Annual report
at 31 december
2021
C
Contents
Report on operations 13
Group annual report and nancial statements
Consolidated nancial statements:
— Consolidated income statement 75
— Consolidated statement of comprehensive income 76
— Consolidated statement of nancial position 77
— Consolidated statement of cash ows 79
— Consolidated statement of changes in net equity 80
Explanatory notes 81
External auditors’ report on the consolidated nancial statements 136
Indipendent auditors’ report on consolidated
Non-Financial Statement 144
Report on operations on separate nancial statements 150
Separate annual report and nancial statements
De’Longhi S.p.A. - Separate nancial statements:
— Income statement 167
— Statement of comprehensive income 168
— Statement of nancial position 169
— Statement of cash ow 171
— Statement of changes in net equity 172
Explanatory notes 173
External auditors’ report on the separated nancial statements 210
Letter from the CEO 3
e De’Longhi Group 4
The Annual report at 31 december 2021 has been translated from the
Italian original solely for the convenience of international readers.
Letter form the CEO
3De’ Longhi Group
Signicant investments were made in manu-
facturing, to improve and strengthen the produc-
tion facilities, as well as in communication and
marketing, in order to support both traditional
channels and digital platforms, which culminat-
ed in the rst global campaign with Brad Pitt as
the Ambassador for the De’Longhi brand coee
products.
e continuous focus on innovation and the
launch of new products made it possible to
expand and renew our product range, enriched
by the acquisition of Capital Brands, active in the
personal blenders segment, and of Eversys, active
in the professional coee segment.
e Group is managing a gradual increase in
complexity on a global level, attributable to the
supply chain tensions linked to the diculties
encountered in nding parts, as well as a general
increase in the cost of raw materials and trans-
portation. e results we achieved reect the on-
going collaboration with our business partners
and, above all, the extraordinary dedication of
our employees who I would like to thank for the
commitment shown at a particularly complicat-
ed moment in time.
In the past few days we have, unfortunately,
been witness to tragic scenes of war which have
left us profoundly shaken and concerned about
possible future developments. We feel close to all
the victims of this terrible conict and, more spe-
cically, our number one priority is to provide the
assistance needed to guarantee the safety of our
personnel and their families.
Toward this end, we, nonetheless, intend to
proceed with the investment plans for communi-
cation, as well as for the strengthening of the or-
ganizational structure and production facilities,
consistent with our medium/long-term plan.
Massimo Garavaglia
Chief Executive Ocer and General Manager
L
2021 was a year of important results, in terms of both growth
and value creation. Not only do these results testify to the
success of a strategy based on a long-term vision, product
innovation, manufacturing excellence and continuous
investments, but they also encourage us to continue along the
path we have undertaken, convinced that we can count on the
structural growth trends seen in our “core” segment and the
strength of our brands.
“
Letter form the CEO
e
De’ Longhi
Group
The De' Longhi Group
5De’ Longhi Group
O
Our vision,
our mission,
our values
The Group has its roots in the early 1900s when the
de’Longhi family founded a workshop for the pro-
duction of industrial components; over the years it
became a manufacturer of nished goods for third
parties; in 1974 the rst De’Longhi brand appliance
was launched, marking the beginning of the
Group’s history.
Known initially as a manufacturer of portable electric
heaters and air conditioners, over the years the Com-
pany increased the range of products produced.
Today, the Group offers a range of small domestic
appliances for the preparation of coffee, food-
preparation and cooking, comfort (air conditioning
and heating), as well as home care, and operates
mainly through the three brands, De’Longhi, Ken-
wood and Braun.
The Group aims to strengthen its global leadership,
reaching consumers worldwide with superior solu-
tions for design, quality and technology.
The strong points that the Group can count on to
achieve these goals include a portfolio comprised
of strong, unique and diversied brands, the ability
to see the new market trends, an extensive global
reach, as well as the diversity and talent of its
people.
The Group’s values reect who we are, our charac-
ter, and our way of being and working. They are
ideals that guide the Group’s operations through
the day-to-day work of its people and their
projects.
Heritage
Passion
Respect
Competence
Ambition
Teamwork
Courage
Our values
Recently, the product range was increased thanks
to the acquisition of Capital Brands Holding Inc., an
American company active in the personal blenders
segment with the Nutribullet and Magic Bullet
brands and the Eversys Group, active in the profes-
sional espresso coffee machine sector.
Worldwide, Every Day, by your Side
A desiderable object, An emotion,
An authentic experience
To be lived, To be shared.
The De' Longhi Group
6De’ Longhi Group
B
We design products
and experiences
Each product is born out of research,
development, and engineering involving our
technical units as well as the Marketing and
Design divisions.
After dening the solution, the Group purchases
the required raw materials and inputs.
From raw materials
to products
The purchased raw materials and
components are shipped to the Group’s
production sites and to the partners that
manufacture and assemble the products.
The process is structured around specialized
centers where a specic product is always
manufactured inside the same plant.
Reaching customers
and consumers
The products are shipped from the sourcing
centers and logistics hubs to the various
warehouses and then distributed across the
Group’s entire sales network.
Test after test,
quality and safety
At the end of the manufacturing process all
products, including the solutions made by the
partners that supply nished products, are
tested to guarantee the highest safety and
quality standards.
Business model
The De' Longhi Group
7De’ Longhi Group
S
The De’Longhi Group is committed to pursuing the
gradual inclusion of issues relating to environmen-
tal and social sustainability, as well as governance,
in its strategy, risk management and compensation
processes, promoting a systemic and transparent
approach, respectful of the standards found in the
Code of Ethics, with a view to also guaranteeing di-
versity, equal opportunity, fairness and no discrimi-
nation of any sort.
Toward this end, 2021 marked the beginning of a
new chapter in the Group’s sustainability path,
shaped by Sustainable Success.
This led De’Longhi to rethink its sustainability gov-
ernance which now comprises:
• the Control, Risk, Corporate Governance and
Sustainability Committee - a Board committee
with proactive guidance and advisory functions;
• Sustainability Steering Committee - comprised
of different department managers, responsible
for dening the sustainability strategy, as well as
the relative strategic plan;
• three Focus Groups - one for each of the Group’s
sustainability pillars (People, Products and Pro-
cesses). A Team Leader was selected who is re-
sponsible for the supervision/implementation of
the projects included in the plan relative to his/
her own area of expertise;
• the Group’s Sustainability Director, appointed in
2021.
In addition to dening the new governance, in 2021
the Group also:
• analyzed the main ESG best practices world-
wide, ESG requisites and the requests from cli-
ents and partners;
• dened the areas of commitment that the Group
intends to focus on in the future;
• prepared a Manifesto (targeting all Group per-
sonnel), which cements the renewed commit-
ment to sustainability and aims to create a trans-
versal commitment for the entire internal
community;
• identied, as well as started, the single projects
that the Group intends to work on over the next
few months;
• entered into strategic partnerships with Italy’s
main universities.
The Group also:
• updated its materiality analysis (which also in-
cluded an update on the identication of the rele-
vant stakeholders) in light of the Group’s new
sustainability strategy drawn up in 2021;
• included the list of the risks associated with sus-
tainability in the Group’s ERM.
Sustainability was also identied as on the most
important key enablers in the Medium Term Plan
2021-2023, which conrms how important the con-
cept of “Sustainable Success” is to the De’Longhi
Group.
Sustainability
The De' Longhi Group
8De’ Longhi Group
C
Board of Directors
Giuseppe De’Longhi Chairman
Fabio De’Longhi Vice Chairman
Massimo Garavaglia Chief Executive Ocer
Silvia De’Longhi Director
Massimiliano Benedetti** Director
Ferruccio Borsani** Director
Luisa Maria Virginia Collina** Director
Renato Corrada Director
Carlo Garavaglia Director
Maria Cristina Pagni** Director
Stefania Petruccioli** Director
Giorgio Sandri Director
Board of Statutory Auditors
Cesare Conti Chairman
Paola Mignani Standing member
Alberto Villani Standing member
Laura Braga Alternate auditor
Alberta Gervasio Alternate auditor
External Auditors
PricewaterhouseCoopers S.p.A.***
Control, Risks, Corporate Governance
and Sustainability Committee
Stefania Petruccioli**
Maria Cristina Pagni**
Renato Corrada
Remuneration and Appointments Committee
Maria Cristina Pagni**
Stefania Petruccioli**
Carlo Garavaglia
Independent Committee
Maria Cristina Pagni**
Massimiliano Benedetti**
Ferruccio Borsani**
Luisa Maria Virginia Collina**
Stefania Petruccioli**
* The company ocers were elected at the shareholders’
meeting of 30 April 2019 for the period 2019-2021. The
number of Board of Directors members was increased to
12 following the appointment by the Shareholders’ Meeting
on 22 April 2020 of Massimo Garavaglia as a member of
the Board of Directors, granted powers as Chief Executive
Ocer, through the end of the Board’s term.
** Independent directors.
*** Assigned by the shareholders’ meeting of 24 April 2018 for
the nancial years 2019-2027.
Company ocers
*
The De' Longhi Group
9De’ Longhi Group
K
Consolidated revenues by geographical area
Consolidated revenues by product category
Europe
Americas
Asia Pacic
MEIA
Acquisitions
Coffee
Cooking and food preparation
Comfort
Cleaning and ironing
Other (*)
Key performance
indicators
* Includes other revenues, impact of economic hedges on rev-
enue and other changes in operating/statutory revenues.
Consolidated
revenues
3,221.6
euro mln
Consolidated
revenues
like-for-like
2,922.1
euro mln
+24.3%
(+25.2% at constant exchange rates)
4%
4%
4%
5%
52% 55%
28%
27%
10%
11%
2020 2021
122.5
1,628.4
2,033.0
+24.8%
266.9
346.5
+29.8%
367.7
+10.3%
175.0
+42.9%
299.5
333.5
2020 2021
2017
2018
2019
2020
2021
1,972.8
2,078.4
2,101.1
2,351.3
3,221.6
2,922.1 299.5
Revenues
Acquisitions
Growth rate
6.8%
5.4%
1.1%
11.9%
24.3%
The De' Longhi Group
10De’ Longhi Group
2020 NFP
Curr. op. & NWC mov.
Capex
Dividends
M&A
Net equity mov.
2021 NFP
228.0
502.6
(132.3)
(80.8)
(129.4)
37.1
425.1
EBITDA before non-recurring/
stock option costs
515.0
euro mln
16% of revenues
at constant perimeter equal to €456.0 million
Operating NWC
199.7
euro mln
6.2% of revenues
NFP
425.1
euro mln
Operating cash ow and increase in NWC
of €502.6 million
515.0
456.0 58.9
2020
2021
366.5
EBITDA
Acquisitions
EBITDA/Net revenues
15.6%
16.0%
199.7
2020
2021
247.2
Operating NWC
Operating NWC/Net revenues
10.5%
6.2%
The De' Longhi Group
11De’ Longhi Group
Results
(€/million) 31.12.2021 %
31.12.2021
on like-for-like
basis
% 31.12.2020 %
Change
on like-for-like
basis
Change
on like-for-like
basis %
Revenues 3,221.6 100.0% 2,922.1 100.0% 2,351.3 100.0% 570.9 24.3%
Revenues at constant exchange rates 3,250.9 100.0% 2,942.0 100.0% 2,349.7 100.0% 592.3 25.2%
Net industrial margin 1,600.2 49.7% 1,473.2 50.4% 1,157.1 49.2% 316.2 27.3%
EBITDA before non-recurring/stock option costs 515.0 16.0% 456.0 15.6% 366.5 15.6% 89.5 24.4%
EBITDA 480.6 14.9% 431.4 14.8% 343.0 14.6% 88.4 25.8%
EBIT 386.9 12.0% 350.8 12.0% 262.0 11.1% 88.8 33.9%
EBIT before non-recurring/stock option costs 421.3 13.1% 375.4 12.8% 285.5 12.1% 89.9 31.5%
Prot (loss) pertaining to the Group 311.1 9.7% 258.7 8.9% 200.1 8.5% 58.5 29.2%
Net result before non-recurring/stock option costs 312.8 9.7% 278.3 9.5% 218.0 9.3% 60.2 27.6%
Dati patrimoniali e nanziari
(€/million) 31.12.2021 31.12.2020 (*)
Net operating working capital 199.7 247.2
Net operating working capital/Revenues 6.2% 10.5%
Net working capital (8.6) 103.2
Net capital employed 1,145.5 1,039.4
Net nancial assets 425.1 228.0
of which:
- net bank nancial position 505.9 303.8
- other nancial receivables/(payables) (80.8) (75.8)
Net equity 1,570.6 1,267.4
* As required by IFRS 3, the balance sheet gures at 31 December 2020 have been restated to reect the denitive accounting of the Capital Brands business combination.
The De' Longhi Group
12De’ Longhi Group
The income statement and balance sheet gures
commented on below reect the change in the
scope of consolidation explained by the recent
acquisitions.
For the sake of a better comparison the like-for-like
gures, namely excluding the consolidation of Cap-
ital Brands and Eversys, are also provided where
needed.
The balance sheet and nancial gures at 31 De-
cember 2020 have been restated, in accordance
with IFRS 3, as a result of the denitive accounting
of the Capital Brands business combination.
The gures at constant exchange rates are calculated
excluding the effects of converting currency balances
and the accounting of derivative transactions.
This report contains forward - looking statements,
specically in the “Outlook” section which, by
nature, have a component of risk and uncertainty
as they depend on future events and develop-
ments. At the date of this report, there is a high
level of uncertainty which calls for caution when
making economic forecasts as the economic pros-
pects continue to depend on the pandemic and the
ensuing supply chain disruptions, as well as the
dramatic geopolitical tensions between Russia and
Ukraine. The actual results could, therefore, differ
from the ones presented.
I
Introduction and denitions
Report on
operations
Report on operations
14De’ Longhi Group
P
Performance review
2021 was an extremely favorable year for the
De’Longhi Group during which, after a very positive
2020 that created a challenging comparison base,
the trend in revenue growth continued with double
digit growth, improved margins and signicant
cash generation.
The ongoing change in domestic lifestyles provided
all the main markets with important growth opportu-
nities which De’Longhi was able to make the most of,
leveraging on the strength of its brand and the invest-
ments in communication, innovation and marketing
made also support the goals for future growth.
2021 was characterized by sizeable investments in
promotional activities and high impact communi-
cation campaigns consistent with the strategy to
accelerate the marketing and communication initi-
atives implemented in the past few years as part of
the medium term plan.
The new advertising campaign, the rst global
campaign, stars Brad Pitt who was chosen to be a
De’Longhi brand ambassador for home espresso
coffee machines. The campaign was adapted to
local needs solely in China where the actor and
singer, Hu Ge, acts as testimonial.
In 2021, however, the global market conditions
were affected by the gradual increase in the com-
plexity of the entire consumer goods sector with
supply chain pressures due to the diculties en-
countered in nding raw materials and the general
increase in production and transportation costs. In
this backdrop the Group, demonstrating its proven
ability in managing complex situations, faced the
critical issues by leveraging on the collaboration
with its business partners, the commitment of its
people and the continuous improvement and ex-
pansion of its production capacity.
Important investments were made in strengthen-
ing production, as well as the development and
launch of new products with a view to expanding
and renewing the offer range, making it increasing-
ly more interesting for consumers and in line with
their expectations.
The attention paid to the development of new prod-
ucts is conrmed clearly by the investments made
in infrastructure, rst and foremost in the new
headquarters/innovation center, which will mainly
be used to strengthen research and development,
that is nearing completion.
The dedication of the personnel, during a particu-
larly complicated period, was rewarded with a spe-
cial bonus that was given in recognition of the
strong contribution that all the employees and part-
ners made to the Group’s growth.
The like-for-like growth achieved in 2021 was fur-
ther strengthened by the contribution of the recent
acquisitions.
Capital Brands, which became part of the Group as
of the end of December 2020, with the brands Nu-
tribullet and MagicBullet, made it possible to
strengthen the healthy food and wellness segment
and meet the consumers’ growing demand for nat-
ural, healthy foods.
Eversys, rather, made it possible to get closer to the
segment of professional espresso coffee ma-
chines with innovative, high-end products.
In both cases, the recently acquired companies
made a positive contribution, in line with manage-
ment’s expectations.
1
For the sake of a better comparison the like-for-like
gures, namely excluding the consolidation of the
newly acquired companies, are also provided
where needed.
The Group posted revenues of €3,221.6 million in
2021, an increase of 37.0% compared to 2020, with
like-for-like revenues rising 24.3% (+25.2% at con-
stant exchange rates) to €2,922.1 million.
The fourth quarter made a positive contribution
with growth of 22.1% (+11.4% like-for-like) com-
pared to the same period of 2020 which was a chal-
lenging comparison base given the increase of
10.1% against 2019.
Growth beneted from a signicant increase in vol-
umes and a positive price effect which made it pos-
sible for the margins to hold despite the strong in-
ationary pressures. The exchange effect was
negative in the year (-€30.8 million; -€21.4 million
like-for-like).
1 The Capital Brands Holding Inc. acquisition closed on 29
December 2020 for consideration, including after the ad-
justed purchase prices was determined, of USD 354.9 mil-
lion (equity value).
After purchasing the remaining 60% stake in Everysys (for
CHF 110 million), full control of Eversys was reached. Ever-
sys was consolidated on a line-by-line basis as of 1 April
2021 based on the latest available interim nancial
statements.
The purchase price for the assets acquired and liabilities
assumed was allocated at 31 December 2021 for both ac-
quisitions; for more information refer to “Changes in the
scope of consolidation - business combinations” in the ex-
planatory notes.
With regard to Eversys, once total control was acquired the
stake held previously was measured at fair value and the
result of the valuation was recognized in the income state-
ment for the reporting period in accordance with IFRS 3.
Report on operations
15De’ Longhi Group
All the main markets posted a positive
performance.
In Europe like-for-like revenues amounted to
€2,033.0 million, an increase of 24.8% (+25.6% at
constant exchange rates) with respect to 2020
which was 14.7% higher than in 2019. All the mar-
kets reported double-digit growth, as did the entire
brand portfolio. Coffee machines made a strong
contribution. Sales of the Kenwood kitchen ma-
chines were noteworthy, fueled by lifestyle changes
and the renewed passion for cooking, posting
growth consistent with the prior year. The other
food preparation products and irons also recorded
good results. Comfort’s performance was un-
changed, particularly for portable air conditioners.
In Americas (which includes the markets of North,
Central and South America) revenues reached €
562.8 million, or €346.5 million like-for-like, show-
ing robust growth (+29.8%; +33.3% at constant ex-
change rates) to which all the product families
made a balanced contribution. The United States
and Canada reported double-digit growth thanks to
the contribution of the historic brands, De’Longhi
and Braun, and the positive results of the Nespres-
so platform products. Coffee products maintained
very good growth and positive results were also
posted by the home comfort segment, both air
treatment and heaters.
Asia-Pacic recorded like-for-like revenues of
€367.7 million, an increase of 10.3% compared to
2020 (+9.2% at constant exchange rates). Australia
and New Zealand recorded double-digit growth and
Greater China reported good results driven by
coffee machines, specically the La Specialista
line. In Japan the good sales performance of coffee
products and handblenders helped to offset a weak
heating segment attributable to unfavorable weath-
er conditions.
MEIA closed the year with like-for-like revenues of
€175.0 million, an increase of 42.9% (+46.4% at
constant exchange rates). The positive perfor-
mance is attributable, above all, to coffee machines
which benetted from the new advertising cam-
paign and the launch, in the second half, of Nes-
presso/Dolcegusto platform products in a few
select countries. Food preparation products also
recorded good results, thanks also to the introduc-
tion of a few models customized to meet the spe-
cic needs of the market. More in detail, Braun
brand handblenders drove growth with good re-
sults in Egypt and Saudi Arabia despite temporary
procurement issues.
Looking at business lines, all the product families
recorded growth, with the exception of home care
which closed the year with sales basically in line
with 2020.
More in detail, coffee machines and food prepara-
tion products posted double-digit growth in sales.
Comfort reported positive results even though the
summer weather in Europe was not favorable.
In terms of margins, 2021 benetted from a combi-
nation of higher volumes and the improved ecien-
cy in production, as well as a positive price and mix
effect which offset the strong pressures caused by
the increase in procurement and transportation
costs explained by the diculties encountered
nding raw materials and parts, as well as moving
merchandise. The negative impact of exchange dif-
ferences and hedges on revenues was largely
offset by the positive impact on costs.
The net industrial margin came to €1,600.2 million,
or 49.7% of revenues.
Like-for-like the net industrial margin was €1,473.2
million, rising against 2020 both numerically
(+€316.2 million or +27.3%) and as a percentage of
revenues (going from 49.2% of revenues in 2020 to
50.4% in 2021).
Consistent with its medium/long term plan, the
Group continued investing in promotional activities
and advertising to support brands and products
with total costs reaching €395.1 million like-for-like,
an increase of more than 30% against the prior
year. These costs include the outlays for the new
ambassadors and the global advertising
campaign.
EBITDA before non-recurring/stock option costs
came to €515.0 million or 16.0% of revenues.
Like-for-like EBITDA before non-recurring/stock
option costs amounted to €456.0 million (15.6% of
revenues), showing growth of 24.4% against the
prior year.
In 2021 the Group recognized €3.6 million in no-
tional stock option costs and non-recurring costs
of €30.8 million relating primarily to the special
bonus given to employees and partners, the eco-
nomic impact of the fair value allocated to the Cap-
ital Brands and Eversys business combinations
and the revised valuation of a few current assets as
a result of the recent geo-political crisis which were
recognized and reported separately.
EBIT came to €386.9 million or €350.8 million like-
for-like (€262.0 million in 2020), equal to 12.0% of
revenues.
Financial income of €13.3 million was recognized
in 2021 which also reects €25.3 million in non-re-
curring items stemming mainly from the revalua-
tion of the non-controlling interest held in Eversys
carried out once total control was acquired in ac-
cordance with IFRS 3.
Taxes amounted to €88.5 million.
Net of the non-controlling interests of €0.7 million,
the Group’s portion of net prot came to €311.1
million (€200.1 million in 2020).
With regard to the nancial position, 2021 was a
complex year also with regard to the management
of working capital which was impacted by the need
to nance business growth and the supply chain
bottlenecks which affected, above all, the value of
the inventory, which was higher than in 2020 due to
the prudent management of stock in a dicult con-
text; despite all of this, the careful management of
trade receivables and payables made it possible to
keep working capital under control with good cash
generation.
