition.

The following table shows changes in the provision for doubtful receivables.

(in € thousands)	Provision for doubtful receivables	Provision for write-down of late-payment interest ^*	Total
At 7 April 2022	-	-	-
Irca acquisition	2,438	553	2,991
Cesarin acquisition	502	-	502
Addition	(402)	1,397	995
Utilization	(148)	-	(148)
Currency translation difference	(7)	-	(7)
At 31 December 2022	2,383	1,950	4,333
Addition	1,447	3,025	4,642
Sweet Acquisition	-	-	-
Utilisations	(146)	(1,950)	(2,096)
Currency translation difference	(9)	-	(9)
At 31 December 2023	3,675	3,025	6,870

^* The provision relating to late-payment interest charged by the Group is classified under finance expenses, as an offset against finance income relating to amounts charged to customers for late payment.

There were no receivables with a maturity of more than five years.

7.7 Other current and non-current assets

The item can be detailed as follows:

(in € thousands)	At 31 December 2023	At 31 December 2022
Guarantee deposits	80	29
Receivables due from employees	-	7
Loans	35	35
Other non-current assets	115	71
Indirect tax receivables	2,630	2,839
Factor	5,435	3,994
Prepayments and accrued income	5,373	5,872
Investment tax credit 4.0	2,610	3,857
Other tax credit	443	2,365
Guarantee deposits	427	412
Financial receivables with Kerry Group	7,344	-
Incentives for the photovoltaic plant	-	186
Miscellaneous receivables	3,883	705
Other current assets	28,145	20,230

Factor refers to trade receivables transferred under the Factor Agreement not yet collected by the Group.

Loans included under Other non-current financial assets related to a loan granted to the 3A Group. This loan earns interest at a rate of 2%.

Indirect tax receivables included under other current financial assets mainly related to VAT receivables. Prepayments and accrued income are mainly related to the Group's normal business activities and operations.

7.8 Cash and cash equivalents

The item can be detailed as follows:

(in € thousands)	At 31 December 2023	At 31 December 2022
Bank and postal accounts	88,238	60,358
Cheques	22	21
Cash on hand	19	41
Total	88,279	60,420

Cash and cash equivalents at 31 December 2023 were not subject to either restrictions or pledges.

7.9 Shareholders' equity

Consolidated shareholders' equity at 31 December 2023 amounts to €599,234 thousand (€484,1365 thousand at 31 December 2022) and comprises the following:

Share capital

At 31 December 2023, "Share capital" amounts to €1,302 thousand divided into 1,302,000 shares with a nominal value of €1.00

Other reserves

"Other reserves" amounted to €659,937 thousand (€491,252 thousand at 31 December 2022) and included, inter alia, the "Actuarial gains and losses" reserve (negative balance of € 401 thousand) and the foreign currency translation reserve (€1,251 thousand).

7.10 Current and non-current financial liabilities

The item and the related movement can be detailed as follows:

(in € thousands)	At 31 December 2023	At 31 December 2022
Bank loans and borrowings	981,625	757,707
Loans and borrowings from other lenders	9,379	10,041
Payable to Midco 2	129,805	-
Non-current liabilities	1,120,809	767,748
Bank loans and borrowings	37,233	35,625
Loans and borrowings from other lenders	51,966	32,473
Current liabilities	89,199	68,098

The following tables provide a breakdown of "Bank loans and borrowings" at 31 December 2023 and 2022:

(in € thousands)					At 31 December 2023
	Date of stipulation	Maturity date	Nominal amount	Interest rate	Short-term	Long-term
Unitranche notes	29 September 2022	29 September 2029	975,000	Euribor 6M + 7.25% ^*	19,348	974,034
Other borrowings from banks	-	-	-	-	17,885	7,591
Total					37,233	981,625

^* Interest may be paid in cash or PIK provided that the minimum cash pay portion is equal to Euribor 6M + 4,5%

(in € thousands)					At 31 December 2022
	Date of stipulation	Maturity date	Nominal amount	Interest rate	Short-term	Long-term
Unitranche notes	29 September 2022	29 September 2029	750,000	Euribor 6M + 7.25% ^*	17,651	718,267
RCF line	13 July 2022	13 January 2029	34,200	Euribor 3M + 3.5%	608	34,200
Other borrowings from banks	-	-	-	-	17,366	5,240
Total					35,625	757,707