Net operating working capital amounted to €199.7
million (6.2% of revenues), higher both numerically
and as a percentage of rolling revenues compared
to 31 December 2020 (€247.2 million or 10.5% of
revenues).
The net nancial position, which reects the impact
Report on operations
16De’ Longhi Group
of the recent acquisitions, came to a positive
€425.1 million at 31 December 2021 (versus
€228.0 million at 31 December 2020).
Net a few specic nancial items, including mainly
the fair value measurement of derivatives, the re-
sidual debt for business combinations and pension
fund transactions, the net nancial position with
banks came to a positive €505.9 million (versus
€303.8 million at 31 December 2020).
Operating cash ow and the movements in NWC
reached a positive €502.6 million in 2021, due to
the increase in protability and good management
of working capital.
This cash ow made it possible to cover the invest-
ments, the acquisitions made in the reporting
period, as well as the payment of dividends.
Total cash ow came to a positive €197.1 million in
the year (versus net absorption of €49.8 million in
2020).
Report on operations
17De’ Longhi Group
G
Group results
The reclassied De’Longhi Group consolidated income statement is summarized as follows:
(€/million) 31.12.2021 % revenues
31.12.2021
on LFL basis
% revenues 31.12.2020 % revenues
Revenues 3,221.6 100.0% 2,922.1 100.0% 2,351.3 100.0%
Change 870.3 37.0% 570.9 24.3%
Materials consumed & other production costs
(production services and payroll costs)
(1,621.4) (50.3%) (1,448.9) (49.6%) (1,194.2) (50.8%)
Net industrial margin 1,600.2 49.7% 1,473.2 50.4% 1,157.1 49.2%
Services and other operating expenses (845.9) (26.3%) (799.3) (27.4%) (597.2) (25.4%)
Payroll (non-production) (239.3) (7.4%) (218.0) (7.5%) (193.4) (8.2%)
EBITDA before non-recurring/stock option costs 515.0 16.0% 456.0 15.6% 366.5 15.6%
Change 148.5 40.5% 89.5 24.4%
Non-recurring expenses/stock option costs (34.3) (1.1%) (24.6) (0.8%) (23.5) (1.0%)
EBITDA 480.6 14.9% 431.4 14.8% 343.0 14.6%
Amortization (93.7) (2.9%) (80.6) (2.8%) (81.0) (3.4%)
EBIT 386.9 12.0% 350.8 12.0% 262.0 11.1%
Change 124.9 47.7% 88.8 33.9%
Net nancial income (expenses) 13.3 0.4% (9.9) (0.3%) (5.7) (0.2%)
Prot (loss) before taxes 400.3 12.4% 340.9 11.7% 256.3 10.9%
Taxes (88.5) (2.7%) (82.2) (2.8%) (56.2) (2.4%)
Net Result 311.7 9.7% 258.7 8.9% 200.1 8.5%
Minority interests 0.7 0.0% - 0.0% - 0.0%
Prot (loss) pertaining to the Group 311.1 9.7% 258.7 8.9% 200.1 8.5%
The net industrial margin reported in the reclassied income
statement differs by €292.8 million in 2021 (€183.2 million in
2020) from the consolidated income statement as, in order to
better represent the period performance, production-related
payroll and service costs have been reclassied from payroll
and services, respectively, and non recurring expenses have
been separately reported.
Report on operations
18De’ Longhi Group
Revenues
The De’Longhi Group posted revenues of €3,221.6
million in 2021, an increase of 37.0% compared to
2020, (+38.4% at constant exchange rates).
Excluding the contribution of the newly acquired
Capital Brands and Eversys, like-for-like revenues
rose 24.3% (+25.2% at constant exchange rates) in
2021 to €2,992.1 million.
The fourth quarter made a sizeable contribution
with growth of 22.1% (+11.4% like-for-like) com-
pared to the same period of 2020 which was a chal-
lenging comparison base given the increase of
10.1% against 2019.
All the main markets and product segments report-
ed revenue growth, with the exception of home
care which closed the year with sales basically in
line with 2020.
Higher volumes were key to revenue growth.
The price management policies/strategies helped
to offset the impact that ination had on the costs
of raw materials and transportation which made it
possible to maintain margins in a complex
environment.
The exchange effect was negative for €30.8 million
in the year (negative for €21.4 million on the like-
for-like revenues).
In 2021 investments in commercial activities to
support both traditional channels and the digital
platforms continued. In all the main European mar-
kets the Group continued with the implementation
of its in-store execution program in order to im-
prove the sell-out of strategic products in physical
stores. The activities to strengthen the e-com-
merce platforms continued at the same time.
Sales beneted from the initial positive effects of
the massive communication and promotional cam-
paigns, like the new global campaign supporting
the growth of coffee products and the visibility pro-
vided by the ambassadors, which increased the
visibility of the Group’s brands and products.
Markets
In light of the growing importance of the Americas
(which includes the markets of North, Central and
South America), as of the rst quarter of 2021 its
revenues are shown separately from the Asia Pacif-
ic countries.
The performance of revenues in the different com-
mercial regions is summarized below. For the sake
of greater comparison, the gures are reported like-
for-like, namely excluding the contribution of Capi-
tal Brands and Eversys. Unless specied otherwise,
the comments in this report refer to the Group’s re-
sults in its pre-acquisition conguration.
(€/million) 2021 %
2021
on like-for-
like basis
% 2020 %
Change
on like-for-
like basis
Change %
on like-for-
like basis
Change at
constant
exchange
rates %
on like-for-
like basis
Europe 2,076.3 64.4% 2,033.0 69.6% 1,628.4 69.3% 404.5 24.8% 25.6%
Americas 562.8 17.5% 346.5 11.8% 266.9 11.3% 79.6 29.8% 33.3%
Asia Pacic 400.3 12.4% 367.7 12.6% 333.5 14.2% 34.2 10.3% 9.2%
MEIA (Middle East/
India/Africa)
182.3 5.7% 175.0 6.0% 122.5 5.2% 52.5 42.9% 46.4%
Total revenues 3,221.6 100.0% 2,922.1 100.0% 2,351.3 100.0% 570.9 24.3% 25.2%
Report on operations
19De’ Longhi Group
In Europe, continuing the path of accelerated growth
begun in the prior year, the Group posted revenues of
€2,033.0 million, an increase of 24.8% (+25.6% at
constant exchange rates) compared to 2020 which
was a challenging comparison base given the in-
crease of 14.7% against 2019. Coffee machines,
which showed improvement in all product catego-
ries, made a strong contribution to growth. More in
detail, the fully automatic machines were given a
boost by the “Perfetto” campaign. Manual models
and Nespresso platform products reported positive
results. Sales for Kenwood brand kitchen machines,
which were positively impacted by the new lifestyles
and renewed passion for cooking, posted signicant
growth, consistent with the prior year. The other
cooking and food preparation products also report-
ed positive results. The Braun brand, in particular,
benetted from the communication campaign fo-
cused on the brand’s 100th anniversary. Comfort
posted a stable performance, above all with respect
to portable air conditioners. All the region’s main
markets recorded double-digit growth; Germany’s
performance was particularly good, followed by
France and Italy which posted very positive results
for fully automatic machines (and coffee products,
in general). Russia and Ukraine recorded sales
growth, despite the negative exchange effect. Sales
in Poland were up thanks, above all, to the contribu-
tion of coffee which benetted from the launch of
the La Specialista line of manual machines. Positive
results were achieved in the United Kingdom despite
a few logistics issues explained by both Brexit and
the health crisis.
In the Americas (which includes the markets of
North, Central and South America), which is now
the Group’s biggest market, revenues amounted to
€562.8 million thanks to the contribution of the new
brands Nutribullet and MagicBullet, introduced at
the end of the year, or €346.5 million like-for-like,
posting robust growth (+29.8%; +33.3% at constant
exchange rates) to which all the product families
made a balanced contribution. The United States
and Canada reported double-digit growth thanks to
the contribution of both the De’Longhi and Braun
brands, as well as the positive results of the Nes-
presso platform products. Coffee products main-
tained very good growth and positive results were
also posted by the home comfort segment, both air
treatment and heaters.
Asia-Pacic recorded revenues of €367.7 million,
an increase of 10.3% compared to 2020 (+9.2% at
constant exchange rates).
Australia and New Zealand recorded double-digit
growth thanks to the contribution of coffee ma-
chines, particularly the La Specialista line.
Positive results were reported in Greater China
thanks to coffee products which benetted from
the sizeable investments made in communication
campaigns to support the launch of the manual
and the fully automatic La Specialista machines.
The completed implementation of the DTC busi-
ness model on TMall contributed to sales growth,
improved margins and receivables management.
In Japan the good sales performance of coffee
products and handblenders helped to offset a weak
heating segment attributable to unfavorable weath-
er conditions.
MEIA closed the year with revenues of €175.0 mil-
lion, an increase of 42.9% (+46.4% at constant ex-
change rates). The positive performance is attribut-
able, above all, to coffee machines which benetted
from the new advertising campaign and the launch,
in the second half, of Nespresso/Dolcegusto plat-
form products in a few selected countries. Food
preparation products recorded good results, thanks
also to the introduction of a few models custom-
ized to meet the specic needs of the market. More
in detail, Braun brand handblenders drove growth
with good results in Egypt and Saudi Arabia despite
temporary procurement issues.
Business lines
All the product families, with the exception of home
care which closed the year basically in line with
2020, made a positive contribution to growth.
Coffee products posted double-digit growth in
sales thanks to the good results of all the product
categories. Fully automatic coffee machines
posted positive results in all the commercial areas
which contributed to increasing market share, con-
rming and strengthening the De’Longhi brand as
the segment leader. Germany was conrmed as
the main market, but excellent results were also re-
corded in France, Greater China, Italy and Spain/
Portugal. The biggest novelty in 2021 was the
launch, in the fourth quarter, of the Magnica Evo
model. Excellent results were also achieved by the
PrimaDonna Soul model, launched in September
2020 and winner of the StiWa (Stiftung Warentest).
Looking at manual machines, the good results
were driven by the new models, La Specialista
Maestro and La Specialista Arte. The Dedica line
also posted a good performance, boosted by the
introduction of the new Dedica Arte and a few new
color options for the Metallics collection.
Food preparation also reported double-digit growth
in sales. The new consumer lifestyle, much more
focused on healthy eating and sustainable con-
sumption, contributed to the good performance.
Kitchen machines benetted from the introduction
of the new Titanium Chef Baker which offers inte-
grated weighing scales, at what is still a competi-
tive price, and the new color options, inspired by
nature, of the kMix line.
In 2021 the Group increased its market share for
handblenders. The family of Braun brand hand-
blenders had an important role in this regard with
the introduction of three new models, the Mul-
tiQuick7, the MultiQuick 9 and the Multiquick 5V
Blend&Go, high performing products offered at a
competitive price. The Kenwood Triblade line also
reported good results.
Positive results were achieved by both traditional
and air fryers, particularly the Idealfry line.
The breakfast line and other food preparation prod-
ucts made a positive contribution.
Growth was recorded by comfort despite the unfa-
vorable summer in Europe.
Home care, which comprises mainly home clean-
ing products and irons, closed the year with sales
largely in line with 2020.
Protability
Despite the complex global market conditions, in
2021 the Group managed to improve its margins.
In terms of production, the signicant increase in
volumes helped improve eciency. From a com-
mercial standpoint, steps were taken to redene
sales prices which made it possible to offset the
strong pressures caused by the increase in pro-
curement and transportation costs explained by
the diculties encountered nding raw materials
and parts, as well as moving merchandise.
The negative impact of exchange differences and
hedges on revenues was largely offset by the posi-
tive impact on costs.
A more favorable client/product mix further
strengthened protability.
The net industrial margin came to €1,600.2 million,
or 49.7% of revenues.
Like-for-like the net industrial margin was €1,473.2
million, rising against the same period 2020 both
numerically (+€316.2 million, +27.3%) and as a per-
centage of revenues (from 49.2% in 2020 to 50.4%
in 2021).
The Group continued to increase its investments in
Report on operations
20De’ Longhi Group
promotional campaigns and communication as
part of its strategy to accelerate marketing activi-
ties implemented over the last few years, consist-
ent with its medium/long term plan. The total cost
for promotional activities and advertising in 2021,
which includes the costs for the “Perfetto” cam-
paign, came to €395.1 million like-for-like, an in-
crease of more than 30% against the prior year
(+€102.3 million).
EBITDA before non-recurring/stock option costs
came to €515.0 million or 16.0% of revenues.
Like-for-like EBITDA before non-recurring/stock
option costs amounted to €456.0 million (15.6% of
revenues), showing growth of 24.4% against the
prior year.
In 2021 the Group recognized €3.6 million in no-
tional stock option costs. There were also non-re-
curring charges of €30.8 million relating primarily
to the special bonus given to employees and part-
ners, the economic impact of the fair value allocat-
ed to the Capital Brands and Eversys business
combinations and the revised valuation of a few
current assets as a result of the recent geo-political
crisis which were recognized and reported
separately.
Amortization and depreciation were €12.7 million
higher than in 2020, coming in at €93.7 million, due
mainly to the increase in assets attributable to the
new acquisitions.
EBIT came to €386.9 million or €350.8 million like-
for-like (€262.0 million in 2020), equal to 12.0% of
revenues. Net of the non-recurring items, EBIT
would have amounted to €421.3 million (13.1% of
revenues), or €375.4 million (12.8%) like-for-like.
Financial income of €13.3 million was recognized
in 2021 which also reects €25.3 million in non-re-
curring items stemming mainly from the revalua-
tion of the non-controlling interest held in Eversys
carried out once total control was acquired in ac-
cordance with IFRS 3.
Taxes amounted to €88.5 million.
Net of the non-controlling interests of €0.7 million,
the Group’s portion of net prot came to €311.1
million (€200.1 million in 2020).
Net of the non-recurring items and the relative tax
effect, net prot reaches €312.8 million or €278.3
million like-for-like (€218.0 million in 2020).
Report on operations
21De’ Longhi Group
O
Operating segment disclosures
The De’Longhi Group has identied three operating
segments which coincide with the Group’s three
main business regions: Europe, MEIA (Middle East,
India and Africa) and APA (Asia, Pacic, Americas).
Each segment is responsible for all aspects of the
Group’s brands and serves different markets.
This breakdown is in line with the tools used by
Group management to run operations, as well as
evaluate the company’s performance and make
strategic decisions.
The results by operating segment can be found in
the Explanatory Notes.
Report on operations
22De’ Longhi Group
R
Review of the statement
of nancial position
The reclassied consolidated statement of nancial position is presented below:
(€/million) 31.12.2021 31.12.2020 (*)
- Intangible assets 867.9 686.8
- Property, plant and equipment 389.5 323.7
- Financial assets 11.9 34.6
- Deferred tax assets 74.3 58.5
Non-current assets 1,343.6 1,103.5
- Inventories 769.3 432.1
- Trade receivables 366.7 397.3
- Trade payables (936.2) (582.2)
- Other payables (net of receivables) (208.3) (144.0)
Net working capital (8.6) 103.2
Total non-current liabilities and provisions (189.5) (167.4)
Net capital employed 1,145.5 1,039.4
(Net nancial assets) (425.1) (228.0)
Total net equity 1,570.6 1,267.4
Total net debt and equity 1,145.5 1,039.4
(*) As required by IFRS 3, the balance sheet gures at 31 De-
cember 2020 have been restated to reect the denitive
accounting of the Capital Brands business combination.
Net nancial position as at 31 December 2021 includes €
80.8 million in net nancial liabilities (net nancial liabilities
equal to € 75.8 million at 31 December 2020) relating to the
fair value of derivatives and the nancial debt connected to
business combinations, pension fund and nancial liabili-
ties for leasing.
The change in intangible assets, which includes the
investments made in new product development,
refers mainly to the Eversys Group business
combination.
In 2021 the Group made investments totaling
€132.3 million (€89.5 million in 2020), of which
€29.1 million relative to new leases, €87.4 million
relative to property, plant and equipment which in-
cludes the progress made on the innovation
center/new headquarters and the improvements
made at the plants in Romania, Italy and China.
Net working capital was negative for €8.6 million at
31 December 2021 (vs. €103.2 million at year-end
2020).
Net operating working capital amounted to €199.7
million (6.2% of revenues), higher both numerically
and as a percentage of rolling revenues compared
to 31 December 2020 (€247.2 million or 10.5% of
revenues). The trend in net operating working capi-
tal reects the good results achieved in the man-
agement of receivables with a reduction in average
days sales outstanding and the positive dynamic in
trade payables which made it possible to offset the
impact of the increased inventory explained by the
safety stock needed in light of the supply-chain
issues.
Report on operations
23De’ Longhi Group
Despite its sound, solid nancial situation, in 2021, as part of its strategy to extend the average maturity of
its debt and take advantage of the favorable market conditions, the Group decided to increase and diversify
nancial resources by signing agreements for three loans totaling €250 million.
In April 2021 another €150 million tranche of the USPP, maturing in 2041, was issued and underwritten by a
leading US nancial group.
The resources gathered will be used to meet operating needs, as well as the repayment of debt maturities.
The statement of cash ows is presented on a condensed basis as follows:
(€/million) 2021 2020 (*)
Cash ow by current operations 496.9 352.9
Cash ow by changes in working capital 5.8 114.5
Cash ow by current operations and changes in NWC 502.6 467.4
Cash ow by investment activities (132.3) (89.5)
Cash ow by operating activities 370.3 377.9
Acquisitions (129.4) (333.3)
Dividends paid (80.8) (80.8)
Cash ow by treasury shares purchase - (14.5)
Stock options exercise 7.1 21.5
Cash ow by other changes in net equity 30.0 (20.5)
Cash ow generated (absorbed) by changes in net equity (43.7) (94.4)
Cash ow for the period 197.1 (49.8)
Opening net nancial position 228.0 277.8
Closing net nancial position 425.1 228.0
Operating cash ow and the movements in NWC reached a positive €502.6 million in 2021 (vs. €467.4 mil-
lion in 2020), due to the increase in protability and good management of working capital, above all with
regard to trade payables and receivables.
(*) As required by IFRS 3, the balance sheet gures at 31 December 2020 have been restated to reect the denitive accounting of
the Capital Brands business combination.
Details of the net nancial position are shown below:
(€/million) 31.12.2021 31.12.2020 (*)
Cash and cash equivalents 1,026.1 662.9
Other nancial receivables 302.1 243.0
Current nancial debt (292.6) (240.6)
Net current nancial position 1,035.6 665.3
Non-current nancial receivables and assets 70.5 70.0
Non-current nancial debt (681.0) (507.3)
Non-current net nancial debt (610.5) (437.3)
Total net nancial position 425.1 228.0
of which:
- positions with banks and other nancial payables 505.9 303.8
- lease liabilities (75.9) (65.8)
- other nancial non-bank assets/liabilities (fair value of
derivatives, nancial debt connected to business combinations
and pension fund)
(4.9) (10.0)
The net nancial position, which reects the impact of the recent acquisitions, came to a positive €425.1
million at 31 December 2021 (versus €228.0 million at 31 December 2020).
A few, specic nancial items are included in the net nancial position, comprising mainly the fair value
measurement of derivatives, the residual debt for business combinations and pension fund transactions
which had a net negative balance of €4.9 million at 31 December 2021 (negative €10.0 million at 31 Decem-
ber 2020).
The item also includes lease liabilities recognized in accordance with IFRS 16 which amounted to €75.9
million at 31 December 2021 (€65.8 million at 31 December 2020).
Net of these items the net nancial position with banks came to a positive €505.9 million (€303.8 million at
31 December 2020).
Report on operations
24De’ Longhi Group
O
Operations and supply chain
In terms of manufacturing, 2021 was still charac-
terized largely by the management of the problems
connected to the pandemic which impacted both
internal production and external supply, between
Europe and China, due to the global raw materials
crisis.
Despite the unfavorable scenario, the Group
achieved very positive results and guaranteed high
volumes across the entire range of products.
A signicant contribution came from the new plant
in Romania, which was operating at capacity, dedi-
cated to the production of food preparation items,
including handblenders (the range of which was
expanded following the introduction of the new
Braun MQ7). During the year the start of the project
to expand one of the two Chinese production sites
was conrmed with a plan that calls for a 30,000
square meter increase in the surface area to be
completed by 2023.
With regard to production, important investments
in automation and digitalization continued in order
to guarantee high quality standards and greater
eciency.
More in detail, the Group received important recog-
nition for the Italian production facility in Mignagola
(TV), which was included in the World Economic
Forum’s Global Lighthouse Network as a result of
the Industry 4.0 solutions adopted.
As for the supply chain, it became necessary to re-
visit a few processes and to improve the perception
that clients have of the service in a post-pandemic
context. The Group, therefore, launched a global
program to revise the forecasting and planning pro-
cesses in order to improve service by using more
exible planning solutions (demand, production,
procurement) and the implementation of new sys-
tems, giving preference to automation in order to
obtain greater eciency.
Report on operations
25De’ Longhi Group
R
Research and development
- Quality control
In 2021 R&D continued to invest signicantly par-
ticularly in digital technologies and connectivity
with a growing focus on shifting the approach from
a product experience to a consumer experience.
The coffee products offer was strengthened by the
introduction of a new platform with “only coffee”
and “single use milk” solutions, present in the new
fully automatic model Magnica Evo, launched in
the fourth quarter, which is compact and features a
new design.
In addition to strengthening the presence of the
Maestro and Prestige models in new geographies,
the family of manual La Specialista machines was
expanded following the launch of the new Arte
model, a new compact model which, thanks to the
combination of a manual machine with an integrat-
ed coffee grinder, provides a better consumer
experience.
In food preparation, a platform which uses a learn-
ing system to include an even greater number of
recipes in the machines, accessible in all languag-
es, was launched. 2021 also saw the launch of a
new range of kitchen machines, the Titanium Chef
Baker, which offers integrated weighing scales at
what is still a competitive price.
In Comfort, given the growing attention to healthy
environments, a new air treatment system with
UV-C lters was introduced, effective against virus
and bacteria (90%) and equipped with Eco Real
Feel technology which optimizes energy use and
the consumer’s perceived level of comfort.
In terms of quality control, the Group completed
the renewal of the three-year corporate certication
of the Quality/Environmental System and, on a
local level, obtained ISO 9001/14001 certication
for the new plant in Romania and the production
facility of the newly-acquired Eversys, as well as
ISO 22000 (Food Contact) certications for the
plants in Italy and Romania.
Report on operations
26De’ Longhi Group
C
Communication activities
In 2021 promotional activities and communication
were key for the Group which invested in high-im-
pact campaigns carried out using digital channels
and social media, as well as more traditional
means.
With regard to the De’Longhi brand, an important
milestone was reached in 2021: the rst global
launch of a communication campaign starring
Brad Pitt, chosen as the brand’s ambassador for
espresso coffee machines. The campaign’s launch
video was directed by Oscar winner, Damien Cha-
zelle, who used the cinematography of Linus Sand-
gren and music by Justin Hurwitz (both Oscar
winners).
For a few single markets, like China, the campaign
was customized in order to better interpret local
tastes and imagery. For the Chinese market Hu Ge,
an actor and singer who is very popular on all of
China’s social media platforms, was chosen to act
as the testimonial. In this instance the campaign
was launched on a specic day called “Hay Box”
and continued in order to support sales on 11/11.
In addition to the TV advertising spot, the “Perfetto”
campaign entailed intense PR activity, a huge pres-
ence in the press and on billboards, along with im-
pressive displays at retailers. The results have been
impressive in terms of gaining market share and
increased visits on the e-commerce site which, in
the fourth quarter of the year, were almost two
times higher than in the same period of 2020.
As for the new social media strategies, a new Face-
book page was launched, as was a new Instagram
account dedicated to the brand with the
involvement of more 250 inuencers, active both
globally and locally. The investments made it possi-
ble to acquire new followers, increase interaction
and, above all, improve the perception of the brand
as more of a lifestyle brand.
The DeLonghi Coffee Lounge platform, already
present in France, was expanded to include other
markets (UK, Italy, Germany and Australia); this is
an online platform used by consumers to buy
coffee from more than 70 coffee roasters world-
wide and, at the same time, nd information about
the Group’s machines.
The editorial content found on the website was par-
ticularly successful with coffee lovers who, above
all, appreciated the videos of the “Behind your
Coffee” series in which experts share their secrets
or tricks to obtaining the perfect drink.
In a cultural zone of Sydney, Australia, in November
the concept of Coffee Lounge was transformed
into a physical space with the opening of a location
dedicated entirely to De’Longhi where the visitor
could have a complete “coffee experience” experi-
menting and choosing from among the various
types of coffee made with different machines.
Lastly, the Breakfast collection was expanded with
the launch of the Ballerina line, complete with ket-
tles and toasters inspired by the Murano
glassworks.
Looking at the Kenwood brand, in 2021 important
investments were made in the “Kenwood CAN”
communication campaign which is based on a
message that celebrates creative cooking and the
many possibilities that the food preparation
products provide. More in detail, the rst social
media based campaign was used to launch the
new Titanium Chef Baker model in order to reach a
new target of consumers, the millennials.
More digital content was produced including, for
example, videos of recipes; in 2021 the messages
strived to reect the new trends focused on healthy
eating, vegetarian/vegan diets, sustainable con-
sumption, in order to engage a vaster audience.
The launch in three key markets of the new e-com-
merce platform based on a DTC business model
which made the entire purchase process easier for
the consumer marked an important achievement.
2021 was Braun 100th anniversary celebrated, in
partnership with P&G for the personal care seg-
ment, with an important online and oine commu-
nication campaign and the sale of a few limited
edition models which represent the idea of excel-
lence in design embodied by the brand.
Another campaign called “Hate waste. Love imper-
fect” was also developed which focuses on the
ways to use products and prepare food, while em-
phasizing the very current topic of sustainable con-
sumption and waste reduction.
During the year all the launches of new models
were supported by specic communication cam-
paigns, while investments in digital continued, par-
ticularly in the website braunhousehold.com.
Report on operations
27De’ Longhi Group
H
Human Resources
Here follows a detail of the average workforce in
2021:
2021 2020
Blue collars 6,694 5,746
White collars 3,074 2,753
Managers 301 279
Total 10,069 8,778
The Group had an average of 10,069 employees in
2020, an increase of 1,291 heads compared to
2020. The change is attributable to the Capital
Brands and Eversys Group acquisitions with an av-
erage of 283 employees overall, while the remain-
der refers to personnel at production facilities.
The health crisis continued to be a critical issue
which required the implementation in all the
Group’s locations - headquarters, commercial
branches and production facilities - of an important
series of actions which aimed to ensure maximum
security and the safety of its employees, while, at
the same time, guaranteeing business continuity.
When possible, remote working was used but utili-
zation changed over the months, based on the se-
verity of the measures adopted in the different
Countries.
In addition to the emergency measures, in 2021 the
Group also worked on important projects relating,
specically, to the professional development of em-
ployees and talent acquisition.
At the end of 2021 the Group’s Linkedin page,
launched ocially in December 2020, had 50,000
followers; through the use of social media visibility
was given to the positions and opportunities of-
fered by the Group.
In order to attract talent, partnerships with impor-
tant universities were developed further and the
rst “International Graduate Program” was
launched.
The welcome events, OnBoardDays, dedicated to
new hires were held virtually for the second year in
a row with the involvement of around 400 new
resources.
During the year, the activities focused on the devel-
opment of soft skills also continued.
At the same time, a learning path dedicated to fair-
ness, diversity and inclusion was also begun which
started by looking at gender equality, analyzing the
pay gaps between the male and female
populations.
In October 2021 the fourth edition of the engage-
ment survey “Your Voice” was completed. As in
prior years, participation was very high. Overall, de-
spite a context rendered more complicated by the
pandemic, the survey conrmed the trend of gradu-
al improvement in all the factors analyzed.
Report on operations
28De’ Longhi Group
R
Report on Corporate Governance
and Ownership Structure
De’ Longhi S.p.A.’s Report on Corporate Govern-
ance and Ownership Structure drawn up in accord-
ance with art.123 - bis of Legislative Decree n.
58/98 (“TUF”) can be found in a report not included
in the Report on Operations, published at the same
time as the latter and available on the company’s
website www.delonghigroup.com (section Home >
Governance > Corporate bodies > Shareholders’
Meeting 2022).
Pursuant to art.16.4 of the Market Regulations
please note that De’Longhi S.p.A. is not subject to
the direction and control of the parent company
DeLonghi Industrial S.A., or of any other party, pur-
suant to and in accordance with articles 2497 et
seq of the Italian Civil Code, insofar as (i) the
Group’s business, strategic and nancial plans, as
well as the budget, are approved independently by
De’Longhi S.p.A.’s Board of Directors; (ii) the nan-
cial and funding policies are dened by De’Longhi
S.p.A.; (iii) De’Longhi S.p.A. conducts its relation-
ships with clients and suppliers in full autonomy;
and (iv) in accordance with the principles of the
Corporate Governance Code, important strategic,
economic, equity and nancial transactions are ex-
amined by the board and approved exclusively by
the Board of Directors.
Report on operations
29De’ Longhi Group
R
Risk management and Internal
Control System relating to the
nancial reporting process
Introduction
The Issuer’s and the De’Longhi Group’s Internal
Control System consists in the set of rules, proce-
dures and organizational structures set in place to
ensure that company strategies are adhered to
and, based on the corporate governance stand-
ards and model included in the COSO report
(Committee of Sponsoring Organizations of the
Treadway Commission), to guarantee:
a. ecient and effective company operations
(administration, production, distribution, etc.);
b. reliable, accurate, trustworthy and timely eco-
nomic and nancial information;
c. compliance with laws and regulations, as well
as the corporate articles of associations, rules
and company procedures;
d. safeguarding of the company’s assets and pro-
tection, to the extent possible, from losses;
e. identication, assessment, management and
monitoring of the main risks.
The executive administrative bodies of the Parent
Company De’ Longhi S.p.A. (Board of Directors,
the Risk and Control, Corporate Governance and
Sustainability Committee, Director in Charge of
the Internal Control and Risk Management
System), the Board of Statutory Auditors, the Di-
rector of Internal Audit, the Supervisory Board, the
Chief Financial Ocer/Financial Reporting Ocer
and all De’Longhi personnel, as well as the Direc-
tors and Statutory Auditors of the Issuer’s subsidi-
aries, are involved in the controls, with different
roles and in function of their expertise and adhere
to the recommendations and principles found in
the guidelines.
The Internal Control System that is subject to ex-
amination and periodic audits, taking into account
changes in the company’s operations and refer-
ence context, makes it possible to address the
main risks to which the Issuer and the Group are
exposed to over time, in a timely manner, as well
as to identify, assess and control the degree of the
exposure of the Issuer and all the other compa-
nies of the De’Longhi Group - particularly the stra-
tegically important subsidiaries - to the different
types of risk, and also makes it possible to
manage the overall exposure taking into account:
i. the possible correlations between the differ-
ent risk factors;
ii. the probability that the risk materializes;
iii. the impact of the risk on the company’s
operations;
iv. the overall impact of the risk.
The internal control and risk management system
relating to the nancial reporting process (admin-
istrative and accounting procedures used to draft
the separate and consolidated annual nancial
statements and the other economic and/or nan-
cial reports and disclosures prepared in accord-
ance with the law and/or regulations, as well as
ensuring correct implementation) coordinated by
the Chief Financial Ocer/Financial Reporting Of-
cer, is an integral and essential part of the
De’Longhi Group’s Internal Control and Risk Man-
agement System.
The Director of Internal Audit - who is in charge of
verifying that the internal control and risk manage-
ment system works eciently and effectively -
prepares a work plan each year that is presented
to the Board of Directors for approval, subject to
the positive opinion of the Risk and Control and
Corporate Governance and Sustainability Com-
mittee and after having consulted with the Board
of Statutory Auditors and the Director in Charge of
the Internal Control and Risk Management
System, based also on the comments made by
the Chief Financial Ocer/Financial Reporting Of-
cer, as well as pursuant to Legislative Decree
262/05. Discusses the steps taken to resolve any
problems, to make the improvements agreed
upon, as well as the results of the testing activities
with the Risk and Control and Corporate Govern-
ance and Sustainability Committee. Provides the
Chief Financial Ocer/Financial Reporting Ocer,
as well as the administrative body assigned, with
a summary report based on which they can
assess the adequacy and application of adminis-
trative procedures to be used to prepare the con-
solidated nancial statements.
Description of main characteristics
The De’Longhi Group uses a system of risk man-
agement and internal control for the nancial re-
porting process that is part of the wider system of
internal controls as required under art. 123-bis
par. 2.(b) of TUF.
For the purposes of ensuring reliable internal con-
trols over its nancial reporting, the Group has im-
plemented a system of administrative and ac-
counting procedures and operations that include
an accounting policies manual, updating in order
to comply with the law and changing accounting
standard, rules for consolidation and interim -
nancial reporting, as well as coordination with
subsidiaries as needed.
The Group’s central corporate functions are re-
sponsible for managing and communicating
these procedures to other Group companies.
The assessment, monitoring and continuous up-
dating of the internal control system relating spe-
cically to nancial reporting is carried out in ac-
cordance with the COSO model and, where
applicable, Law 262/2005. Critical processes and
sub-processes relating to the principal risks have
been identied in order to establish the principal
controls needed to reduce such risks. This has in-
volved identifying the strategically important com-
panies, based on quantitative and qualitative -
nancial parameters (i.e. companies that are
relevant in terms of size and companies that are
relevant just in terms of certain processes and
specic risks).
Having identied these companies, the risks have
been mapped and assessed and the key manual
and automatic controls have been identied and
rated as high/medium/low priority accordingly;
these controls have then been tested.
The perimeter of the companies included in the
mapping for the purposes of Law 262/2005 has
Report on operations
30De’ Longhi Group
changed over the years to reect the changes in
the Group, both quantitative and qualitative, and
this perimeter was also considered for the deni-
tion of companies viewed as strategic.
The general managers and administrative heads
of each Group company are responsible for main-
taining an adequate internal control system and,
given their roles, must certify that the internal con-
trol system works properly.
Internal Audit must also include verication of the
internal controls through the use of a self-assess-
ment check list in its Audit Plan.
With regard to compliance with Consob Regula-
tion 20249 of 28 December 2017 relating to
market regulations (“Regolamento Mercati”),
De’ Longhi S.p.A. controls, directly or indirectly,
seven companies formed and regulated by the
law of countries that are not part of the European
Union considered relevant pursuant to art. 151 of
the issuer regulations (“Regolamento Emittenti”).
With reference to the requirements of art. 15 of
the Market Regulations, it is reported as follows:
• in the issuer’s opinion, these companies have
suitable accounting and reporting systems for
regularly providing management and the audi-
tors of De’Longhi S.p.A. with all the nancial in-
formation needed to prepare the consolidated
nancial statements and perform the audit of
the accounts;
• these companies provide the auditors of
De’Longhi S.p.A. with the information needed to
audit the parent company’s interim and annual
nancial statements;
• the issuer keeps the articles of association of
the aforementioned companies and details of
their company ocers and related powers,
which are constantly updated for any changes
in the same;
• the nancial statements of such companies,
prepared for the purposes of the De’ Longhi
Group’s consolidated nancial statements,
have been made available in the manner and
terms established by existing law. Please note
that the identication and analysis of the risk
factors contained in this report were carried out
including in light of the change in strategic com-
panies as resolved by the Board of Directors.
In order to identify and manage the Company’s
main risks, with regard particularly to corporate
governance and compliance with the law and reg-
ulatory standards (including the Corporate Gov-
ernance Code for Listed Companies), the Issuer
undertook a project for the development and mon-
itoring of a structured ERM model in order to ef-
fectively manage the main risks to which the
Issuer and the Group are exposed.
During 2021, activities for implementing this En-
terprise Risk Management (ERM) project contin-
ued. ERM is aimed at streghtening the risk control
and management system by mapping the main
risks to which the Company is exposed on the
basis of the Group value chain, identifying the in-
herent and of the related residual risk and assess-
ing and implementing action plans for their elimi-
nation/mitigation. Furthermore, the Internal Audit
Director and the Ocer Responsible for Preparing
the Company’s Financial Reports continued the
work for specically and analytically governing the
ERM risk management system, through some ad-
ditional activities.
In 2021 this activity continued by updating exist-
ing risks, the main strategic risks identied by the
Chief Executive Ocer, the analysis of the perime-
ter of the Group’s strategically important foreign
branches, as well as mapping the risks perceived
by the Managers of audited branches.
A list of risks connected to sustainability was also
included in the ERM.
This activity is part of the gradual inclusion of
issues relating to environmental and social sus-
tainability, as well as governance, in the compa-
ny’s strategy, risk management and compensa-
tion processes, promoting a systemic and
transparent approach, respectful of the standards
found in the Code of Ethics, with a view to also
guaranteeing diversity, equal opportunity, fairness
and no discrimination of any sort.
Climate change is included among these new
risks. Toward this end, in 2021 the risk perceived
by the Group’s main companies relative to the
possible impact that climate change could have
on the business was mapped. In 2022 this map-
ping will be expanded to include all the Group’s
branches.
Risk factors for the De’Longhi Group
The risk factors to which the Group is exposed
and that could have a material impact on the
De’ Longhi Group’s business are summarized
below.
These risk factors also take into account the
above mentioned ERM project and the assess-
ments carried out in current year and in prior years
including through more in-depth analyses shared
with the Risk, Control, Corporate Governance and
Sustainability Committee and De’Longhi S.p.A.’s
Board of Statutory Auditors (for a complete analy-
sis of risks please refer to the ERM).
With regard to the main risks highlighted below,
the De’Longhi Group constantly monitors any sit-
uations and changes in macroeconomic and
market trends, as well as demand, in order to im-
plement any necessary and timely strategic
actions.
In addition to the risk factors and uncertainties
identied in this report, other risks and events not
currently foreseeable or thought unlikely, could
also inuence the business, the economic and -
nancial conditions and prospects of the De’Longhi
Group.
1 - Risks relating to macroeconomic trends:
the De’ Longhi Group’s economic perfor-
mance and nancial position are also aect-
ed by macroeconomic trends.
The principal factors refer to:
• trends in consumption;
• cost of raw materials;
• interest and exchange rates;
• any changes in policies introduced in some im-
portant markets (see recent and potential regu-
latory changes in the United States as regards
trade, economic, environmental and tax agree-
ments and the so-called “Brexit” in Great
Britain);
• any disorder, tumult and strikes or any other
kind of demonstration;
• any outbreak and/or serious health issues (see
the current situation with reference to the Coro-
navirus crisis).
The global health crisis, the economic scenario
and the diculties in anticipating economic
cycles, energy prices (oil, above all), the prices and
scarcity of raw materials (plastic and copper), the
ongoing political crises and conicts (particularly
the situation in Ukraine/Russia which has wors-
ened considerably in the last few days), the decid-
ed increase in transportation costs, the political
and economic changes in the United States and
Great Britain (Brexit) could, together with the other
factors referred to in this section, have a signi-
cant impact on the Company’s results and nan-
cial position.
Report on operations
31De’ Longhi Group
De’ Longhi periodically monitors aforesaid eco-
nomic trends in order to be able to implement any
necessary and timely strategic actions.
The Group is also subject to the risks connected
to the spread of epidemics or serious health
issues in the main reference markets which could
interrupt or limit activities in these markets (pro-
duction, the supply chain and/or product sales).
The Group cannot predict these phenomena but,
leveraging on past experience, it is able to react
and implement all the measures needed to limit
the consequences (as was the case in 2020/2021
when, because of the global health crisis, the
Group had to face an unprecedented level of
market uncertainty).
The persistence of these situations, however,
could interrupt and/or limit the Group’s activities
which would have an impact on economic and -
nancial results.
2 - Socio-political risks relating to market
trends and demand, and to the Group’s pres-
ence in emerging markets. e De’ Longhi
Group does business in many foreign mar-
kets, primarily on a direct basis and through
agreements in certain emerging countries
like China.
The Group has therefore long had the characteris-
tics typical of a multinational company and this
inevitably exposes it to a number of risks relating
to economic conditions and policies of the individ-
ual countries in which it operates.
These risks not only affect consumption trends in
the various markets concerned, but may also be
relevant in terms of concentration of the Group’s
production sites in foreign markets if policies
were introduced that limit or restrict foreign in-
vestment, imports and exports or capital
repatriation.
These are systemic risks, common to all busi-
nesses, for whom the ability to generate value de-
pends rst on the dynamics and size of the market
and only second, on their ability to compete and
consolidate/acquire the largest possible market
share.
The Group, in the persons of the Chairman of the
Board of Directors, the Chief Executive Ocer, and
the division and market managers, constantly
monitors market trends in order to promptly seize
opportunities to increase business and to assess
the likelihood of any risks (and their potential ef-
fects on the Group’s results).
The occurrence of adverse political and economic
events in the markets in which the De’ Longhi
Group operates (and particularly in emerging mar-
kets), could have adverse economic and nancial
consequences for it.
3 - Risks relating to strong competition in the
sectors in which the De’ Longhi Group op-
erates: the business in which the De’Long-
hi Group operates is highly competitive
and there is a tendency for the business to
be concentrated in a few important players
which puts strong pressure on margins.
The market is also characterized by any consum-
ers activities change in the markets in which the
Group operates, thus limiting the growth potential
as a consequence.
The Group competes with other major internation-
al industrial groups. The target markets are highly
competitive in terms of product quality, innova-
tion, price, energy saving, reliability, safety and
assistance.
The trade, furthermore, is gradually becoming
more and more concentrated in a few internation-
al players in some of the main markets, also due
to the exponential growth of e-commerce busi-
ness and its main players; in order to counteract
this concentration, the strength of the Group’s
brands, as well as the ability to propose a compel-
ling commercial offering, which is proving to be
very important.
Therefore the Group must adopt effective strate-
gies in order to combat this phenomenon.
If the Group were unable to adapt effectively to the
external context, this could have an adverse
impact on the Group’s business prospects, as well
as on its economic performance and/or nancial
position.
4 - Risks involved in relation to supply agree-
ments and strategic alliances: the Group also
operates through agreements with strategic
partners that foresee the development, pro-
duction and marketing of products, particular-
ly coee makers sold in international markets.
Consequently, the Group’s failure to maintain or
renew these agreements could impact economic
results and the nancial position. These agree-
ments, which are generating very positive results
in terms of growth and development as well as full
satisfaction both for De’ Longhi Group and for
strategic partners, are carefully managed and
monitored by top management.
5 - Risks relating to the De’Longhi Group’s
ability to achieve continuous product inno-
vation: the De’Longhi Group’s ability to gen-
erate value also depends on the ability of its
companies to oer technologically innova-
tive products that respond to market trends.
In this respect, the Group has proved in the past to
be a leader in technological innovation and in cre-
ating new in-vogue designer products, also thanks
to the importance it places on those working in
product development and design, which it intends
to maintain in the future. By way of conrmation,
market shares are increasing in the main markets
and product lines in which the Group operates.
In particular, if the Group were unable to develop
and continue to deliver innovative, competitive
products relative to its major competitors in terms
of price, quality and functionality, amongst others,
or if there were delays in the market launch of
models strategic to its business, the Group could
lose market share, with an adverse impact on its
business prospects, as well as on its economic
performance and/or its nancial position.
Report on operations
32De’ Longhi Group
6 - Risks relating to patents and trademarks.
Given the importance of developing products
that are innovative in both technology and
design (see point 5 above), the Group pursues
a policy of protecting its research and devel-
opment by registering patents for inventions,
utility models and designs in the various mar-
kets concerned; similar protection must be
assured for the Group’s trademarks.
The Group’s legal oces are responsible for the
legal protection of industrial property rights (pat-
ents for inventions, utility models, designs and
models as well as trademarks) and constantly
monitor and control the situation around the
world, using the services of specialist consultants
in the various countries concerned.
Such actions cannot absolutely guarantee that
the Group’s products will not be imitated and fur-
thermore, certain jurisdictions (such as China and
the United Arab Emirates) do not protect property
rights to the same extent as European law.
The Group’s policy is nonetheless based on incur-
ring the necessary costs to ensure that its proper-
ty rights have the greatest possible global protec-
tion in the various markets where it operates.
Moreover, there is no guarantee that protection of
the industrial property rights still in the registration
process (and, in particular, patents for inventions
and utility models) will be actually granted as led,
since the extent of protection may be reduced - even
signicantly - not only as a result of technical exami-
nation by the competent oce but also as a result of
opposition to the registration and licensing of the
rights that might be presented by third parties.