^* Interest may be paid in cash or PIK provided that the minimum cash pay portion is equal to Euribor 6M + 4.5%

At 31 December 2023, the Current and non-current financial liabilities refer to:

i)	Unitranche notes relate to the Senior Secured Floating Rate Notes due 2029, entered into on 29 September 2022 by AI Tiramisù S.p.A., maturing on 29 September 2029, for a nominal amount of €750,000 thousand and the Additional Unitranche Facility 1 for a nominal amount of €225,000 thousand, subscribed with the purposes of the Sweet acquisition. In line with normal market practice in such cases, the terms and conditions of the Unitranche require that the Group comply with a series of restrictions regarding its right to undertake certain operations, unless specific restrictive covenants or specific exceptions provided for contractually are complied with. Those restrictions have been respected by the Group at 31 December 2023. In order to hedge the risk relating to possible movements in the interest rate of the share of the Unitranche notes, which bears interest linked to the six-month EURIBOR rate, a derivative contract for a notional value of €650 million was signed in the first months of 2023. The derivative contract protects against the risk linked to a general increase in interest rates by exchanging the bond's six-month EURIBOR rate with a contractually determined fixed interest rate with a cap of 3.5% calculated every six months.
ii)	Other borrowings from banks mainly refer to short-term borrowings and short-term credit lines related to Irca Group companies.
iii)	Loan from Midco 2 relates to loan received as part of the Sweet acquisition.

The following tables provides a breakdown of "Other financial liabilities" at 31 December 2023 and 2022:

(in € thousands)	At 31 December 2023
	short term	long term
Amounts due to factoring companies	37,954	-
Liabilities with Kerry Group	4,441	-
Lease liabilities	9,571	9,379
Total	51,966	9,379

(in € thousands)	At 31 December 2022
	short term	long term
Amounts due to factoring company	29,483	-
Lease liabilities	2,990	10,041
Total	32,473	10,041

Amounts due to factoring company relates to trade receivables sold under factoring agreements for which the risk of collection remains with the Group. Consequently, the cash received by the factoring company has been presented in the line "Current financial liabilities".

7.11 Deferred tax liabilities /(assets)

The item can be detailed as follows:

(in € thousands)	At 31 December 2022	Sweet acquisition	Income statement	Statement of Comprehensive Income	At 31 December 2023
Provisions	(977)	59	(923)	-	(1,841)
Interest expenses	(5,336)	-	(16,662)	-	(21,998)
Property, plant and equipment and intangible assets	72,077	8,406	(5,220)	-	75.263
Other	328	(222)	(1,219)	18	(1,095)
Deferred tax liabilities/(assets)	66,092	8,243	(24,024)	18	50,329

(Thousands of Euro)	As at 7 April 2022	Irca acquisition	Cesarin acquisition	Anastasi acquisition	Income statement	Statement of Comprehensive Income	As at 31 December 2022
Provisions	-	(770)	(190)	(156)	139	-	(977)
Interest expenses	-	(4,497)	-	-	(839)	-	(5,336)
Property, plant and equipment and intangible assets	-	62,654	2,180	9,870	(2,627)	-	72,077
Other	-	344	(5)	-	(82)	71	328
Deferred tax liabilities / (assets)	-	57,731	1,985	9,714	(3,409)	71	66,092

7.12 Employee benefits

The item and the related movement can be detailed as follows:

(in € thousands)

As at 7 April 2022	-
Business combination	2,767
Increases	291
Actuarial (gains) / losses	(392)
Finance expenses	14
Utilisations	(62)
As at 31 December 2022	2,618
Sweet acquisition	491
Increases	627
Actuarial (gains) / losses	133
Finance expenses	69
Utilisations	(244)
At 31 December 2023	3,694

The following table provides details of the main financial and demographic assumptions adopted in the actuarial calculations.