Lastly, although the Group does not believe that
its products infringe third-party property rights, it
is not possible to exclude that third parties might
successfully claim that such infringements exist,
including through legal proceedings.
7 - Exchange rate uctuation risks: e
Group does business in many foreign mar-
kets and is exposed to the risk of uctuations
in currencies.
The unfavourable trend as well as the aforemen-
tioned exposure to the currency risk, might lead to
unexpected loss in margins, especially in some
specic markets where the subsidiaries of the
Group operate.
For the purposes of protecting its income state-
ment and statement of nancial position from
such uctuations, the Group adopts a suitable
hedging policy and tools, free from speculative
connotations.
Hedging is carried out centrally by a special team
on the basis of information obtained from a de-
tailed reporting system, using instruments and
policies that comply with international accounting
standards. Hedging activities are dened when
the yearly budget is approved (or when the three-
year plan is approved). The purpose of hedging is
to protect - at individual company level - the future
revenues/costs contained in budgets and/or long-
term plans; furthermore also trade and nancial
receivables/payables are protected.
The level of coverage relative to revenues and
costs is determined including based on market
trends and cost/benet analyses.
The principal currencies to which the Group is ex-
posed are the US dollar (in which a part of the
costs relative to raw materials, parts and nished
products are denominated) the chinese renminbi
and the currencies of the main export markets
(the British pound, the US dollar, the Japanese
yen, the Australian dollar, the Ruble, etc.).
Signicant uctuations of the main currencies
might represent a risk of higher costs due to the
Group foreign companies nancial statements
consolidation (so-called consolidation risk).
Despite the Company’s effort to minimize the
abovementioned risk, sudden currency uctua-
tions could have an adverse impact on the Com-
pany’s results and business prospects.
8 - Risks relating to manufacturing, com-
modity prices and supplier relationships.
Production is carried out at facilities in Italy, Ro-
mania and China and, therefore, balanced across
three different geographic regions which reduces
the risk that operations will be interrupted.
The Group’s production costs are inuenced by
the prices of the most important raw materials
like steel, plastic and copper.
A signicant portion of the purchases are made in
China; the related risks are associated with pro-
duction by Chinese subsidiaries that serve as sup-
pliers to the Group, by the network of key third-par-
ty suppliers and by suppliers of parts to the
Group’s manufacturing subsidiaries (see point 2
for the strategic risks of manufacturing in China).
The Group manages these risks through:
a. a permanent evaluation system for the various
suppliers, used for decision-making purposes
and to identify the reliability of each recurrent
supplier in terms of quality and price of the
products supplied;
b. assessment of the risk of uctuation by the
Chinese currency against the US dollar, the
Group’s reference currency which is protected
by the Group’s hedging policies;
c. review of the nancial status of suppliers and
hence of the allocation of appropriate produc-
tion volumes to each supplier;
d. evaluation of the services provided by suppliers in
terms of logistics and timeliness of deliveries and
of the consequent decisions adopted each time;
e. a network of reliable and trustworthy key
suppliers;
f. inspections, prior to product shipment by sup-
pliers, intended to prevent any defects in the
quality of products acquired.
g. periodic assessment of the buy/make strate-
gies for the Group’s main products taking into
account any global market conditions that
could result in the need to change the strategy.
Lastly, the Group defends its reputation with sup-
pliers in their dealings with employees. Such cau-
tion is duly reected in contractual dealings and
furthermore, every supplier is given a copy of the
De’Longhi Ethical Code governing all its activities.
Nevertheless, it is conceivable that a breach of
contract by one or more suppliers to Group com-
panies could have adverse effects on the Group’s
operations, economic performance, assets and li-
abilities and nancial position.
The price of these raw materials and parts can
uctuate signicantly, depending on several fac-
tors, including the cyclical nature of the markets
concerned, supply conditions and other factors
beyond the Group’s control and dicult to predict.
The trend in the price of these raw materials and
parts is constantly monitored in order to take nec-
essary action to keep the Group competitive.
At the date of the present report, the Group does
not have any contracts to hedge the risk of uctua-
tions in commodity prices. There is also a possible
risk linked to the dependence on one supplier for a
few types of components of strategic production;
in order to address this risk the Group has begun
searching for secondary suppliers and to dene an
alternative strategy for purchasing/production.
Finally, there is a risk deriving from market situa-
tions characterized by anomalous trends in the
supply of raw materials and components, against
which the Group takes timely corrective actions in
Report on operations
33De’ Longhi Group
order to guarantee the supply chain and protect
margins.
9 - Risks relating to organization and human
resources management: e Group’s success
largely depends on the ability of its executive
directors and other members of manage-
ment to eectively manage the Group and
the individual areas of business and on the
professionalism of the human resources that
it has been able to attract and develop.
The principal risks relating to human resources
are linked to the Group’s ability to attract, develop,
motivate, retain and empower staff who have the
necessary talent, values, and specialist and/or
managerial skills to satisfy the Group’s changing
needs.
The loss of such individuals or other key employ-
ees without adequate replacement, or the failure
to attract and retain new qualied resources could
therefore adversely affect the Group’s business
prospects, as well as its economic performance
and/or nancial position.
In terms of being able to attract quality resources,
the Group’s principal companies not only have
specialist qualied professional human resources
teams, but they also plan actions to improve the
quality of working environment for its employees
and staff as well as the Group’s external image
(communication, contact with schools and univer-
sities, testimonials, internships, etc.), in some
cases using the services of specialist professional
rms with a proven track record.
In terms of motivating and developing personnel,
actions taken include the strengthening of
managerial, specialist, business and regulative
competencies, with initiatives that involve manag-
ers and staff from different areas of the business.
The salary review process also includes reward
systems for employees at various levels in the or-
ganization - from the plant worker through to top
management and key people - which are linked to
the achievement of short-term and/or medium/
long term targets.
As far as plant personnel is concerned, the Group
operates in China and Italy and in Romania.
Having a production facility in Eastern Europe has
made it possible to diversify the Group’s industrial
platform, so as to partly restore the balance in pro-
duction between the previously dominant China
and Europe. With regards to the Chinese platform,
certain risks exist associated with the high turno-
ver of the Chinese manufacturing workforce, the
diculty in nding Chinese production personnel
combined with higher payroll costs following the
Chinese government’s decision to raise the mini-
mum wage signicantly. These risks are managed
through the development of incentive systems to
foster staff retention (production bonuses and re-
tention bonuses spread over time for workers,
wage increases linked to length of service, and in-
centive schemes for management), policies for
recruiting and managing production staff, invest-
ment in training and developing more qualied in-
ternal resources, improvements in living and
working conditions within the various factories
(canteens, recreational and leisure activities, inter-
net access).
About Romanian facility, where the production
has signicantly increased during last years (cur-
rently there are two production plants operating in
two distinct areas also to maximize the availability
Report on operations
34De’ Longhi Group
of personnel), thanks also to the huge invest-
ments done, we can see a sharp rise in the work-
force demand and consequently in the labor
costs; in view of such complexity, the De’Longhi
Group has started to nd and maintain work re-
sources, in collaboration with external rms too.
Nevertheless, any problem in nding the neces-
sary workforce might lead to a slowdown in pro-
duction and have an adverse impact on the
Group’s business, economic performance, assets
and liabilities and nancial position.
The health crisis was also a critical factor for
human resources which determined the course of
2020/2021.
In the face of a health crisis (similar to what hap-
pened with the Covid-19 crisis, descibed above), in
all its oces and plants, the Group denes and
implements an important series of actions aimed
at ensuring the maximum security and safety of
its employees, while, at the same time, guarantee-
ing business continuity.
10 - Risks relating to product quality and
product liability: e Group’s products have
to meet dierent quality standards accord-
ing to the dierent jurisdictions in which
they are marketed.
The main risk is that products do not meet the
quality standards required by the different regula-
tions in such jurisdictions. This could justify the
return of such products, with increased costs of
production and an impact on the Group’s image
that could harm its reputation.
The activities of the De’ Longhi Group involve it
assuming typical producer liability for damage
caused by defective products: part of its sales
take place in jurisdictions (like the USA) where the
rules governing liability for damage caused by
products to people or things are particularly strict.
The Group therefore applies strict standards of
control to its products: it has a protocol for man-
aging quality risk that involves a series of activi-
ties and procedures in defence of product quality;
there is also a special team that controls quality
directly in manufacturing units and at supplier
locations.
In addition, the Group has product liability insur-
ance that is deemed adequate to cover these risks.
Nonetheless, it is conceivable that such insurance
coverage could be inadequate for manufacturing
defects in some of the Group’s products or in
other circumstances. The initiation of signicant
product liability claims, or the identication of de-
fects in the Group’s products, could harm the
Group, with adverse consequences for the man-
agement and development of its business.
11 - Risks relating to inventory levels and de-
livery punctuality: In view of the importance
of inventory and supply chain management
within the Group’s organization, certain
risks can be hypothesized: in fact, the Group
is exposed to a stock level risk, associated
with correctly predicting product quantities
and assortment for subsequent sale.
In particular, if the Group did not have an adequate
quantity of products it could run the risk of failing
to adequately and promptly meet customer
demand; if, however, the quantity of such products
exceeded orders, the Group might face the risk of
unsold stock or higher stock than expected with
subsequent related charges.
Another risk is the ecient management of the
supply chain that could affect the adequacy of
customer service.
The Group currently has a logistics centre that
ensures careful and timely planning and manage-
ment of every stage of the supply chain and imple-
mented a program aimed to the improvement to
the supply chain procedures.
As for the standard of customer service, the
Group’s procedures require that each customer’s
individual needs are taken into account.
If the Group is unable to predict and/or respond to
issues that could give rise to these risks, there
could be adverse consequences for the Group’s
business, economic performance, assets and lia-
bilities and nancial position.
12 - Risks relating to IT systems: e infor-
mation systems of a complex international
group are an important and delicate part of
the company’s processes.
The risks involved include events that could jeop-
ardise the ability to provide continuous service,
the safekeeping of data, obsolescence of tele-
communications and data processing
technologies.
The Group has taken the steps needed to limit the
above mentioned risks which include the standard
security devices used to protect systems and
hardware (from the use of back-up devices to out-
sourcing with specialized companies). Continu-
ous technological updates are assured by the
prevalent use of the SAP platform. While the
Group has taken all the steps needed to minimize
these risks, catastrophic events that could com-
promise the information systems cannot be
excluded.
13 - Credit risk: e Group is exposed to
credit risk on its trading activities.
The socio-political (or country) risks discussed
earlier (see point 2) could also have an impact on
credit risk; the same applies to the market risks in
relation to the ongoing concentration in the retail
business and to the strengthening of the e-com-
merce channel that may cause the crises of some
retailers (see point 3).
Trade credit risk is monitored using formal proce-
dures for selecting and assessing customers, for
dening credit limits, for monitoring expected re-
ceipts and for their recovery, and involves taking
out insurance policies with major insurers, and in
some cases requesting additional guarantees
from customers, principally in the form of
sureties.
However, these procedures might not be sucient
to prevent losses related to the credit risk, that
could affect the Group’s result.
14 - Risks arising from the seasonality of
sales: e De’Longhi Group’s sells, amongst
others, seasonal products as air conditioners
and portable radiators.
These products, which represent approximately
10% of the total revenues, are typically seasonal
with their sales concentrated in a limited period of
the year.
Seasonality of sales could adversely affect the
Group’s business prospects, as well as its eco-
nomic performance and/or nancial position.
Report on operations
35De’ Longhi Group
15 - Risks relating to changes in the regulato-
ry framework, particularly concerning envi-
ronmental protection: e Group is subject,
in the various jurisdictions in which it oper-
ates, to the national and international legal
requirements and technical standards appli-
cable to the type of products sold.
Particularly important are safety and energy con-
sumption standards for domestic electrical appli-
ances and regulations on consumer contracts,
defective products, minimum warranty periods,
recyclability and environmental compatibility.
Although De’ Longhi S.p.A. considers that the
Group’s organization and production comply with
current regulations and that the Group has
demonstrated over time its ability to anticipate
regulatory changes when designing new products,
the enactment of additional regulatory require-
ments applicable to the Group or its products or
changes to the legislation currently in force in the
sectors in which the Group operates, including at
an international level, could require it to adopt
stricter standards or affect its freedom of action
or strategic decisions in various areas of
business.
This could result in compliance costs for its pro-
duction facilities or products or even limit the
Group’s operations, with a consequently adverse
effect on its business, economic performance,
assets and liabilities and nancial position.
In particular, any changes in environmental regu-
latory standards or requirements currently in force
and the occurrence of unforeseen or exceptional
circumstances, could require the Group to incur
unanticipated costs. Such costs could therefore
have an adverse impact on the Group’s business,
economic performance, assets and liabilities and
nancial position.
16 - Risks relating to environmental dam-
age: e industrial production carried out by
the Group with its factories and equipment
could, in certain cases of serious faults or
breakdown in such equipment, cause dam-
age to third parties, accidents or environ-
mental damage.
Such accidents and damage could also occur in
view of the structural characteristics of certain
production facilities for which assessments and
work are in progress to make them comply with
current laws and regulations.
Although the Group has taken the necessary
safety precautions and complies with the applica-
ble regulations for preventing these types of risks,
if there was an accident or damage to the environ-
ment, the Group could be held liable, including
criminally, by the people harmed and by the com-
petent authorities, and its production activity
could be disrupted, with consequent adverse ef-
fects on the company’s and/or Group’s economic
performance, assets and liabilities and nancial
position.
Although Group companies have taken out insur-
ance policies against environmental damage, with
the related coverage considered reasonable in re-
lation to the estimated risk in question, it is none-
theless not possible to exclude the occurrence of
damage, in which the compensation payable ex-
ceeds the maximum coverage provided by such
policies.
17 - Liquidity and nancing risks - Interest
rate risk: e liquidity risk possibly faced by
the Group is the risk of not having the funds
needed to full payment obligations arising
from operating and investment activities
and from the maturity of nancial instru-
ments. e Group holds assets and liabilities
that are sensitive to interest rate changes and
that are necessary to manage its liquidity
and nancial needs.
It is the Group’s policy to maintain a suciently
large portfolio of counterparties of international
repute for the purposes of satisfying its nancing
and hedging needs.
The Group uses specic policies and procedures
for the purposes of monitoring and managing this
risk, including the centralized cash management
(nancial debt and cash management, the raising
of medium and long-term nance on capital mar-
kets and the obtaining of short-term credit lines
that allow wide room for manoeuvre when man-
aging working capital and cash ows).
Anyway, to this day, the Group has a widely posi-
tive net nancial position and medium-term bank
credit lines and short-term credit lines (typically
renewed on an annual basis), which are optionally
used to nance working capital and other operat-
ing needs.
The Group has also entered a revolving agreement
for the factoring of trade receivables without re-
course, thus granting an optimization of receipt
cash ows.
About the interest rate risk, at 31 December 2021
the Group’s net nancial position is positive and
nancial debt is mainly medium-long term, in
order to take advantage of the favourable market
conditions characterized by very low interest
rates. This risk is managed centrally by the same
team that manages currency risks. Nevertheless,
sudden uctuations in interest rates could have
an adverse impact on the Group’s business pros-
pects, as well as on its economic performance
and/or nancial position.
At the date of this report, the Group has three
hedging contracts to protect the medium/long
term loans from the interest rates uctuation risk.
18 - Compliance and corporate reporting risks:
A. Financial reporting: Risks associated with the
reliability of nancial reporting, particularly that
the information contained in the annual and in-
terim nancial reports might not be correct, war-
rant particular attention, especially for a listed
company.
In 2021, effective implementation of the system of
managing nancial reporting risks was monitored
on a continuous basis and periodically evaluated
under the guidance of the functions in charge.
For the purposes of ensuring reliable internal con-
trols over its nancial reporting, the Group has im-
plemented a system of administrative and ac-
counting procedures and operations that include:
• an accounting policies manual;
• accounting policy instructions and updates;
• other procedures for preparing the consolidat-
ed nancial statements and periodic nancial
reports.
The Group’s central “Corporate” functions are re-
sponsible for managing and communicating
these procedures to other Group companies. The
control bodies (internal and external) carry out the
related audit within their own authority. Possible
deciencies in maintaining adequate processes
and administrative-accounting and management
checks may result in errors in Group corporate
reporting.
Report on operations
36De’ Longhi Group
B. Risks relating to the administrative liability of
legal: In compliance with EU directives, Decree
231/2001 has introduced into Italian law special
rules applying to the liability of entities for cer-
tain offences, where “entities” mean limited lia-
bility business enterprises, partnerships or as-
sociations, including those without legal status.
Under this legislation and amendments and addi-
tions thereto, the Group’s main Italian companies
have adopted, in accordance with art. 6 of Decree
231/2001, the “Model of organization, manage-
ment and control” suitable for avoiding the occur-
rence of such liability at their own expense and the
related “Ethical code”, intended to apply not only to
the Group’s Italian companies but also, as far as
applicable, to its foreign subsidiaries, since
De’Longhi S.p.A. is also answerable, under art. 4
of Decree 231/2001, for offences committed
abroad.
Therefore, the company’s administrative liability
under Decree 231/2001 could exist when this is
effectively established as a result of an action
brought against one of the Group companies, in-
cluding the foreign subsidiaries; in such a case, it
is not possible to exclude, in addition to the result-
ing application of penalties, adverse consequenc-
es for the company’s and/or Group’s operations,
economic performance, assets and liabilities and
nancial position.
19 - Related parties: e Group has had and
continues to have transactions of a commer-
cial nature with related parties. Such trans-
actions carry conditions that are in line with
market ones.
The Company adopted a new set of procedures to
govern the Group’s transactions with related par-
ties, in compliance with the standards set by the
supervisory authorities in CONSOB Regulation
17221 dated 12 March 2010.
The procedures identify those related party trans-
actions subject to specic examination and ap-
proval rules, which change according to whether
such transactions are above or below dened
thresholds. The procedures place particular im-
portance on the role of the independent directors,
who must always issue a prior opinion on the pro-
posed transaction (if the transaction qualies as
material, this opinion is binding on the Board of
Directors); the independent directors must also be
involved in the preliminary examination of materi-
al transactions prior to their approval.
These procedures are considered to represent an
additional guarantee of the transparency of the
De’Longhi Group’s operations.
Report on operations
37De’ Longhi Group
A
R
Annual Remuneration Report
Reconciliation of net equity
and prot (loss) for the year
Please refer to the Annual Remuneration Report for all relevant information not contained in the present
report.
Below is a concise reconciliation between net
equity and prot of the parent company, De’Longhi
S.p.A., and the gures shown in the consolidated -
nancial statements:
Net equity
31.12.2021
Prot for 2021
Net equity
31.12.2020
Prot for 2020
De’Longhi S.p.A. nancial statements 605,379 107,099 567,417 88.710
Share of subsidiaries’ equity and results for period attributable to the Group,
after deducting carrying value of the investments
583,331 224,690 465,275 121,064
Allocation of goodwill arising on consolidation and related amortization and
reversal of goodwill recognized for statutory purposes
436,660 (5,634) 274,522 (1,948)
Elimination of intercompany prots (55,097) (14,406) (40,128) (8,227)
Other adjustments 322 - 268 534
Consolidated nancial statements 1,570,595 311,749 1,267,354 200,133
Minority 2,018 651 - -
Consolidated nancial statements-Group portion 1,568,577 311,098 1,267,354 200,133
Report on operations
38De’ Longhi Group
T
T
Treasury shares
Tax consolidation
At 31 December 2021 the Group, throught the parent company De’Longhi S.p.A., held 895,350 treasury
shares for a total of €14,534 thousand, purchased pursuant to the buyback program approved during the
Ordinary Shareholders’ Meeting held on 30 April 2019 and subsequently renewed on 22 April 2020 - after re-
voking the previous authorization granted by shareholders, for the unexecuted part - for a period of up to a
maximum of 18 months (namely through 22 October 2021).
The Parent Company De’Longhi S.p.A. and a few of the Italian subsidiaries exercised, jointly with the consol-
idator DeLonghi Industrial S.A., the option to adhere to group taxation, referred to as “Domestic Tax Consol-
idation”, as permitted under articles 117 - 129 of the Consolidated Income Tax Act (TUIR) as per Presidential
Decree n. 917 of 22 December 1986, and the Decree of the Ministry of Economy and Finance of 9 June
2004, for the three-year period 2019-2021.
Report on operations
39De’ Longhi Group
Related party transactions fall within the normal
course of business by Group companies.
Information on related party transactions is sum-
marized in Appendix 3 to the Explanatory notes.
R
Related party transactions
Report on operations
40De’ Longhi Group
A
Alternative performance indicators
In addition to the information required by IFRS, this
document presents other nancial measures
which provide further analysis of the Group’s per-
formance. These indicators must not be treated as
alternatives to those required by IFRS.
More in detail, the non-GAAP measures used
include:
• Net industrial margin and EBITDA: the Group
uses these measures as nancial targets in in-
ternal presentations (business plans) and in ex-
ternal presentations (to analysts and investors),
since they are a useful way of measuring operat-
ing performance by the Group and its individual
divisions besides EBIT.
Net industrial margin is calculated as total reve-
nues minus the cost of materials consumed and
of production-related services and payroll.
EBITDA is an intermediate measure that derives
from EBIT after adding back depreciation, amor-
tization of property, plant and equipment and in-
tangible assets. EBITDA is also presented net of
non-recurring items, which are reported sepa-
rately on the face of the income statement.
• Net working capital: this measure is the sum of
inventories, trade receivables, current tax assets
and other receivables, minus trade payables, tax
liabilities and other payables.
• Net operating working capital: this measure is
the sum of inventories and trade receivables,
minus trade payables.
• Net capital employed: this measure is the sum of
net working capital, intangible assets, property,
plant and equipment, equity investments, other
non-current receivables, and deferred tax assets,
minus deferred tax liabilities, employee sever-
ance indemnity and provisions for contingencies
and other charges.
• Net nancial position: this measure represents
nancial liabilities less cash and cash equiva-
lents and other nancial receivables; the position
with banks, net of non-banking items, is also re-
ported. The individual line items in the statement
of nancial position used to determine this
measure are analysed later in this report.
The gures contained in this report, including some
of the percentages, have been rounded relative to
their full euro amount. As a result, some of the
totals in the tables may differ from the sum of the
individual amounts presented.
Report on operations
41De’ Longhi Group
C
Consolidated Non-Financial Statement 2021
Introduction
Based on Legislative Decree n.254/2016, as
amended, in implementation of the Directive
95/2014 or “Barnier Directive”, large public interest
undertakings are required to publish a Non-Finan-
cial Statement (NFS) as of FY 2017. This statement
must provide information about a series of topics
which help to understand the company’s activities,
performance, results and impact. More in detail,
Legislative Decree 254 calls for non-nancial re-
porting on topics relating to ve areas: environmen-
tal protection, social responsibility, human resourc-
es, protection of human rights, as well as
anti-corruption and fraud issues.
A description of the main risks, generated and/or
undertaken, the entity’s policies, the relative perfor-
mance indicators, as well as the business and or-
ganizational models used must be provided for
each of these areas.
Paragraph 1073 of the Budget Law n.145/2018,
which took effect as of 31 December 2018, also
amended Legislative Decree 254 and in addition to
disclosing the main risks, entities are also required
to describing how the risks are managed.
In accordance with Decree 254, the Consolidated
Non-Financial Statement 2021 provides a descrip-
tion of the non-nancial qualitative/quantitative
performances of the De’Longhi Group relative to a
group of topics deemed material for the Group and
its stakeholders.
Information on the material topics is included in
this report: scenario and risks, policies and
objectives, organizational and business models, in-
dicators (for more information on the material
topics and how they are dened please refer to the
Note on Methodology).
Description of the business model
A brief description of the De’Longhi Group’s busi-
ness model is provided below with a view to a
better understanding of the information provided
on the material topics identied for each of the ve
areas included in the Decree.
De’Longhi S.p.A. (hereinafter also referred to as the
“Company” or “Group”), listed on the screen based
exchange (Mercato Telematico Azionario or MTA)
managed by Borsa Italiana, is the holding company
of a group of companies active in the manufacture
and distribution of coffee making products, food
preparation and cooking machines, air conditioners
and heaters, as well as home care products.
The Group operates in international markets
through 7 brands: De’Longhi, Kenwood, Braun,
Ariete, Nutribullet and Magic Bullet (the latter two
as a result of the acquisition in 2020 of the Ameri-
can company Capital Brands Holding Inc., active in
the personal blenders segment), as well as Eversys,
a Swiss brand acquired in 2021, active in the pro-
fessional coffee machine segment).
e impact of Covid-19 and management by
the Group
Similar to the prior year, 2021 was also character-
ized by very unstable global market conditions due
to the health and economic crises that impacted
the management of the Group’s operations.
In an environment of prolonged uncertainty, the
Group’s priorities were always twofold: the maxi-
mum protection and safety of all its people and the
continuity of its business. With regard to rst
aspect, the Group acted as it did in 2020, when the
experience managing the pandemic at the Chinese
plants allowed the De’Longhi Group to react quick-
ly to a global scenario without precedent in recent
history. In 2021, therefore, the use of PPE inside of-
ces and plants was still mandatory, as were tem-
perature checks before entering. Constant sanitiza-
tion of the workplace, social distancing, continuous
communication and surveillance also continued.
Workplace entrances were subject to the local laws
of the Countries in which the Group operates; in
Italy, for example, automated machines were in-
stalled at the entrances of the oces and plants
which guaranteed access only to those employees
with proof of anti-Covid 19 vaccinations or a nega-
tive Covid-19 test result. In 2021 remote working
continued where the job allowed and a policy gov-
erning the relative terms and methods is in the pro-
cess of being approved; different measures were
adopted for the production facilities which are de-
scribed in other sections of this Non-Financial
Statement.
These measures made it possible to guarantee the
Report on operations
42De’ Longhi Group
continuity of the Group’s operations which, overall,
did not experience signicant interruptions in its
operations due to the health crisis. What did prove
to be a challenge, above all in the last few months
of the year that just ended, was the lack of materi-
als and parts on a global level. The problems to
overcome relative to procurement and logistics
were, therefore, numerous and varied, but the
Group showed its usual resilience and once again,
despite the numerous obstacles, posted strong
growth. This ability to adapt and react to the di-
culties made it possible for the Group to continue
to meet the growing market demand, conrming its
leadership in the main markets and product seg-
ments. As was the case in 2020, in 2021 the
Group’s people received a special bonus at the end
of the year in recognition of their commitment and
dedication. Once again, the Group succeeded in re-
acting to another challenging year with agility,
demonstrating yet another time to possess a resil-
ient business model, capable of protecting the
health and safety of its people, as well as guaran-
teeing business continuity: testimony to all of this
is the limited number of cases recorded by the
Group’s personnel during the year, as well as the
manufacturing and sales results achieved
worldwide.
De’Longhi’s sustainability path
A number of years ago the De’Longhi Group em-
barked on a path characterized by a growing
awareness of the issues relating to sustainability.
This path, which started with the publication of the
rst Consolidated Non-Financial Report in 2017,
helped shape a management model for non-nan-
cial topics and dene its Sustainability goals for the
future. Consistent with the company strategy
adopted, the Group set the goal of dening con-
crete and coherent actions with a view to
mitigating and improving its impact and creating
long-term value for the company and its
stakeholders.
2021 marked a new chapter in the Sustainability
path, the pursuit of sustainable success. It is, in
fact, in light of this that the De’Longhi Group re-
thought its sustainable governance which now
comprises the following bodies:
• the Control, Risk, Corporate Governance and
Sustainability Committee, already operational in
2019, is a Board committee with proactive guid-
ance and advisory functions;
• the Sustainability Steering Committee, also al-
ready operational in 2019, comprised of different
department managers, responsible for dening
the sustainability strategy, as well as the relative
strategic plan;
• three Focus Groups - one for each of the Group’s
sustainability pillars (People, Products and Pro-
cesses). A Team Leader was selected who is re-
sponsible for the supervision/implementation of
projects included in the plan relative to her own
area of expertise;
• the Group’s Sustainability Director, appointed in
2021.
In 2021 the Group also analyzed the main ESG best
practices worldwide, ESG requisites and the re-
quests from clients and partners in order to dene
the areas of commitment that the Group intends to
focus on in the future. The results of these requests
and the work done are embodied in a Manifesto
(targeting all Group personnel), which cements the
renewed commitment to sustainability and aims to
create a transversal commitment for the entire in-
ternal community. Lastly, the Group identied, as
well as started, the single projects that the Group
intends to work on over the next few months while,
at the same time, launching a few strategic partner-
ships with Italy’s main universities.
e value chain
The De’Longhi Group’s work begins with research,
development and product design. These activities
are shared across the Group and are carried out by
the technical oces based on product line, togeth-
er with the Marketing and Design Divisions. R&D
works transversely (namely by product line) and
not only by brand. In the Hong Kong branch, there is
also a technical oce responsible for research pro-
jects developed in partnership with local providers.
After dening the solution to be launched on the
market, the work continues with the purchase of raw
materials and semi-nished goods; based on the
De’Longhi Group’s business model the production and
assembly of the nished product is done at the six
plants located in Italy, Switzerland, Romania and Cina
which covers 60% of sales. The Group also counts on
qualied partners, selected based on meticulous quali-
ty standards, referred to as “Original Equipment Manu-
facturers” (hereinafter also referred to as “OEM”).
Based on the Group’s local for global approach,
manufacture of products is plant specic.
Once production is completed, the machines man-
ufactured are tested: the main purpose of this ac-
tivity, managed at each plant by a dedicated team,
is to verify that the highest standards for product
safety have been applied by the Group. The quality
controls are done based on specic audits which
also include a specic process for verifying the
quality of the OEM products.
Once the quality control check has been passed,
the new products are delivered and stored at the
Group’s logistics hubs, strategically located world-
wide. The nished products are, then, distributed
through the Group’s commercial network by provid-
ers of logistics services.
Customer Care provides information and technical
assistance to all end consumers during both the
purchase and after sale phases.
Report on operations
43De’ Longhi Group
e Group’s stakeholders
The De’Longhi Group, with the direct involvement of company management, updated the mapping of its
stakeholders based on an analysis of the company structure, the value chain, businesses and those activi-
ties not strictly related to the latter, but which are an integral part of the Group’s reality.
This update led to the identication of 10 categories of stakeholders, grouped together by the type of stake-
holder, expectations, needs and existing relationships with the Group.
The Group interfaces with each group of stakeholders using different methods of engagement and listening
based on principles of transparency and fairness, as well as clear and complete information, shaped by the
Group’s Code of Ethics, in order to foster the ability to make informed decisions. The main topics related to
business activities that emerged through the different listening and communication channels used are re-
ported below:
Stakeholders Communication channel Main topics that emerged
Trade associations Annual meetings, periodic meetings Consumer rights, workers’ rights, environmental performance
Shareholders Corporate documents /Shareholders’ meetings/ Events Economic performance, business strategies
Local communities and
sponsorships
Periodic meetings Sponsorships, social impact, contribution to the community
Consumers
Satisfaction questionnaires, test panels, Contact Centers
(voice channels, e-mails, chat and social), advertising
campaigns, culinary events, Youtube “How to” channel
Customer assistance, product safety and quality, product
availability, feedback about ease of use and product satisfac-
tion, privacy
Employees
Employee Engagement Survey, annual performance reviews,
periodic meetings to share results, corporate intranet used to
access Group information, Group house organ, new HRMS
Organizational clarity, improved management of resources by
managers, appreciation of individual contributions to the
company, improvement in internal communications and
access to information
Suppliers Contracts, qualications and assessment, periodic meetings Way in which supplier relationships are managed
Future generations/
environment
- Reduce emissions and ght climate change
Investors, nancial analysts,
media
Interviews, meetings, road shows, press conferences
Economic performance, new products/ services/organization-
al models, specic social initiatives
Commercial partners Sales meetings, audit
Product safety and quality, exibility and adaptability to
requests
Universities/research
institutions/ laboratories
Dedicated meetings, partnerships on different research
projects
Recruiting and retaining talents, recruiting support
Report on operations
44De’ Longhi Group
The European Union Taxonomy, introduced with EU
Regulation 2020/852 (hereinafter the “Regulation ”)
is part of an EU strategy for achieving the European
Green targets and making Europe climate neutral
by 2050. The EU taxonomy provides a classica-
tion system based on which it is possible to dene
the economic activities that meet certain criteria of
eco-sustainability - and, therefore, can be consid-
ered “sustainable”. More in detail, based on Art. 3 of
the Regulation, an economic activity is considered
eco-sustainable or “aligned” if it:
• contributes substantially to one or more of the
environmental objectives set out in Article 9 of
the Regulation: climate change mitigation and
adaptation, the sustainable use and protection
of water and marine resources, the transition to
a circular economy, pollution prevention and
control, the protection and restoration of biodi-
versity and ecosystems;
• does no signicant harm (DNSH) to any of the
above environmental targets;
• guarantees the minimum safeguards for
human rights, including the fundamental rights
at work as per Art. 18 of the Regulation, recog-
nizing the importance of the rights and interna-
tional conventions (including of OECD, the United
Nations and the International Labor
Organization);
• complies with the technical criteria set by the
European Commission which, based on scientif-
ic evidence, species the minimum conditions
that need to be satised in order for the contribu-
tion made by an economic activity to one of the
environmental targets set, to be considered sub-
stantial. The regulation identies, for each
activity, specic technical criteria for each of the
environmental targets.
Based on the Regulation, in the rst year of report-
ing (2021) any undertaking subject to an obligation
to publish a Non-Financial Statement shall include
in this statement the proportion of turnover, invest-
ments (CapEx) and operating expenses (OpEx)
considered eligible and non-eligible activities as
dened under the European Taxonomy. With the
term “eligible” the Regulation is referring to an eco-
nomic activity that is “described in the delegated
acts […] independent of the fact that this economic
activity satises one or all of the technical criteria
established in the delegated acts”:
2
more informa-
tion relative to any additional elements will be pro-
vided as of the next year of reporting and will con-
tribute to determining, once the eligible activities
are determined, the ones aligned with the Taxono-
my and, therefore, formally classied as “eco-sus-
tainable”. To date, a list of the potentially eco-sus-
tainable activities and the technical criteria have
been dened for only two of the targets linked to
climate change. The list of the activities connected
to the remaining targets will be published in 2022.
The De’Longhi Group carried out an in-depth analy-
sis of its activities in order to identify which could
be classied as potentially capable of contributing
to the mitigation and/or adaptation of climate
change (the “eligible” activities). Based on this
analysis one of the revenue lines could be consid-
ered for the purposes of determining the KPI Turno-
ver, namely the one relative to the sale of portable
air conditioners, designed to guarantee the cooling
of a room while, at the same time, limiting energy
consumption. With regard to the Taxonomy speci-
cally, the decision was made to associate this prod-
uct with activity 3.5, related to the manufacture of
energy eciency equipment for buildings. The clas-
sication of the revenues stems from the denition
of the activity using one of the technical criteria
2 Art. 1, Delegated Act 2178/2021.
provided, namely item f), which establishes that
“appliances” may be considered “eligible” activities
and, therefore, recognizing the logical connection
between the air conditioners and appliances that
support the energy eciency of buildings. More
specically, even if the product is not actually made
at one of the Group’s production facilities, it is man-
ufactured by an “Original Equipment Manufacturer”
(OEM), based on the technical specications, in-
cluding relative to energy performance, dened by
De’Longhi.
The percentage of Turnover, CapEx and OpEx relat-
ed to the Group’s Taxonomy-eligible activities,
along with the percentage deemed Taxono-
my-non-eligible are shown below.
2021
Eligible
amount
2021
non-eligible
amount
Turnover 4.5% 95.5%
CapEx 1.0% 99.0%
OpEx 1.4% 98.6%
As required in the Annexes of Delegated Act
2178/2021 of the Regulation, the assumptions and
methodologies used to calculate the KPI (Turnover,
CapEx and OpEx) for the eligible activities is provid-
ed below. The methods of calculation, the compo-
sition in relation to the different activities provided
for in the EU Taxonomy and the relative measure-
ment process are provided for each of the KPI. In
accordance with the Regulation the revenue gener-
ated and the costs incurred for intercompany
transactions are not taken into account.
Administrative structures - Group accounting, rela-
tive to both headquarters and the individual pro-
duction plants - were involved in the KPI calcula-
tions. Based on the indications found in Annex 1 of
Delegated Act 2178/2021, they identied the ac-
counting items to be associated with the different
e European Taxonomy
KPI, beginning with the items found in the nancial
statements, both consolidated and statutory.
Furthermore, to date no investment plans which
satisfy the requirements set out in paragraph
1.1.2.2 which would allow for the plans to be includ-
ed in CapEx and OpEx have been draw up. For this
reason, the two KPI do not include any elements
attributable to a plan aimed at the expansion of eli-
gible and potentially Taxonomy-aligned economic
activities.
Turnover
Numerator
The numerator was calculated based on the
De’Longhi Group’s nancial reports and separating
the portion of revenues generated by the sale of
portable air conditioners net of discounts, rebates,
VAT and additional taxes.
Denominator
The denominator was determined based on the ac-
counting entries found in the De’ Longhi Group’s
consolidated nancial statements for FY 2021. The
items of the Group’s consolidated nancial state-
ments included in the calculation of the denomina-
tor refer specically to the sale of goods and servic-
es, net of discounts, VAT or any other direct tax, in
order to consider solely the revenues derived from
the Group’s core business: more specically, the
item included refers to “Net Sales” which already
calls for the separation of components attributable
to cash discounts and rebates.
Report on operations
45De’ Longhi Group
CapEx
Numerator
The components of the numerator were deter-
mined based on a study of the management re-
ports for each production plant and the parent
company in order to identify the 2021 additions re-
lating to capitalized expenses incurred relative to
eligible economic activities. More in detail, the tan-
gible assets used in production were mainly taken
into account.
The composition of the numerator and the details
for each production facility are provided below:
• China: the purchase of assets relating to activity
3.3) Manufacture of low carbon technologies for
transport, to activity 7.3) Installation, mainte-
nance and repair of energy eciency equipment
and activity 7.5) Installation, maintenance and
repair of instruments and devices for measuring,
regulation and controlling energy performance
of buildings were taken into account;
• Romania: the purchase of assets relating to ac-
tivity 7.6) Installation, maintenance and repair of
renewable energy technologies and the pur-
chase of assets and work in progress in 2021 re-
lating to activity 7.5) Installation, maintenance
and repair of instruments and devices for meas-
uring, regulation and controlling energy perfor-
mance of buildings were taken into account;
• Italy: the increases in IFRS leased assets relating
to activity 6.5) Transport by motorbikes, passen-
ger cars and light commercial vehicles and in-
vestments related to activity 7.4) Installation,
maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces
attached to buildings) were taken into account.
Denominator
The denominator was determined based on the in-
creases in value during 2021 of tangible, intangible
and right of use of assets (as per IFRS 16). The
amounts taken into consideration were used with-
out considering amortization, depreciation, impair-
ment and changes in fair value, in accordance with
the Regulation.
Furthermore, in 2021 a new production facility was
purchased in Switzerland which qualied as a busi-
ness combination for the Group. In accordance
with the law, the increase in tangible and intangible
assets stemming from the acquisition, excluding
goodwill, were also taken into consideration.
OpEx
Numerator
The components of the operating costs associated
with the purchase of eligible activities consisted in
the thorough analysis of the management reports
for each production facility.
More in detail, the costs recognized in the income
statement were examined in order to identify the
eligible items pursuant to the Regulation.
3
The fol-
lowing expenses for each production plant were
identied:
• China: costs relative to the maintenance related
to activity 7.3) Installation, maintenance and
repair of energy eciency equipment;
• Romania: costs relative to the maintenance and
repair related to activity 7.6) Installation, mainte-
nance and repair of renewable energy
technologies.
Denominator
The denominator was calculated based on consoli-
dated operating items: more specically, the line
items in the nancial statements relating to “Costs
for services”:
• Third party maintenance;
• Leasehold improvements;
• Technical costs.
3 See paragraph 1.1.3.2 of Annex 1 - Delegated Act
2178/2021.
Report on operations
46De’ Longhi Group
Scenario and risks
For information on the ethics and compliance risks,
as well as the relative risk management, please
refer to the section “Risk factors for the De’Longhi
Group”, specically paragraphs 18 (Compliance
and corporate reporting risks) and 19 (Related
parties).
For information on the management of the risks
connected to ethics and compliance, please also
refer to the table “The main risks associated with
non-nancial issues and management methods” in
the Note on Methodology.
Business and organizational model
Group compliance with current law and regulations
is overseen by the Legal and Internal Audit Divi-
sions, the Group’s Ocer Responsible for preparing
the Company’s Financial Reports, together with
Quality, (§Product quality and innovation).
More in detail, every year Internal Audit and the Fi-
nancial Reporting Ocer check and assess the
control system, and audit the accounting process-
es and procedures, as well as compliance with
Law 262 relating to nancial reporting processes
with a view to ensuring reliable, complete, accurate
and timely Group accounting and administrative
procedures consistent with Group administrative
and accounting policies. The audits are carried out
with a view to gradually covering all the companies
and, at the same time, focusing on the most rele-
vant ones (identied using economical criteria)
based on an audit plan coordinated with the
Group’s Financial Reporting Ocer and the Control,
Risk, Corporate Governance and Sustainability
Committee.
Internal Audit and the Group’s Ocer Responsible
for preparing the Company’s Financial Reports also
supervise the Enterprise Risk Management (ERM)
system, implemented and updated over the years
by the Group, which focuses on the assessment
and monitoring of company risks. As part of this
project, already in 2020 a number of activities were
carried out in order to integrate the ERM matrix
with the risks perceived in each area by local and
international management, and, more generally, the
country of operation. In 2020 work was also done
on the creation of a dynamic Risk Management
platform which will be used by the Group’s legal en-
tities. As planned, the roll-out phase of the platform
began at the beginning of 2021 and involved the
Group’s most relevant companies, as well as head-
quarters; the roll-out phase is expected to last for
two years and, therefore, all the remaining Group
companies will be involved. It also allowed to in-
clude in the ERM a larger number of risks connect-
ed to sustainability such as the one related to cli-
mate change. This platform is dynamic and allows
the personnel involved to identify the risks in a
timely and independent manner, under the strict
supervision of Internal Audit and the Group’s Ocer
Responsible for preparing the Company’s Financial
Reports, as well as make changes to the risk map
based on the user prole in order to guarantee the
utmost control and separation of roles. The new
risk platform was also integrated directly with the
SAP Success Factor for organizational purposes. A
specic e-learning module was also created so that
all individuals subject to assessments receive ade-
quate training.
Lastly, even though the Group does not have com-
mercial relationships with public administrations, in
order to increase compliance with internal regula-
tions and the laws in effect in the different coun-
tries of operation, as of 2015 the Group also carries
out other controls relating to abuse of authority and
corruption.
The Group also ensures that, in addition to total
transparency and compliance, models of conduct
have been dened and implemented with a view to
minimizing the risk of acts which are subject to
sanctions under the law. In order to standardize the
Governance policies across all the Group compa-
nies, in 2018 De’Longhi also adopted the “Corpo-
rate Governance Guidelines” which call for adhe-
sion to the Group’s Code of Ethics and dene a
system for the delegation of spending authority, the
implementation of these guidelines was entrusted
to the local heads of administration.
Lastly, the De’ Longhi Group’s Italian companies
also adopted an “Organizational, Management
and Control Model” pursuant to and in accordance
with Legislative Decree 231/2001, which calls for
the appointment of an independent Supervisory
Board to oversee the correct functioning and com-
pliance with the Model which was last updated in
2021.
4
The Group had already adopted an internal
management system which automatically moni-
tors the ow of information and the processes con-
trolled by the system used to prevent the crimes in-
dicated in Legislative Decree 231 in 2019.
In order to monitor Group transactions with related
parties and the relative risk, in accordance with
CONSOB Regulation n. 17221 of 12 March 2010,
the Parent Company has also dened a procedure
for the related party transactions subject to specif-
ic rules and approval based on the degree of
materiality.
Policies and objectives
The De’Longhi Group’s Code of Ethics, updated on
31 July 2018, denes the ethical standards that
must be adhered to by employees and in the course
of all the relationships between the company and
third parties. These standards must aspire to stand-
ards and values like legality, transparency, fairness,
integrity and professionalism, as well as protection
of privacy. Similar to 2020, in 2021 brief induction
sessions were held during the year with all new
hires who were introduced to the Code of Ethics and
the 231 Model. The biggest novelty, already consid-
ered in 2020, relates to the launch of an information
campaign targeting the Code of Ethics which was
sent to all Group employees worldwide during the
year who were to provide signed conrmation of
having received and read the Code.