	At 31 December 2023	At 31 December 2022
Annual discount rate	3,17%	3.77%
Annual inflation rate	2,00%	3.40%
Annual rate of growth in employee severance indemnity (TFR)	3,00%	4.03%
Annual rate of wage/salary growth	3,00%	4.40%
Demographic assumptions
Death	RG48 mortality tables published by the General State Accounting Body	RG48 mortality tables published by the General State Accounting Body
Disability	INPS tables by age and gender	INPS tables by age and gender
Retirement	100% on achieving AGO requirements	100% on achieving AGO requirements
Annual turnover and advance post-employment benefits
Frequency of advances	3.00%	3.00%
Frequency of turnover	2.50%	2.50%

The following table shows the effects of changes in the actuarial assumptions used to calculate the Employee Severance Indemnity.

(Thousands of Euro)	At 31 December 2023
	Annual discount rate		Annual inflation rate		Annual turnover rate
	0.50%	-0.50%	0.25%	-0.25%	2.00%	-2.00%
Change in employee benefits	(312)	21	(119)	(188)	(171)	(134)
Balance - Employee benefits	3.382	3.715	3.575	3.506	3.523	3.560

(Thousands of Euro)	As at 31 December 2022
	Annual discount rate		Annual inflation rate		Annual turnover rate
	0.50%	-0.50%	0.25%	-0.25%	2.00%	-2.00%
Change in employee benefits	(137)	137	29	(29)	6	(6)
Balance - Employee benefits	2,755	2,481	2,589	2,647	2,612	2,624

7.13 Provisions

The item can be detailed as follows:

(in € thousands)	At 31 December 2023	At 31 December 2022
Provision for sales agent indemnities	790	1,056
Dilapidation provision	3,638	-
Other risk provisions	4,940	4,629
Provisions for risks and charges	9,368	5,685

The following table shows changes in the provision for sales agent indemnities for the period ended 31 December 2023 and 2022:

(in € thousands)	Provision for sales agent indemnities
At 7 April, 2022	-
Irca acquisition	347
Cesarin acquisition	620
Provisions (net of releases)	91
Utilisations	(2)
At 31 December 2022	1,056
Provisions (net of releases)	88
Utilisations	(354)
At 31 December 2023	790

Dilapidation provisions refer to the asset restoration costs for the lease of a warehouse in the United Kingdom.

7.14 Other current and non-current liabilities

The item can be detailed as follows:

(in € thousands)	At 31 December 2023	At 31 December 2022
Deferred consideration	13,147	-
Other non-current liabilities	13,147	-
Payables due to employees	12,376	7,864
Payables due to social security institutes	4,473	2,353
Indirect tax payables	1,883	523
Other payables and accrued expenses	8,140	6,827
Deferred Consideration	16,924	-
Other current liabilities	43,795	17,567

Other current liabilities amounted to €43,795 thousand at 31 December 2023 (€17,567 thousand at 31 December 2023). The Deferred Consideration of €16,924 thousand and €13,147 thousand refers, respectively, to the current and non-current amount of deferred consideration related to the Sweet Acquisition.

8 RELATED-PARTY TRANSACTIONS

During the period ended 31 December 2023, the Group received a loan from Midco 2 related for the purposes of the Sweet Acquisition. The finance expense during the year on the loan amounted to €4,805 thousand. In addition, stock options were provided to certain key managers of the Group as described in Note 9.3.

9 OTHER INFORMATION

9.1 Commitments and risks

Guarantees granted to third parties

In accordance with the provisions of Unitranche finance agreement, each subsidiary of the Company which contributes more than 5% of the Group EBITDA are guarantor of the Notes.

Contingent liabilities

During 2018, a dispute arose with one of the Irca distributors following termination of the existing distribution agreement. In the course of year, the litigation was ruled by the court, that confirmed the legitimacy of the termination by Irca but condemned the latter to pay an amount of €50 thousand as a consequence of a breach of certain contractual obligations pending the termination notice.

On 20 July 2020, the Varese Province Tax Office - Inspections Office (the "Provincial Tax Office"), in order to verify the correct application of IRES, IRAP and VAT tax regulations, served Irca with a questionnaire requiring it to provide certain accounting and non-accounting documentation in relation to fiscal year 2015. Following examination of the documentation provided, the Provincial Tax Office:

i)

informed Irca of a number of findings mostly relating to the corporate reorganisation through which Chocolux Holding Sarl had acquired 80.01% of the share capital of Irca S.p.A. in 2015. Specifically, the Provincial Tax Office claimed higher IRES-related taxable income of €1,764 thousand and IRAP-related taxable income of €1,708 thousand mainly in relation to remuneration due to the resident vehicle (Irca Holding S.p.A.) used in the context of the aforementioned corporate reorganisation; and

ii)

invited Irca to a cross examination, held in December 2020, and then to further meetings in January and February 2021, with the objective of reaching a tax settlement.