As part of the Anti-Fraud Program dened based
on the guidelines of the Association of Certied
Fraud Examiners (ACFE), in 2021 the Group is fo-
cusing on the areas in need of improvement that
emerged in past years, with regard particularly to
Group merchandising promotors, and further con-
trols were set up on customers bonus and dis-
counts management, on changes in data on ERP
and on authorisation to payments to suppliers.
In 2021 use continued of the dedicated whistle-
blowing platform, completed in the previous year
and thanks to which each employee, supplier and
customer may le a report. In order to protect the
identity of the whistleblower, the source of all the
information provided remains anonymous; in order
to do this, a dominion outside the company sys-
tems was created which sends the encrypted infor-
mation directly to the Whistleblowing Committee, a
body comprising four Group members charged
with analyzing and carrying out any further investi-
gations of the reports received.
With regard to the implementation of this whistle-
blowing system, a notice was already sent in 2020
to all employees by the Chief Executive Ocer
when the platform went live on the Group’s corpo-
rate website.
5
All of the reports received during the
year were carefully reviewed and evaluated by the
Committee: no signicant reports have, however,
been received to date.
Lastly, the Legal Division continued the work begun
4 In 2021 the 231 Model of both De’ Longhi S.p.A. and
De’Longhi Appliances were updated.
Ethics and compliance
Report on operations
47De’ Longhi Group
in 2020 on the denition of a master policy for the
protection of data: the activities related to this
cyber security plan continued regularly in 2021, as
planned.
Key gures
No violations of the anti-corruption laws were re-
corded in the three-year reporting period
(2019-21).
Information relating to persons apprised of the
company policies and procedures, as well as the
employees who received anti-corruption training in
the three-year period 2019-2021, is shown below.
In 2021 the Board of Directors did not receive any
anti-corruption training or information about poli-
cies and procedures in this regard.
No legal complaints relating to anti-competitive,
anti-trust and monopolistic practices were led in
the three-year period 2019-21.
Likewise, during the three-year reporting period,
no economic or in-kind contributions were made
to political parties, their elected representatives or
persons seeking to hold political positions.
As in the two-year period 2019-20 in 2021, no
complaints relating to discrimination were led.
5 Use the following link to view De’Longhi’s Whistleblowing
page on the website: https://www.delonghigroup.com/it/
governance/whistleblowing
6 MEIA refers to the countries located in the Middle East,
India and Africa.
* The gures for Italy are included in Europe.
** The hours of training for new hires, which addresses busi-
ness ethics and anti-corruption, are taken into considera-
tion for APA. The statistics for the two-year period 2018-
2019 are not available for oces located in Canada.
Category
Europe* Americas & Asia-Pacic** MEIA
6
De’Longhi Group
2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021
Number of people with whom the company’s anti-corruption procedure and policies were shared
Managers 56 187 177 31 75 67 4 8 4 91 270 248
White collars 229 1,805 1,745 259 821 511 26 51 25 514 2,677 2,281
Blue collars - 4,034 4,481 1,768 3,819 3,820 - - - 1,768 7,853 8,301
Total employees 285 6,026 6,646 2,058 4,715 4,398 30 59 29 2,373 10,800 11,073
Commercial partners 1 - - 8 - - - - - 8 - -
Employees who received anti-corruption training
Managers 51 35 22 6 8 9 - - - 57 43 31
White collars 209 282 326 76 26 114 - - - 285 308 440
Blue collars - - - 5,280 7,560 9,355 - - - 5,280 7,560 9,355
Total employees 260 317 348 5,362 7,594 9,478 - - - 5,622 7,911 9,826
No instances of human rights violations within the
Group were recorded during the three-year period
(2019-21).
Lastly, consistent with full disclosure in tax mat-
ters, the Group operates in full transparency and in
accordance with local and international tax laws.
Report on operations
48De’ Longhi Group
Scenario and risks
In an international context, with highly diverse cul-
tures and traditions, the De’Longhi Groups uses
different methods to increase the sense of be-
longing and personal satisfaction, as well as pro-
tect health and the safety of the workplace.
The core values guiding the Group’s people in-
clude ambition, courage, passion, expertise, herit-
age, teamwork and mutual respect: all of these
principles contribute daily to encouraging employ-
ees to be loyal, to act fairly, with mutual trust, lev-
eraging on the importance of diversity, eliminating
any form of discrimination. The promotion and
professional growth of its people are also shaped
by these values, as is the need for a safe, healthy
workplace, which is key to retaining and attracting
resources and talent, as well as business continui-
ty. All of this was seen clearly in De’Longhi’s ex-
ceptional response to the COVID crisis that has
characterized the last two years when the meas-
ures implemented to protect the health of workers
contributed to ensuring the continuity of the
Group’s business and made it possible to avoid
signicant company shutdowns due to the spread
of the pandemic.
For more detailed information on the risks con-
nected to human resources management and risk
management, please refer to the section “Risk fac-
tors for the De’Longhi Group”, specically para-
graph 9 (Risks relating to human resources
management).
With regard to the measures used to prevent and
manage human resource risks please also refer to
the table “The main risks associated with non--
nancial issues and management methods” in the
Note on Methodology.
Business and organizational model
The Group management of human resources and
related activities is assigned to a corporate
Human Resources Management and Organiza-
tion Division, which is coordinated by the Chief
Corporate Services Ocer; local supervision is
carried out by HR Managers in both the main geo-
graphical areas and the Group’s more structured
branches. They have many duties which include,
mainly, all administrative aspects of employee re-
lationships, the management and development of
internal resources, talent acquisition, develop-
ment and retention. Local HR departments are
also responsible for internal communications,
labor union relations, development of important
initiatives tied to both employee engagement and
the organization of workplace safety.
The corporate HR structure was dened based on
the organizational changes made by the Group in
the last few years. It calls for the breakdown of
operational roles into three macro-clusters which
in addition to having specic expertise, focus on
the supervision of functional areas:
• Brand Headquarters and commercial organiza-
tion Europe
• Corporate Staff, Services and Organization of
Operations Europe
• Commercial organization Asia Pacic and Oper-
ations China
The Group Human Resources Management and
Organization Division is responsible for the super-
vision of the remaining commercial units.
The global Talent Acquisition and Employer
Branding division became fully operational in
2020 which allowed the Group to structure a more
integrated recruiting process. A number of initia-
tives have been developed in association with the
employer branding strategy focused on increasing
the recognition of the Group globally, including:
updating the People and Careers section of the
corporate website and the introduction of a new
global, corporate Linkedin page which substituted
the previous pages dedicated to single countries
and which in 2021 saw a signicant increase in
both followers and visitors. In addition, in order to
booster the popularity of the Linkedin page, em-
ployees will be engaged as brand ambassador.
Toward this end, projects were developed in part-
nership with Italy’s best universities, like Milano’s
Politecnico and Bocconi University: as part of a
strategic decision to strengthen the tie with the
academic world, structured partnerships were de-
veloped aiming not only to attract and recruit the
best talents, but also to increase the research and
training carried out in partnership with the two
universities.
As part of the partnership with Politecnico, the
Group participated in a number of events and
training courses connected to topics like innova-
tion, research and development. With some uni-
versities an international Graduate Program was
instituted which calls for the recruiting of new
graduates from universities across Italy in order to
offer them a 12-month working experience, half of
which will be spent at the headquarters in Treviso
and the other half in one of the Group’s interna-
tional branches. The goal at the end of this pro-
cess is to offer a position to a young talent within
the company, who may remain at headquarters,
the international branch where she already spent
six months or she could be assigned to one of the
other Countries in which the Group is present. The
program has already been a big success in terms
of talent attraction, conrmed by the large number
of curricula received from within Italy, as well as
foreign Countries.
The fourth edition of the engagement survey
“Your voice: to make a difference” survey, which
gauges the level of satisfaction and engagement
of the Group’s employees, was carried out in 2021.
The survey, which once again recorded a very high
level of participation, showed that there has been
a slight increase in the level of engagement with
respect to the prior edition. This is clearly a posi-
tive result, particularly when you consider the
survey was conducted during what were two very
intense years for everyone, both in terms of work
and psychologically. At the same time, the pan-
demic resulted in and accelerated a change in the
way we work which is shifting towards a hybrid
model that has positive repercussions for employ-
ee satisfaction: toward this end, De’ Longhi is
committed to drawing up a remote working policy
for all the Group’s organizations which clearly de-
nes how work will be done in the near future.
The last few years have been characterized by an
acceleration in the digitalization of the activities
related to human resources, which already in
2019, had resulted in the implementation of a vari-
able pay module within the SAP management
system SuccessFactors. The PULSE platform,
active already for several years, also allows Group
employees to create personalized learning plans
based on specic needs and access a catalogue
of on-line courses available through e-learning.
This mode of learning proved particularly vital
during the two years when in-person training was
impacted by numerous limitations: in 2021, in
fact, remote learning methods were once again
preferred. A number of channels and digital tools
(like Google Meet and Zoom platforms, as well as
digital whiteboards and instant surveys) were
used. A digital version of the program weMake,
which was supposed to be rolled out in 2020, was
also designed in order to move forward despite
the prolonged closure of oce spaces.
Digital Lab 2021 represents another digital em-
ployee training initiative carried out in 2021:
Human resources management
Report on operations
49De’ Longhi Group
consistent with company goals and challenges,
the scope of this project was to develop employ-
ees’ digital expertise and accompany the growth
of the Group’s e-commerce channel. The program
involved hundreds of people worldwide, which
were divided into two groups with customized
training paths built based on the roles and exper-
tise of the participants. Begun in June, the pro-
gram is still underway. The rst phase called for a
series of webinars, at the end of which the partici-
pants were asked to ll out a survey which re-
vealed a high degree of satisfaction.
The goal of Diversity and Inclusion, another initia-
tive promoted by the Group in 2021 is to promote
a systemic approach to guaranteeing compliance
with the principles of equal opportunity and the
elimination of discrimination. The project focuses
on two areas: one which aims to understand the
breakdown of the female presence within the or-
ganization, paying particular attention to any criti-
cal areas relating to gender pay gaps; the other,
more qualitative, which focuses on the main
stages of the women’s work experience in the
company, in order to identify the priorities and
needs of each phase.
The Human Resources Division also guides the
global performance appraisal process used to
promote personal and professional growth (up to
the middle management level), through the use of
a dedicated system aimed at facilitating an open
and constructive dialogue between the supervisor
and the subordinate. This process was redesigned
toward the end of 2020 tested during 2021 and
will become fully operative in 2022. The innova-
tion of the performance appraisal system involved
many parties, from the Human Resources team
through the Group’s managers and employees, in
order to gather feedback from a large group of
stakeholders.
With regard to the ongoing improvement of the
work-life balance, as well as the protection of the
health and safety of employees, the Human Re-
sources Division is assisted by people who have
specic roles and are charged with monitoring
compliance with health and safety regulations like,
for example, the head and staff of the Prevention,
Protection and Environment Department in Italy,
Switzerland, China and Romania. These individuals
are responsible mainly for assessing risks related
to the activities carried out by the Group employees
and implementing any improvements needed in-
cluding with a view to improving the ergonomics of
the work stations in the plants and oces.
The responsibilities and procedures relating to
health and safety are dened for the entire Group
based on an organizational model which is in line
with the international OHSAS 18001 “Occupation-
al Health and Safety Assessment Series”
standards.
Looking at comfort in the workplace, consistent
with past years, further work was done on com-
fort of the workstations, focused on ergonomics,
and further investments were made in automating
processes along the production lines which
reduce the employees’ use of force.
The security system was also audited in 2020.
Any incidents are managed locally by human re-
sources and the legal division which, in certain in-
stances, will also involve the Supervisory Board.
Focus Covid-19: the measures taken to pro-
tect the Group’s personnel
The protection of health and safety in the work-
place was crucial in 2021, too, and was more com-
plex given the need to also guarantee business
continuity.
With regard to the white collar workers, similar to
2020, the Group had to adapt to remote working
based on the infection rates in the different geog-
raphies, with a larger in-person presence in the of-
ces as the government restrictions were eased.
In accordance with the most recent government
measures, in order to ensure faster and more ac-
curate entrance checks, devices were installed
which allow for a systematic control of the author-
izations needed to enter, in accordance with do-
mestic regulations.
Already in 2020 all the Group’s production facili-
ties underwent a profound reorganization, with
the installation of plexiglass dividers to separate
workstations, the mandatory use of PPE (masks
and, where mandatory, gloves), the installation of
hand sanitizer dispensers, the institution (in
agreement with the labor unions) of double shifts
which ensured a greater staggering of presences
during the day and the reorganization of the cafe-
teria, all of which was coupled with the need to
guarantee operational continuity. In 2021 the
Group, once again, equipped itself with rapid swab
Covid tests in order to be ready to act quickly in
the event of any internal outbreaks. Testimony to
the effectiveness of the preventive measures im-
plemented by the Group, once again in 2021 there
were no signicant cases of contagion between
colleagues in the workplace.
The spread of the pandemic also resulted in in-
creased cleaning and sanitization activities (in-
cluding the installation of hydrogen peroxide
nebulizers in the main oces in Italy).
Policies and objectives
The Group’s Code of Ethics dedicates an entire
section to the management of human resources
which testies to the increased focus on people,
appreciated for both the professional and person-
al contribution they make every day to the achieve-
ment of the company’s goals. Particular attention
is paid to the recruitment of personnel which
should be done with a view to equal opportunities
for all through the professional and personal con-
tribution of its people as part of a relationship
based on integrity, fairness and mutual trust. The
Code of Ethics also condemns undocumented
working relationships, the use of child labor and
any and all forms of forced labor. The Group
avoids any and all forms of discrimination with re-
spect to its employees and staff members, offer-
ing equal opportunities and professional
advancement.
With regard specically to the health and safety of
workers, the Code of Ethics also requires that
each employee pay the utmost attention to carry-
ing out his/her duties, adhering strictly to all of the
safety and preventive measures in place, while
also complying with all the instructions and direc-
tives relating to a safe and healthy workplace. A
health and safety policy was formalized for the
Mignagola plant in Treviso, Italy and in Cluj and
Salonta, Romania after having adopted an operat-
ing system which complies with the international
standard, OHSAS 18001. At the plant in Sierre
(Switzerland) a ISO 450001:2018 compliant policy
is in place.
With a view to integrated management for all the
companies of topics relating to human resources
like for example, the compensation of the Board of
Directors and the Executives with Strategic Re-
sponsibilities, the Group dened a formalized
policy.
Furthermore, consistent with the process of
standardizing processes across the Group, in
2019 a new Group MBO policy was adopted,
which aims to further consolidate Group identity.
Report on operations
50De’ Longhi Group
Key gures
The Group had 10,352 employees at 31 December
2021, an increase of 10% compared to the prior
year. This change is explained by several factors,
including the acquisitions of Capital Brands and
Eversys. Women represent 52% of the De’Longhi
Group’s workforce. 88% of the employees have
permanent contracts, slightly lower than in the
prior year (92%).
Employees, by type of contract
Italy Europe Americas & Asia-Pacic MEIA De’Longhi Group
2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021
Number of employees by contract type
Permanent positions 1,577 1,651 1,708 3,084 4,284 4,624 2,551 2,621 2,710 61 51 58 7,273 8,607 9,100
women 611 646 676 1,765 2,617 2,776 1,209 1,250 1,273 25 22 23 3,612 4,535 4,748
men 966 1,005 1,032 1,319 1,667 1,848 1,342 1,371 1,437 36 29 35 3,661 4,072 4,352
Temporary positions 14 34 31 26 131 417 536 605 803 1 1 1 577 771 1,252
women 11 17 17 16 76 211 241 273 358 1 1 - 269 367 586
men 3 17 14 10 55 206 295 332 445 - - 1 308 404 666
Total 1,591 1,685 1,739 3,110 4,415 5,041 3,087 3,226 3,513 62 52 59 7,850 9,378 10,352
Number of employees by contract type
Full-time 1,472 1,567 1,637 3,028 4,302 4,784 3,074 3,214 3,484 61 51 58 7,635 9,134 9,963
women 506 549 594 1,715 2,601 2,789 1,438 1,512 1,613 25 22 23 3,686 4,684 5,019
men 966 1,018 1,043 1,313 1,701 1,995 1,636 1,702 1,871 36 29 35 3,949 4,450 4,944
Part-time 119 118 102 82 113 257 13 12 29 1 1 1 215 244 389
women 116 114 99 66 92 197 12 11 18 1 1 - 195 218 314
men 3 4 3 16 21 60 1 1 11 - - 1 20 26 75
Total 1,591 1,685 1,739 3,110 4,415 5,041 3,087 3,226 3,513 62 52 59 7,850 9,378 10,352
Number of employees by gender
Total women 622 663 693 1,781 2,693 2,987 1,450 1,523 1,631 26 23 23 3,879 4,902 5,334
Total men 969 1,022 1,046 1,329 1,722 2,054 1,637 1,703 1,882 36 29 36 3,971 4,476 5,018
During the year the Group availed itself of approximately 1,986 contract workers at the production plants.
Report on operations
51De’ Longhi Group
Breakdown of the workforce
Unit of
measure
De’Longhi
Group
2019
De’Longhi
Group
2020
De’Longhi
Group
2021
Managers
Men
< 30 years % - - -
>30 < 50 years % 1.4% 1.7% 2%
> 50 years % 1.1% 1.3% 1.2%
Total men % 3.1% 2.5% 3.2%
Women
< 30 years % - 0.1% -
>30 < 50 years % 0.5% 0.7% 0.7%
> 50 years % 0.1% 0.2% 0.1%
Total women % 0.9% 0.7% 0.9%
Total % 4.2% 3.2% 4.1%
White collars
Men
< 30 years % 2.1% 1.5% 2.3%
>30 < 50 years % 13.3% 10.8% 10.2%
> 50 years % 3.8% 3.4% 3.4%
Total men % 18.4% 19.2% 15.9%
Women
< 30 years % 2.6% 2.1% 2.4%
>30 < 50 years % 10.8% 9.1% 9.1%
> 50 years % 2.3% 2.1% 2.1%
Total women % 14.5% 15.6% 13.5%
Total % 32.9% 34.9% 29.4%
Blue collars
Men
< 30 years % 6.4% 7.4% 7.7%
>30 < 50 years % 15.8% 15.5% 15.5%
> 50 years % 6.0% 6.5% 6.2%
Total men % 29.5% 28.3% 29.4%
Women
< 30 years % 5.7% 7.3% 6.7%
>30 < 50 years % 21.9% 23.7% 22.5%
> 50 years % 5.3% 7.4% 7.9%
Total women % 33.6% 32.9% 37.1%
Total % 63.1% 61.2% 66.5%
In 2021, the De’Longhi Group’s BoD comprised 8 men and 4 women, of which around 92% over the age of 50.
Composition of the Parent Company’s
BoD
Unit of
measure
Italy
2019 2020 2021
Men
< 30 years n - - -
>30 < 50 years n 1 1 -
> 50 years n 5 7 8
Total men n 6 8 8
Women
< 30 years n - - -
>30 < 50 years n 1 1 1
> 50 years n 3 3 3
Total women n 4 4 4
Total n 10 12 12
The success of the De’Longhi Group’s products lies with its people. In order to foster their knowledge and
expertise, as well as ensure adequate training in terms of health and safety, in 2021 the De’Longhi Group
provided an average of 21.7 hours of training to each employee (- 8.5% compared to 2020) for a total of ap-
proximately 224,309 hours, about 1% higher than in the prior year.
Training
Unit of
measure
De’Longhi Group
2019 2020 2021
Average hours per employee H 20,6 23,7 21,7
Training
Unit of
measure
De’Longhi Group
2019 2020 2021
Training by job level
Average hours for managers H 19.9 15.2 14.3
Average hours for blue collars H 23.2 10.3 17.6
Average hours for white collars H 19.2 29.8 23.9
Training by gender
Average hours for women H 18.1 25.9 20.3
Average hours for men H 23.1 21.2 23.1
Report on operations
52De’ Longhi Group
With regard to health and safety, the Group recorded
a total of 82 injuries, of which 4 in transit occurring
during transports organised by the company, over a
total of more than 21 million hours worked in 2021.
These include 12 injuries sustained in transit, while
commuting using the employee’s own means.
The Group’s rate of injuries increased with a value
of 3.9 in 2021 compared to 2.5 in 2020. The 2021
gure is largely in line with 2019, while the differ-
ence with respect to 2020 is explained mainly by
factors specic to the year.
Injuries and rate of injury by geographic area
Italy Europe Americas & Asia-Pacic MEIA
2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021
Total hours worked h.000 2,657 2,527 2,887 5,218 6,256 8,285 10,255 11,125 9,935 116 109 119
Injuries n. 12 10 13 28 6 20 23 34 49 - - -
In transit using means organized by the Group n. - - - 15 4 4 2 - - - - -
Serious injuries n. - - - - - - - - - - - -
Fatal injuries n. - - - - - - - - - - - -
Occupational disease n. 2 4 1 1 - - - - 1 - - -
Accident rate - 4.5 4.0 4.5 5.4 1.0 2.4 2.2 3.1 4.9 - - -
Rate of serious accidents - - - - - - - - - - - - -
Rate of mortality - - - - - - - - - - - - -
Rate of occupational disease - 0.8 1.6 0.3 0.2 - - - - 0.1 - - -
Group injuries and accident rates
De’Longhi Group
2019 2020 2021
Total hours worked h.000 18,246 20,017 21,227
Accidents n. 63 50 82
In transit using means organized by the Group n. 17 4 4
Serious accidents n. - - -
Fatal accidents n. - - -
Occupational disease n. 3 4 2
Accident rate - 3.5 2.5 3.9
Rate of serious accidents - - - -
Rate of mortality - - - -
Rate of occupational disease - 0.2 0.2 0.1
Accidents and accident rates for contract workers at the production
facilities
De’Longhi Group
2019 2020 2021
Total hours worked h.000 1,377 2,644 5,343
Accidents n. 2 4 12
In transit using means organized by the Group n. - - 7
Serious accidents n. - - -
Fatal accidents n. - - -
Accident rate - 1.5 1.5 2.2
Rate of serious accidents - - - -
Rate of mortality - - - -
Report on operations
53De’ Longhi Group
Scenario and risks
In order to maintain consumer confidence and its
reputation in all of its markets, the De’ Longhi
Group works constantly to guarantee the highest
product quality. This is key to ensuring long-term
profitability and business continuity. As the
Group works in different areas worldwide, it must
continuously address a complex and varied regu-
latory environment, subject to constant change,
which requires that particular attention be paid to
compliance with the product quality standards
applied in the different jurisdictions. Toward this
end, based on the local for global approach
adopted by the De’Longhi Group, the products
are to be developed in accordance with the most
stringent standards applicable in the numerous
countries where they are distributed. Examples
include EU Regulation n. 1907/2007 or REACH
(Registration, Evaluation, Authorization and Re-
strictions of Chemicals) and the RoHS (Restric-
tions of Hazardous Substances) directive
2002/95/EC, both of which the Group’s compa-
nies comply with even though the scope of appli-
cation is strictly European.
The Group also assumes the manufacturers’ re-
sponsibilities for damages caused by defective
products. In these instances, the laws and regu-
lations can be particularly severe in some juris-
dictions, like the United States, UK and Australia.
A Product Safety & Liability team is in charge of
dealing with these aspects at Group level, inter-
acting with the technical functions and the
Group’s subsidiaries, operating both at product
risk prevention level and managing any signals
coming from the market or internal entities. For
example, in these countries, energy regulations
have recently been adapted: the introduction of
new energy efficiency standards that the porta-
ble air conditioners segment must comply with
has resulted in the adaptation of the entire range
sold by the Group in the markets to a minimum
standard of energy efficiency.
The manufacturer is also responsible for provid-
ing correct product information which may vary
from country to country. In the United States, for
example, the De’Longhi Group is subject to “Prop-
osition 65” based on which the presence of any
hazardous substances must be indicated on the
packaging and warning labels used.
For more information about the risks connected
to quality and product innovation, as well as risk
management, please refer to the section “Risk
factors for the De’Longhi Group”, specifically par-
agraphs 5 (Risks relating to the De’Longhi
Group’s ability to achieve continuous product in-
novation), 6 (Risks relating to patents and trade-
marks) and 10 (Risks relating to product quality
and product liability).
For more information on the measures used to
prevent and manage risks relating to product
quality and innovation, please refer to the table
“The main risks associated with non-financial
issues and management methods” in the Note
on Methodology.
Business and organizational model
The Quality Division, comprised of more than 500
people Groupwide, supervises compliance with
all the current laws and regulations relating to
product safety, as well as food contact safety. A
specific Regulatory Affairs team monitors the
regulatory and legislative scenario relative to
product and, in close collaboration with the tech-
nical areas, works to guarantee compliance on
an international level. One of the other duties of
this team is to define specific guidelines and
product control criteria that can be applied to all
the Group companies. Compliance with the
Product quality and innovation
corporate provisions defined by Quality is as-
sured locally by dedicated teams which work on
two levels: the first is focused on the product
quality control, relative to those manufactured by
the Group as well as those received from suppli-
ers of finished goods; the second level focuses
on the brands and is responsible for monitoring
quality during the development phase and when
any notifications are received from the market. In
both cases, in order to prevent any product
anomalies or malfunctions, as well as ensure the
best qualitative standards, supervision begins al-
ready in the planning phase.
Product quality is also monitored as part of the
ISO9001 certified organizational model in place
at the European plants and the Group’s Chinese
production facilities.
With regard to food safety, in the Mignagola and
Cluj plants an ISO22000 certified management
system for food safety was implemented which
meets specific requirements for hygienic and
sanitary conditions for food and the products
which it is in contact with. The 22000 standard is
based on the HACCP principles and the Codex
Alimentarius which makes it possible to identify
and manage the possible risks, prevent incidents
along the entire production chain and assess the
compliance of products with laws and regula-
tions. In the other Group plants, the organization-
al model is informed by, in addition to ISO22000,
the Good Hygienic Practices (GHP) and the ISO
1672-2 standard for food safety. The organiza-
tional model was also developed in accordance
with the ISO 22005 product traceability stand-
ards and requirements in order to provide, for
each component and finished product, informa-
tion relating to the supplier and the client recipi-
ent of the product.
All the Group’s products are also evaluated, in a
pre-production phase, by third parties, to guaran-
tee compliance with the applicable regulations,
verifying that the current standards relative to
security are aligned. A further task of the Quality
function, carried out through specific audits (see
Report on operations
54De’ Longhi Group
paragraph “Supply chain management”), is to
oversee the quality of the productions of its
suppliers.
With regard to product information, an important
aspect consists of the cooperation between the
technical function and the Marketing Department
for the creation and continuous monitoring of
user manuals and labels: it is to all the extent es-
sential to ensure their consistency with the regu-
latory frameworks of the countries where the fin-
ished product is distributed. The topic of product
information and labeling is, in fact, very impor-
tant for the Group which, in order to fulfill legal
obligations, must comply with specific provi-
sions such as, for example, providing the country
of origin and the presence of any refrigerants in
the appliances distributed by the Group. Instruc-
tions relating as to how to safely use and dispose
of the product at the end of its life cycle must
also be provided in the product manuals.
The Operations and Technology Division over-
sees innovation and product design and is
charged with developing well designed products
that are easy to use and highly multifunctional.
The designs should combine several elements in
order to provide ergonomic, silent, reliable,
energy efficient products, made out of durable
materials and based on technologies that en-
courage healthy eating habits. Moreover, the
Group has always invested in the research and
development of long-lasting products, made out
of parts that are easy to disassemble and clean.
Toward this end, in 2020 the Kenwood brand
launched a two-year project aimed at drastically
reducing the number and complexity of the parts
of its kitchen machines which will improve prod-
uct maintenance and facilitate repair.
As for innovation, the recent market trends have
driven a noticeable increase in product
digitalization which led the Group to invest in in-
novative solutions (see the section “Connected
products”).
More in general, the guidelines for new product
development are shared by the entire De’Longhi
Group based on specific NPD (New Project De-
velopment) procedures monitored by Marketing
and Design, as well as part of the technical offic-
es, comprised of around 450 people located in
offices in Italy, Germany, the UK and at the Dong-
guan plant in China. These offices, together with
the Quality Division’s Regulatory team, develop
solutions which comply with applicable laws.
The Group’s local for global approach calls for
the development of products which comply with
the most stringent standards applicable in the
more than one hundred countries in which the
Group’s products are distributed.
The development of innovative products is also
promoted and supported by the commercial
partnerships developed by the Operations and
Technology Division and some commercial part-
ners based on which the De’Longhi Group de-
signs and manufactures a collection of coffee
products, as well as with a few Italian and foreign
universities which focus on product design and
improving the user experience. Toward this end
in 2020 the Group held an innovation manage-
ment conference at LIUC - Cattaneo University
and was awarded a prize by the University of
Padua in recognition of its open innovation based
partnerships.
The Group protects the design of new products
and solutions through specific patents managed
centrally by headquarters. There is an office in
the Hong Kong branch which is in charge of re-
search projects developed in partnership with
local suppliers.
Policies and objectives
One of the Group’s founding values is, most cer-
tainly, the constant attention paid to making ex-
cellent products, conceived and continually inno-
vated through research and development
focused, among other things, on the safety and
wellbeing of the consumer. In the Code of Ethics,
approved by the BoD in 2018, the Group commits
to guaranteeing that consumers and clients will
be provided with high quality. More in detail,
product design and production must take into
account product efficiency and durability, as well
as the maximum environmental compatibility.
The Group wants to be a reliable and safe partner
for its clients and intends to develop its markets
based on this principle, providing top-tier quality
products and services.
The Group adopted a group-wide Quality Policy
which reinforces the commitment to the develop-
ment and distribution of safe products which
comply with all laws and regulations and meet
the needs of end consumers.
Key gures
The First Time Quality (FTQ) indicator helps to
monitor qualitative process efficiency. It was
conceived to verify the type of defects, functional
or esthetic, linked to the single products and ex-
presses the number of perfect products as a per-
centage of total production.
In the three-year period 2019-2021, the overall
FTQ was stable confirming the Group’s excellent
performance. A second indicator, used to moni-
tor product quality is The Service Call Rate (SCR)
which measures the machines repaired in the
first two years under warranty monitoring the
percentage of products repaired during the first
warranty year. The overall SCR in 2021 and the
constant improvement over the three-year period
confirm the De’Longhi Group’s commitment to
designing and producing high quality products.
In the three-year reporting period, there were two
instances of non-compliance linked to product
safety. In 2021, some comfort products, manu-
factured by a third party supplier and distributed
by the Group in the USA, Canada and Mexico,
were taken off the market due to possible exces-
sive overheating. The recall was carried out and
managed directly by the third-party supplier
based on an agreement with the local authori-
ties. In 2019 there was an instance of noncompli-
ance with the European Directive 2014/35/EU,
the “Low Tension Directive” that resulted in an
administrative sanction that was, however, not
significant.
There were no instances of non-compliance rela-
tive to product information and labeling while in
2020 there was one instance in Italy relating to
the label of an Ariete brand product that did not
have the name and address of the manufacturer.
There were two instances of noncompliance in
2019, both related to the European Directive re-
ferred to above.
Finally, as in prior years, the Group continued
with its investments plans and research and de-
velopment in order to enhance its capacity for in-
novation (please refer to the section “Research
and development - quality control” for more
information).
A few of the product designs which exemplify
De’Longhi Group innovation are described below:
Report on operations
55De’ Longhi Group
Connected products
As in prior years, in 2021 the Group continued to
invest in the development of solutions which
guarantee connectivity and ease-of-use through
digital technologies like Wi-Fi, Bluetooth and
touch screens. These technologies make it in-
creasingly possible to personalize the products
offered to the user, as well as monitor and pre-
vent malfunctions and, consequently, increase
the efficiency and speed of customer care. In
2021, for example a project to develop a series of
air conditioners for the European market which,
in addition to being connected to specifics apps,
incorporate innovative technologies capable of
locating the user (a geofencing system) and opti-
mize consumption. These will be added to the
line of portable air conditioners which can be
controlled remotely thank to the Bluetooth tech-
nology “Cooling Surround Technology” launched
in 2020 and expanded to include other models of
air conditioners in 2021. Looking at the coffee
segment, in 2020 distribution of “Primadonna
Soul” began. This is the Group’s first fully auto-
matic machine that can be connected via Wi-Fi
and managed through an application download-
ed on the user’s smartphone.
Lastly, beginning already in 2018, several food
preparation and comfort product lines featuring
innovative user interfaces and connectivity were
offered: these included a series of Apple Homekit
products for heaters distributed in Japan, as well
as a dehumidifier which can be connected via
Wi-Fi that is sold in Europe.
Durable and detachable products
During the development phase, coffee machines
are subject to numerous tests relating to the du-
rability of components and the finished products.
More in detail, thousands of drinks are made
under standard conditions in order to verify prod-
uct reliability and durability. There are a few
models like, for example, la Maestosa and La
Specialista, for which different initiatives have
been underway focused on further increasing du-
rability which, already today, is optimal. In order
to accommodate the needs for machines that
are easier to repair and require less time to sub-
stitute parts, in 2020 a project had already been
started to modify the frame of the La Specialista
coffee machines; generally, the ability to repair all
of the Nespresso brand machines is already
monitored during the design phase. Similar pro-
jects have been ongoing for some time for the
Kenwood brand kitchen machines with a number
of assessment activities also in 2021: with a view
to standardizing internal parts and reducing the
number of parts, the goal is to guarantee simpler
and more effective repairs, as well as more sus-
tainable and functional solutions. In the wake of
the projects begun in 2020, in 2021 work was
done to simplify a few mechanical elements and
increase the interchangeability of parts across
different models.
In addition to quality and durability, it is clear that
one of the De’Longhi Group’s objectives is to
make products that are easier to repair, by ren-
dering them not only simple to take apart, but
also by increasing the ability to interchange parts
across products from the same family.
As already noted in previous years, the fully auto-
matic coffee machines are equipped with patent-
ed systems which facilitate washing with water,
without having to use detergents and lubricants,
while the milk system is cleaned using steam
and hot water at the end of each use so that any
remaining milk can be stored in the refrigerator
and used again.
Energy ecient products with low GHG emis-
sions
The research and development of increasingly
energy efficient products is not only a must for
the De’Longhi Group, it is also a topic that is
changing constantly and widely discussed by
regulators.
With regard to coffee, in 2021, as was the case in
2020, almost all fully automatic De’Longhi coffee
machines are at least class A,
7
as are all the Lat-
tissima and manual machines with electronic
controls like the Dedica machine. The biggest
novelty in 2021 is the fact that Lattissima One
Evo, launched in 2020 on the main markets and
expended to include other geographies in 2021,
received an A+ rating. Most of the Nespresso
platform machines were also rated A+ thanks,
mainly, to a decrease in the use of aluminum
which made it possible to make a lighter, more
energy efficient boiler. In addition to the Nespres-
so machines and the Lattissima One Evo, the
weight of the boiler was also reduced in semi-au-
tomatic machines, like La Specialista Arte. The
reduced weight of the thermoblock made it pos-
sible to improve energy consumption noticeably.
Also, as of 2018 all the fully automatic machines
are also available in “Ecomode” which makes it
possible to save energy during the warm-up
phase; this function, along with the stand-by
functions available for all product families, guar-
antee energy consumption that is lower than reg-
ulatory limits.
Moreover, all the manual coffee machines, which
typically consume more energy than the fully au-
tomatic machines, are equipped with a patented
De’Longhi system that makes it possible to cut
off the power supply or turn off automatically
after a period of inactivity, resulting in energy
savings: in 2021 more work was done on these
functions, which today allow the machine to turn
off automatically after only a few minutes of not
being used.
Lastly, with regard to comfort, already in 2020,
the migration of the whole range of European
portable air conditioners to refrigerant propane
gas was completed and stabilized. This refriger-
ant has significant environmental advantages as
it is a natural gas which has a lower impact on
global warming (Global Warming Potential -
GWP). In the US market, where the use of this
gas is illegal, in 2021 the Group completed the
migration of all the air conditioners to refrigerant
synthetic R32 gas, which has a lower GWP
impact compared to the gases used previously;
while it is not as efficient as propane, it repre-
sents the best possible solution allowed under
US law. This activity was the continuation of
what was done already beginning in 2018 to sub-
stitute the refrigerant gas, which has high global
warming potential, used in the refrigerant circuits
of products for the European market with pro-
pane gas in accordance with EU regulation n.
517/2014 of the European Parliament and of the
Council of 16 April 2014 on fluorinated green-
house gases.
7 Beginning in 2009, the FEA (Swiss Association of the do-
mestic appliances industry) in agreement with the Swiss
authorities, introduced the energy label for espresso ma-
chines, which became mandatory in 2014 for all machines
sold in the Swiss market. In this context, the De’Longhi
Group has decided to extend the certication in accord-
ance with the standard EN 60661/2014 “Methods for
measuring the performance of domestic coffee machines”
to all coffee machines, regardless of the distribution
market. The energy label proposed in the Swiss agreement
classies espresso machines on the basis of their energy
eciency on a scale that goes from class D to A +++.
Report on operations
56De’ Longhi Group
Healthy lifestyle products
The De’Longhi Group uses its products to pro-
mote healthy lifestyles, consistent with recent
health trends and increasingly healthy eating
habits. This has resulted in, products capable of
maintaining the principle nutritional elements of
food unchanged.
All the De’Longhi brand coffee machines, fully au-
tomatic and manual, meet these needs perfectly;
thanks to the electronically controlled boiler tem-
perature these machines maintain the brewing
temperature within the limits recommended in
international sector standards. For many years,
the Group has also started a partnership with the
University of Padua which resulted in the devel-
opment of different innovations. Among these,
two projects have assumed particular relevance
over time: a coffee machine that can make drinks
using vegetable milk in order to meet consumers’
new food needs and a structured “vibro-chemi-
cal” system which allows for an even flow of
ground coffee which provides optimal flavor and
aroma.
The desire to respond to the consumers’ increas-
ing demand for healthy foods also drove the de-
velopment of Kenwood brand products: thanks
to the Scrolling Technology, the Pure Juice line is
able to reduce the overheating and oxidation of
ingredients making it possible to extract juice
from fruits and vegetables without compromis-
ing the nutritional properties. Looking at healthy
eating, a number of initiatives were already in
place at the beginning of the three-year reporting
period: these include the Multifry range of fryers
which, thanks to the use of hot air to cook food,
guarantees a reduction in the use of vegetable
oils (and, therefore, fat) and the environmental
impact related to the disposal of the cooking oils
used.
In 2021 the Braun and Kenwood teams also
worked to promote an online advertising cam-
paign aiming to raise the awareness of consum-
ers in relation to food waste and help them adopt
sustainable modes of behavior.
Report on operations
57De’ Longhi Group
Scenario and risks
The De’Longhi Group’s brand reputation is based
on the loyalty of end consumers and the essen-
tial need to distribute quality products. Both of
these aspects are managed and addressed in
different ways which go from clear and honest
communication before the purchase to post-
sales assistance capable of understanding and
quickly responding to the end consumers’ needs,
particularly with regard to the protection of the
customer’s information.
There are numerous aspects related to the end
consumers’ needs that fall within the provisions
of the law on consumer protection: among these
there are, among other things, the minimum war-
ranty period of the products, the management of
the same in case of defects and their environ-
mental compatibility in terms of the recyclability
of the materials that compose them. The protec-
tion of data and consumer privacy remains an
aspect of primary importance for the Group: the
greatest risks in this regard are represented by
elements such as the obsolescence of telecom-
munications technologies and information
processing.
For more information about risk management
and the risks related to consumer relations,
please refer to the table “The main risks associat-
ed with non-financial issues and management
methods” in the Note on Methodology.
Business and organization model
The De’Longhi Group’s external communication
is managed by the corporate Marketing and
Communication Division and the local marketing
offices of each brand. There is also a Customer
Care division which is responsible for supporting
the end consumer in the pre and post-sale
phases. With a view to ensuring continous and
integrated customer support throughout the cus-
tomer journey, valid standards have been defined
for the whole group, contact centers and techini-
cal support centers which represent an essential
tool for consumer relations.
The contact center network, managed in out-
sourcing and in place at almost all of the Group’s
branches, manages the requests for assistance
received from the end consumers, provides prod-
uct information and continuous support for an
optimal customer journey. As Covid-19 spread,
the contact centers were subject to growing
pressure which, in 2020, was tied mainly to the
closing of offices and reorganization and which,
in 2021, was attributable mainly to the higher
volume of direct contacts with the clients, both
via phone calls and requests for support sent via
web. The higher volumes are, in part, attributable
to a gradual shift in the sale of products: in 2021,
in fact, there was an acceleration in online sales
which implies a direct relationship with the con-
sumer that is no longer filtered by the traditional
retail experience. The increase in the requests
and, consequently, the need to recruit new opera-
tors did not, however, compromise the high quali-
ty service provided and resulted in work being
done on the development of quick replies. The
ability to react to the brusque increase in re-
quests allowed for greater improvement in the
service provided compared to 2020.
In 2021 use of the CRM management system (an
extension of SAP and renewed in 2020) which
allows for integrated and efficient management
of consumer information was used again. This
system covers consumers representing around
80% of the Group’s sales, generates feedback
and analyzes the information gathered. This
system was recently renewed; in 2020 an impor-
tant project was completed based on which
today the CRM can provide an integrated pre-
and post-sales service and a new cloud custom-
er communication system.
During the year, VoC management (Voice of Cus-
tomer) tools were also used through Wonderflow,
a software which collects structured feedback
from the websites of the main retailers selling
the Group’s products. Implemented in 2020 and
fine-tuned in 2021, thanks to this software it is
possible to combine the reviews coming from
more than 60 retail channels and 14 countries
worldwide, covering three continents (Europe,
Asia Pacific and America). This technology
makes it possible to combine these reviews with
the customers’ direct feedback collected using
the internal CRM. The use of this tool, based on
Big Data Analysis, allowed for further improve-
ment in the Group’s listening strength, making
“actionable feedback” on hundreds of thousands
of communications relative to the Group’s differ-
ent product categories available.
An important new development in 2021 relating
to customer care was the pilot project launched
with a UK software provider: the goal of this pro-
gram was to adopt an AI service (AI - Artificial In-
telligence powered web service system) which
makes it possible to improve the relationship
with the consumer and the quality of the support
provided. A significant number of the requests
was transferred to directly to AI.
2021 was a year of significant pressure also for
technical assistance services, comprised of ap-
proximately 1,800 service centers worldwide (of
which 300 in Italy), the majority of which in out-
sourcing. If, in 2020, it was the pandemic to
cause a slowdown in operations due to the tem-
porary closing of a few centers, in 2021 the main
challenge was finding materials. The system,
however, showed great resilience: even though
the reduced access to spare parts caused a
slight increase in the average repair times, it was
possible to maintain high quality service and
contained costs thanks also to the investments
the Group makes every year in repair facilities. In
2021, for example, an investment in expanding
the repair center in Germany, already the Group’s
biggest market which never closed despite the
global scenario of the last two years, was ap-
proved. Lastly, to further ensure the effective-
ness and quality of repair services, a new control
platform for the reporting of technical assistance
centers was launched both in Italy and abroad.
In addition to sharing joint guidelines and stand-
ards, Customer Care constantly monitors the
quality of the support service teams and contact
centers through inspections, as well as the use
of specific indicators, and periodically provides
training. If in 2020 these inspections were inter-
rupted during the months of the lockdown in
Italy, in 2021 the inspections resumed regularly
where allowed by local laws and company poli-
cies. The training of employees and external
partners specialized in technical assistance is
still being carried out using a hybrid method
thanks to the synergies between e-learning and
online training; in order to render training more
effective and user friendly, the platform used was
recently updated and modified.
Lastly, the information provided by consumers is
stored on Google Cloud Platform webservers.
The security of this platform is guaranteed by
Google’s modern service technologies, as well as
Google’s commitment to compliance with data
protection laws and the main international stand-
ards for information security (ISO 27001) and
cloud services (ISO 27017 and ISO 27018).
Consumer relations
Report on operations
58De’ Longhi Group
Policies and objectives
In order to improve the longevity of the products
and the customer experience, the De’ Longhi
Group works constantly to improve the assis-
tance it provides to its clients, in line with the
consumer codes defined inside the Countries in
which it operates.