Irca, in line with the guidance provided by its tax advisors, decided not to agree to the proposed settlement, noting, at the same time, the impossibility of reaching an out-of-court settlement.

On 24 March 2021, the Provincial Tax Office served Irca with a notice of assessment, partially modifying its claims, also based on additional documentation provided by the Company, and claiming higher IRESrelated taxable income of €550 thousand and IRAP-related taxable income of €483 thousand, equal to approximately additional taxes for €170 thousand (in addition to penalties of €153 thousand). On 21 May 2021, Irca submitted an appeal to the Varese Provincial Tax Office to cancel the notice of assessment received and on 11 October 2021 the enforceability of the contested measure was suspended.

On 7 March 2022, the Tax Justice Court of Varese recognized the groundlessness of the dispute raised by the Provincial Revenue Office and accepted the appeal presented by Irca for the cancellation of the assessment notice relating to the year 2015 and sentenced the Provincial Revenue Office to pay the costs of the proceedings in favour of Irca.

On 3 March 2023, the Provincial Revenue Office notified Irca of the appeal against the sentence rendered by the then Provincial Tax Commission of Varese, in the judgement on the notice of assessment for IRES/IRAP relating to the 2015 tax period.

On 12 July 2023 with Judgement No. 3341/2023 filed on 14 November 2023, the Lombardy Second Instance Tax Court rejected the appeal raised by the Tax Office of varese and, as a result, confirmed the cancellation of the assessment notice related to 2015. Against the 2015 Second Instance Judgment, the Revenue Agency may file an appeal by 14 May 2024.

Again with reference to the same case, on 14 November 2022, the Tax Agency - Large Taxpayers Office proceeded with the notification of the assessment notice for the 2016 tax period, disputing IRCA a higher IRES tax base of €961 thousand (of which €484 thousand relating to lower losses that can be carried forward from the previous year following the aforementioned notice of assessment) and Irap of €366 thousand, to which correspond taxes of €279 thousand (plus fines of €251 thousand). Irca, having carried out an attempt at a tax settlement without reaching an agreement with the Tax Office, filed an appeal with the Milan Tax Court of First Instance.

In April 2023 Irca submitted an appeal against the notification of assessment for 2016 to the Tax Court of Milan. On 31 January 2024, the Tax Court of Milan with Judgement No. 693/2024 filed on 12 February 2024 recognized the groundlessness of the notification and condemned the Tax Office to reimburse the legal expenses. The deadline for the Revenue Agency to appeal the 2016 Judgment before the Lombardy Court of Second Instance will expire on 12 September 2024.

On 24 March 2021, the Tax Agency - Large Taxpayers Office notified Irca of a specific questionnaire to obtain clarifications and supporting documentation regarding the VAT credit relating to the 2017 tax year mainly claimed by the then Biscotto S.p.A., vehicle used for the acquisition (which took place on 27 July 2017) of Irca. It should also be recalled that following this acquisition, Biscotto had proceeded to merge Irca by incorporation and at the same time change its company name to Irca S.p.A. Following an examination of the documentation provided, the Tax Agency notified Irca on 28 September 2022, an assessment notice contesting an undue VAT deduction of €888 thousand, plus fines of €999 thousand. On 24 February 2023, Irca filed an appeal with the Tax Court of Milan against the aforementioned notice of assessment. With Sentence No. 696/2024, pronounced on 31 January 2024 and filed on 12 February 2024, the Tax Court of Milan rejected the appeal. Against the Judgement for 2017, Irca may appeal before the Lombardy Second Instance Tax Court by 12 September 2024.

Management, assisted by third party tax consultants, believes that Irca has adopted tax treatments consistent with the reference legislation and practice and trusts that the dispute in question can be resolved positively in the subsequent levels of proceedings.

9.2 Compensation due to directors and statutory auditors

Compensation due to directors and auditors for the period ended 31 December 2023 amount respectively to €913 thousand and €1.1ml. Compensation due to key managers for the period ended 31 December 2023 amounts to € 6,2 million (€2,5 million for the period ended 31 December 2022).

9.3 Management Equity Plan

After the Irca acquisition, the shareholders of AI Tiramisu (Luxembourg) S.à.r.l. ("Luxco") approved a management equity plan (the "Management Equity Plan") for certain strategic employees of the Group (the "Managers"). Pursuant to the Management Equity Plan, the Managers purchased ordinary and preferred shares (the "Shares") of Luxco by means of a cash payment. The price of the shares paid by the Managers was determined based on an appraisal prepared by a third-party valuator. The preference shares provide for specific financial rights in the event of the exit of the controlling shareholder, Advent ("Sponsor") as disciplined by the Management Equity Plan. Following the Sweet acquisition the equity plan was extended also to strategic employees of Sweet.

The shares held by the Managers are subject to a lock up period based also on good leaver and bad leaver conditions. The Managers have granted call options to the Sponsor, which if exercised by the Sponsor in the event of good or bad leaver events, require the Managers to sell their shares. The Sponsor has granted a put option to the Managers which give the Managers the right to sell their shares to the Sponsor in the event of death, severe illness or permanent disability.

These plans have no economic or financial impact on the Group's financial statements.

9.4 Significant events occurring after the reporting period

On 6 March 2024, the Group signed a binding agreement for the acquisition of Benetti, an Italian player active in the distribution of food ingredients with a capillary presence in the provinces of Padua and Rovigo. The completion of the transaction is expected in April 2024.

Bart De Geyndt, Member of the Board of Directors of AI Tiramisù MidCo 3 S.a.r.l.

Federica Boleso, Member of the Board of Directors of AI Tiramisù MidCo 3 S.a.r.l.

Audit report

To the Shareholder of Al Tiramisu (Luxembourg) Midco 3 S.à r.l.

Report on the audit of the consolidated financial statements

Our opinion

In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of Al Tiramisu (Luxembourg) Midco 3 S.à r.l. (the "Company") and its subsidiaries (the "Group") as at 31 December 2023, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards as adopted by the European Union.

What we have audited

The Group's consolidated financial statements comprise:

•	the consolidated statement of financial position as at 31 December 2023;
•	the consolidated statement of comprehensive income for the year then ended;
•	the consolidated statement of cash flows for the year then ended;
•	the consolidated statement of changes in equity for the year then ended; and
•	the notes to the consolidated financial statements, including material accounting policy information and other explanatory information.

Basis for opinion

We conducted our audit in accordance with the Law of 23 July 2016 on the audit profession (Law of 23 July 2016) and with International Standards on Auditing (ISAs) as adopted for Luxembourg by the 'Commission de Surveillance du Secteur Financier" (CSSF). Our responsibilities under the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the "Responsibilities of the "Reviseur d'entreprises agree" for the audit of the consolidated financial statements" section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants (IESBA Code) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the consolidated financial statements. We have fulfilled our other ethical responsibilities under those ethical requirements.

Other information

The Board of Managers is responsible for the other information. The other information comprises the information stated in the Management Report but does not include the consolidated financial statements and our audit report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Managers for the consolidated financial statements

The Board of Managers is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards as adopted by the European Union, and for such internal control as the Board of Managers determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Managers is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Managers either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Responsibilities of the "Reviseur d'entreprises agree" for the audit of the consolidated financial statements

The objectives of our audit 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 audit 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 the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF 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 these consolidated financial statements.

As part of an audit in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

•	identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain 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;
•	obtain 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;
•	evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Managers;
•	conclude on the appropriateness of the Board of Managers' 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 audit 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 audit report. However, future events or conditions may cause the Group to cease to continue as a going concern;
•	evaluate 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;
•	obtain sufficient appropriate audit evidence regarding the financial information of the entities and 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.

We communicate with those charged with governance 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 identify during our audit.

Report on other legal and regulatory requirements

The Management Report is consistent with the consolidated financial statements and has been prepared in accordance with applicable legal requirements.

Luxembourg, 25 April 2024

PricewaterhouseCoopers, Société coopérative

Represented by

Brieuc Malherbe