While a specific policy has yet to be formalized,
the Group has given itself a series of targets
which aim to improve its analysis and under-
standing of the consumers’ most common re-
quests, paying particular attention to product in-
formation, as well as after sales assistance. In
addition to big data analysis and the business in-
telligence already carried out in prior years, in
2021 analysis of the customer feedback contin-
ued: the use of the internal data driven platform
makes it possible to carry out intuitive text ana-
lytics, text mining, sentiment analysis and rating
breakdown, analyzing the online review channels
of the main European and global retailers,
gathering information on both the Group’s and
the competitors’ products. In this way, the Group
can investigate different competitive aspects,
analyzing the online channels of the main Euro-
pean retailers and gather information about
Group products and the competition.
The Code of Ethics has an important role in inter-
nal and external communications, as it is particu-
larly focused on consumers and clients, for lis-
tening to their needs is considered to be a driving
force behind the ability to provide better solu-
tions which both anticipate or even influence
new market trends. The Group, therefore, strives
to guarantee that relationships with consumers
and clients are handled professionally, in a timely
manner, carefully, openly, respectfully, collabora-
tively and with a passion that ensures the highest
quality, as well as the best level of service
possible.
As for external communications, based on the
Code of Ethics the disclosures made both inside
and outside the Group must comply with the law,
regulations, and professional best practices and
be clear, transparent, timely and accurate. Lastly,
consistent with the principle of confidentiality
found in its Code of Ethics, the Group is commit-
ted to protecting the confidentiality of the infor-
mation and data in its possession, in compliance
with current laws and regulations relating to cus-
tomers and consumers. No specific policies have
yet to be formalized for either of these areas.
Key gures
With regard to the processing and protection of
data, in 2021 there was one data breach. More in
detail, a notice of non-compliance was received
from the Italian authorities relative to the resale
of the PEC service for the De’Longhi Group com-
panies which affected the data of 5 people.
Toward this end, the authorities were informed
immediately and the Group is still waiting to hear
about any developments. In 2020 there was a
similar instance, while in 2019, there was one in-
stance of noncompliance involving a Group com-
pany in Germany due to a potential data breach.
The authorities were informed of the issue imme-
diately, in accordance with the law, and the issue
was resolved.
Looking at the service provided to end consum-
ers, as mentioned above the average service
time in 2021 was slightly higher due to the diffi-
culties encountered in finding spare parts on the
market, as well as the strong increase in sales
volumes. The quality of the repairs made by sup-
port services was monitored based on the First
Time Fix (FTF) which measures the number of
repaired products that did not need further re-
pairs in the six months following completion of
the initial repair as a percentage of total product
repairs. In 2021 the FTF was largely unchanged
with respect to previous years, keeping a costant
value in the three-year reporting period coming in
at around 95%; these results certify that almost
all the products have received an adequate
repair. This indicator is not linked to the speed of
repairs and, therefore, was not impacted by
COVID nor by the difficulties in finding materials.
Looking at the instances of noncompliance in
marketing and communications, in 2021 there
were two instances of non-compliance. In the
first case the Italian Minister of Health filed a
complaint relative to the Ariete product as the
chemical substance used by the product was
registered as a detergent and not a disinfectant.
The Ministry asked that all the informational and
marketing material relative to this product be
changed, eliminating any and all references to
the product’s disinfecting actions. In the second
instance, a case of non compliance of Capital
Brands was recorded and resolved with a minor
financial settlement agreed between the parties.
In 2019 there were two, resolved, incidents which
did not result in fines, only a warning, while in
2020 there were no incidents.
Report on operations
59De’ Longhi Group
Scenario and risks
Preventing and managing the risks associated
with the supply chain is essential to ensuring the
continuity of the Group’s business. The Group
moves in this direction, encouraging its suppliers
to adhere to the best practices for product quality,
working conditions, human rights, health, safety
and environmental responsibility
The De’Longhi Group’s value chain comprises six
plants located in Italy, Switzerland, Romania and
China where the manufacturing and assembly of
nished products is done. This activity covers 60%
of sales and is supported by a group of qualied
partners or “Original Equipment Manufacturers”
The Covid-19 crisis inevitably impacted the as-
sessment and management of supply chain risks
as the Group had to address logistic emergencies
stemming from local restrictions and border clos-
ings which were managed in accordance with the
law, while striving to guarantee operational
continuity.
For more information about management of the
risks linked to supply chain management, please
refer to the section “Risk factors for the De’Longhi
Group”, specically paragraph 8 (Risks relating to
manufacturing, commodity prices and supplier
relationships).
For more information on the measures used to
prevent and manage supply chain risks please
also refer to the table “The main risks associated
with non-nancial issues and management meth-
ods” in the Note on Methodology.
Business and organizational model
Supply chain management is carried out by the
Supply Chain Division, together with Quality and
Purchasing, with a view to ensuring business
continuity, compliance with the highest quality
standards and certain environmental, as well as
social, requirements.
Three offices are involved in assessing, monitor-
ing and supporting the providers of finished
products based on product category and proxim-
ity to production: the offices focused on coffee
and irons are in Italy; motor-driven products are
managed through the UK office, while in Hong
Kong the focus is on comfort. This structure
makes it possible to respond to the specific
needs of the different markets in which the Group
operates effectively and quickly.
Management of the materials for components
(quantity and logistics) needed for production in
Europe is entrusted to two teams of the Supply
Chain Division, one in Italy and one in Romania.
Management of materials at the Chinese plants
is supervised directly by the plant directors with
the support of three purchasing offices broken
down by product category.
The Quality Division periodically audits and in-
vestigates the quality of the finished products
and also conducts audits in order to ensure pro-
tection of human rights and compliance with the
values and principles included in the Code of
Ethics relating to labor practices and, beginning
in 2019, the main environmental regulations. The
social and environmental audits are done of the
suppliers of the Chinese plants in accordance
with the international standard SA 8000 (Social
Accountability). More in detail, the audits make it
possible to investigate a multitude of different
social aspects including, for example, freedom of
association and collective bargaining, work
hours, work conditions, health and safety, child
labor, forced labor, discrimination and training of
personnel; the audits are typically carried out
every two years. In addition to the social ac-
countability audits already carried out, as of 2020
environmental audits are also performed. Envi-
ronmental criteria were, therefore, added to the
checklist of the Social Accountability audits
which include: verification that the supplier has a
system in line with the ISO 14001 standard, that
identifies the supplier’s best practices with
regard, in particular, to issues like emissions, and
waste management. In this way, every time a
supplier is subject to a social accountability
audit, an environmental audit will also be carried
out.
The information gathered, any corrective meas-
ures and the relative follow-up are logged into a
specific system which monitors supplier updates
and obligations. This assessment process is for-
malized and monitored based on a specific pro-
cess which, beginning in 2019, established offi-
cially that all new suppliers are subject to the
SCOC (Social Accountability Code of Conduct).
Product quality is assessed based on a group of
specific indicators:
1. Technical Factory Audit (TFA): measures the
effectiveness of the quality system and the
management of the suppliers. This type of
audit is conducted every year and focuses on
both initial quality, as well as subsequent peri-
odic monitoring of suppliers. As explained
above, the checklist for this type of audit in-
cluded a section dedicated to environmental
issues.
2. Quality Evaluation (QE): measures product
quality based on statistical sampling of each
single lot.
3. On Time Delivery (OTD): measures the
delivery time of the supplier and, more specif-
ically, the difference between the delivery date
agreed upon and the actual one.
4. Order Fill Rate (OFR): measures the ability of
the supplier to refill the entire quantity re-
quested by the Group.
The assessments of product quality are included
in a vendor rating which is used to classify part-
ners in four categories - preferred, approved, pro-
bation and exit plan - as well as evaluate the
structure and intensity of partnerships in the
future, with a view also to continuous
improvement.
Policies and objectives
While there is no formal Group policy, the Code of
Ethics governs the relationships with suppliers
which should be conducted in accordance with
the law and applicable regulations, as well as the
general principles dened in the Code. The suppli-
er selection process, furthermore, should be done
based on an objective comparison of quality,
price, execution and assistance while avoiding
any and all forms of favoritism or discrimination.
Throughout any relationship with the Group, the
suppliers are also required to comply fully with the
law and the Code. The Group suppliers are re-
quested to ensure that the working conditions of
its employees do not violate basic human rights,
comply with international agreements and current
law. The supplier must provide all of its sub-con-
tractors with a copy of the updated Code of Ethics.
In order to further strengthen the Group’s commit-
ment to responsible supply chain management,
as of 2019 the Chinese suppliers of nished prod-
ucts are required to also sign the Group Code of
Conduct which is presented to them in English
and Chinese.
Supply chain management
Report on operations
60De’ Longhi Group
Supply Chain and Quality are committed to devel-
oping enduring relationships with suppliers in
order to ensure quick responses to market and
production needs. As for logistics, the Group in-
tends to build a direct and simplied network fa-
voring direct deliveries, consistent with the
Group’s expectations.
Lastly, the Group is working on “Responsible
sourcing guidelines” to be applied to its own
supply chain.
Actions taken to ensure continuity
In 2021 there was an acceleration in e-commerce
activities, focused on delivery to the client, while
skipping the transfer to the retailer’s warehouse.
In this way, the Group aims to further improve the
eciency of its deliveries by reducing the number
of steps, which will also be benecial in terms of
environmental impact. If in 2020 the closings
caused by the pandemic resulted in a less straight
forward management of the supply chain, in 2021
the main obstacle was the lack of components.
The Group, however, worked to guarantee continu-
ity in supply chain management, to the extent that
there were only a few slowdowns in distribution
and it was almost never interrupted, thanks to the
search for alternative solutions for the procure-
ment of materials and spare parts.
In light of what was, at times, still a critical situa-
tion, the supplier audits were sometimes conduct-
ed remotely.
Key gures
In 2021, all the new suppliers of finished prod-
ucts were subject to a social accountability audit,
in accordance with standard SA 8000 (100%). To
date none of the SCOC (Social Accountability
Code of Conduct) audits had a “zero tolerance”
outcome and, therefore, resulted in the termina-
tion of the relationship with the supplier.
With regard to environmental aspects, in 2021
environmental audits of 14 or 100% of the new
suppliers of finished products were carried out,
consistent with the figure recorded in 2020
(100%)
Lastly, in 2021 a total of 46 audits were carried
out in order to verify that no human rights viola-
tions had occurred at 42 supplier plants and 4
Group plants, which covered almost 42% of the
Group’s operations, lower than in the prior year
(60%).
Total number of operations that have been subject to human rights reviews
Total number of operations
Percentage of operations that have been subjected to human rights reviews
2019
2020
2021
50
53
46
103
89
109
48.5%
59.6%
42.2%
Number of new suppliers
Number of suppliers audited
Percentage of new suppliers audited out of total
2019
2020
2021
22
15
14
20
15
14
100.0%
100.0%
90.9%
Number and percentage of transaction subject
to human rights assessments
New suppliers of nished products subject
to social accountability audit
Report on operations
61De’ Longhi Group
Scenario and risks
The De’Longhi Group, which operates daily in an
international environment of continuous change,
pays constant attention to the proper manage-
ment of its manufacturing processes. Consistent
with this constant change, the Group’s environ-
mental regulations are updated continuously,
forming a crucial part of correct business man-
agement and the impact they could have on the
latter.
For more information about environmental risks,
as well as risk management, please refer to the
section “Risk factors for the De’Longhi Group”,
specifically paragraphs 15 (Risks relating to
changes in the regulatory framework) and 16
(Risks relating to environmental harm) in the sec-
tion”, as well as the section “Risk factors for the
De’Longhi Group”.
For more information on the measures used to
prevent and manage environmental risks please
also refer to the table “The main risks associated
with non-financial issues and management
methods” in the Note on Methodology.
Business and organizational model
At a Group level, the environmental aspects are
managed by the Operations & Technology and
Quality Divisions. More in detail, the ISO14001
certified environmental management system in
place at the production facilities in Mignagola
and Cluj, and at the Salonta plant in Romania as
of 2021, make it possible to carry out environ-
mental assessments of these plants and define
the steps needed to reduce the environmental
impact of the entire value chain.
The production facilities in OnShiu and Dongguan
(China) strive to comply with the best practices for
environmental management consistent with
internal procedures and applicable regulations.
Work is also being done on obtaining ISO 14001
certication for the two facilities.
As of a few years ago solar panels had already
been installed at the Mignagola plant. These allow
for the self-production of 950.972 kWh, in 2021,
corresponding to approximately 6% of the electric-
ity consumed which lowers the environmental
impact linked to the production of electricity con-
siderably. In the coming months monitoring sys-
tems will be installed at both the Mignagola plant
and the recently expanded Treviso headquarters
which make it possible to carry out thorough eval-
uations of energy eciency and consumption. In
2021 work also continued on renewing the lighting
systems at the Italian, Chinese and Cluji plants:
the installation of LED lighting in the production
areas at Mignagola was completed and the light-
ing in the warehouse of nished products, where
currently there are movement sensors in the
aisles, was redesigned. At the Cluj plant substitu-
tion of the traditional lighting with LED lighting
continued. This change will make it possible to
reduce the consumption of electricity like-for-like
by almost 90,000 MJ. Another important change
in the energy saving plan pursued by the Group is
the installation of a co-generator at the Mignagola
plant, which will be completed in 2022. In the
same plant, where already in 2020 new, higher
performing and energy ecient compressors
were installed, in 2021 the summer air condition-
ing system was upgraded; the installation of ma-
chinery which sucks air in rather than recycling it,
which now allows for a consistent exchange of air
which also helps to contain the spread of Covid-
19. At the Treviso headquarters a few charging
stations for electric cars were installed which
became necessary as the company cars now
comprise hybrid or 100% electric models.
In 2019 a heating system for the warehouses
was installed at the Cluj plant that uses the heat
generated in the plant’s drying facilities which re-
duces the use of natural gas for traditional
heating.
In China, where over the past few years part of
the plastic stamp machinery was renewed, simi-
lar to 2020, in 2021 further work was done on
improving the energy efficiency of productive
assets, resulting in specific improvements being
made to machinery in order to increase energy
efficiency and productivity. The partnership with
the local government relating to energy savings
also continued: as part of the energy saving plan,
in 2020 meters were, in fact, installed which
make it possible to monitor the consumption of
electricity and find the areas and functions which
consume the most energy. Thanks to these
meters, the Group has been able to periodically
map the consumption in the different areas and,
based on the results, find ways to reduce energy
consumption and improve energy efficiency at
both of the Chinese facilities
As in past years, a number of timely initiatives
were implemented, promoted both centrally and
locally by the R&D Divisions, which aim to reduce
the environmental impact of the Group’s prod-
ucts when used by consumers. These initiatives,
which target mainly energy efficiency, durability
and product repairability, are consistent with the
Group’s approach to sustainability. Please refer
to the section “Product innovation and quality”
for more information.
Consistent with the idea of a circular economy
and responsible waste management, the Group
continued with the existing projects involving the
recovery of the by-products of production. For
several years now, at the Mignagola and Donggu-
an plants, plastic scraps have been reused in the
manufacturing cycle which reduces initial raw
material costs and the amount of waste to
dispose of. The results of this activity were excel-
lent and the initiative in 2019 was also launched
at the plant in Cluj. The metal scrapes, rather, are
resold as raw materials. Paper, cardboard and
nylon scraps are sent to be regenerated.
The Group continued to analyze efficiencies and
ways to reduce product packaging materials
which produced excellent results in both environ-
mental (lower environmental impact as a result
of the reductio in the raw materials and waste to
be disposed of) and economic (thanks to lower
raw materials costs) terms. For the Braun brand,
in addition to the work done over the years on
finding ways to reduce the amount of plastic
used in the packaging of Braun brand handblend-
ers, in 2020 a LCA (Life Cycle Assessment) was
carried out relative to the different types of pack-
aging used currently in order to find alternative
solutions with a lower CO
2
footprint. Toward this
end, in 2021 studies and evaluations were carried
out in order to find a software to be used for the
LCA activities that works for the entire Group. In
the wake of what was done in 2020, the Braun
and Kenwood brands further developed studies
and partnerships (with both universities and ex-
ternal partners) relative to alternative materials
made from renewable energy sources to substi-
tute the plastic used in the packaging, the big
bags (made out of plastic) and the EPS packag-
ing. The packaging efficiency initiatives also in-
volved the Group’s internal logistics and opera-
tions: at the Chinese plants and the one in Cluj
the goal is to reuse the plastic and cardboard
packaging of the components delivered which
are otherwise disposed of upon arrival.
The pallets, used throughout the Group’s opera-
tions, are worthy of a separate discussion. In Ro-
mania, instead of buying new ones, repaired pal-
lets are used which in 2019 made it possible to
reuse 5,500 pallets or approximately 1,300 trees.
8
Reducing environmental impact
Report on operations
62De’ Longhi Group
At the Italian plan in Mignagola wooden pallets
have substituted with pallets made out of recy-
cled plastic.
Responsible waste management is also ex-
pressed through the special attention given to in-
formed waste management, incentivizing recy-
cling at both the offices and the production
facilities, in order to minimize the quantities dis-
posed of. In the production plants, special sig-
nage helps to correctly separate hazardous
waste from non-hazardous waste.
Policies and objectives
A few of the Group’s facilities, including in Migna-
gola and Cluj and the Kenwood headquarters,
have adopted an Environmental Policy which has
a number of objectives: these include, compli-
ance with all current legislation in each Country
where the Group operates, commitment to the
steady improvement of environmental perfor-
mances, optimization in the consumption of re-
sources and energy, reduction or, if possible,
elimination of any form of pollution, as well as
the deployment of technologies and processes
which minimize environmental risks.
A Group Environmental Policy has yet to be for-
malized, although the Code of Ethics states
clearly that all activities are shaped by the need
for environmental protection and public safety in
accordance with the law. Well aware of the
impact of its activities on economic and social
development, as well as general wellbeing, the
Group strives to achieve a balance between eco-
nomic initiatives and environmental needs, in-
cluding, above all, with a view to future genera-
tions. This commitment ensures that the
projects, processes, methods and materials are
based on scientific research and development,
as well as the best environmental practices, that
respect the community, as well as prevent pollu-
tion and protect both the environment and the
landscape.
8 The calculation used can be found at www.palletconsult-
ants.com/blog/pallet-recycling-saves-trees.
Report on operations
63De’ Longhi Group
Key gures
In 2021, consumption increased 12,4% with re-
spect to the prior year (422.263 GJ in 2021 com-
pared to 376,062 GJ in 2020). This increase is at-
tributable to both the higher number of units
produced compared to 2020 and the acquisition by
the De’ Longhi Group of the Swiss Eversys plant
and the rst year in which the Romanian plant Sa-
lonta was working at full capacity for the De’Longhi
Group. The amount of direct consumption for heat-
ing and transport, as well as indirect (electricity
through district heating and cooling) was basically
unchanged in the three-year reporting period.
Fuel consumption u.m.
Production facilities Other types of oces
9
De’Longhi Group
2019 2020 2021 2019 2020 2021 2019 2020 2021
Direct energy consumption from non-renewable sources
Gas GJ 3,017 2,824 3,948 9,605 6,646 7,181 12,623 9,470 11,129
Diesel GJ 6,170 5,180 6,991 22,847 16,010 18,274 29,112 21,189 25,265
Natural gas GJ 36,298 46,388 42,869 5,145 5,034 5,115 41,443 51,422 47,984
LPG GJ 568 587 518 - 667 712 568 1,254
10
1,231
Fuel oil GJ - - - 203 142 61 203 142 61
Total GJ 46,053 54,979 54,327 37,801 28,498 31,343 83,949 83,477 85,670
Direct energy consumption from renewable sources
Energy produced from
renewable sources and
consumed
GJ 3,548 3,567 3,423 39 40 - 3,587 3,607 3,423
Total direct energy
consumption
GJ 49,601 58,546 57,750 37,840 28,538 31,343 87,536 87,084 89,093
Indirect energy consumption
Electricity purchased GJ 232,701 257,881 296,557 31,206 28,984 34,291 263,887 286,865 330,848
District heating GJ - - - 2,359 2,113 2,322 2,359 2,113 2,322
Cooling GJ - - - - - - - - -
Total indirect
consumption
GJ 232,701 257,881 296,557 33,565 31,097 36,613 266,246 288,978 333,170
Total consumption GJ 282,301 316,427 354,307 71,405 59,635 67,956 353,782 376,062 422,263
In the three-year period 2018- 2020, 5.5, 6.5 and 57.6 GJ of electricity produced from renewable sources were produced at sites, which were then transferred to the national grid. In 2018 the method
used to measure the electricity consumed at the Campi Bisenzio oces was changed.
9 “Other types of oces” includes the oces, distribution branches, warehouses and, in general, all of the De’Longhi Group’s structures not related to production.
10 The 2021 gure relative to GPL consumption includes the consumption of a De’Longhi Group asset for which this information was not available in 2020.
Report on operations
64De’ Longhi Group
The indirect electricity consumption per unit of production was lower, 5.3 kWh in 2021 vs. 6.2 in the two-year
period 2019-2020.
In 2021 CO
2
emissions amounted to 44,477 tons,
slightly higher (11%) compared to the 40,030 tons
recorded in 2020 (including the indirect CO
2
emis-
sions calculated using the “Location Based”
method). Consistent with energy consumption, the
CO
2
emissions are attributable mainly to the con-
sumption of electricity, which accounts for around
88% of the Group’s total CO
2
emissions. Further-
more, as the important reduction in market-based
emissions (-28%) shows, during the reporting
period the Group acquired guarantees of origin for
energy consumption for all the Italian headquarters
and the plant in Cluj (Romania).
Products plants (GJ)
Other types of oces (GJ)
Energy consuption (KWh/units produced)
2019
2020
2021
232,701
257,881
296,557
33,565
31,097
36,613
5.3
6.2
6.2
Emissions [ton CO
2
]
Production facilities Other types of oces
11
De’Longhi Group
2019 2020 2021 2019 2020 2021 2019 2020 2021
Direct 2,743 3,235 3,249 2,689 2,003 2,215 5,439 5,238 5,464
Indirect - Location Based 30,549 31,567 35,523 3,692 3,225 3,460 34,240 34,792 38,983
Indirect - Market Based 33,852 33,854 23,452 4,616 3,980 1,974 38,465 37,833 25,426
TOT (Direct + Indirect - Location Based) 33,293 34,802 38,772 6,381 5,228 5,675 39,679 40,030 44,477
TOT (Direct + Indirect - Market Based) 36,596 37,089 26,701 7,305 5,983 4,189 43,905 43,072 30,890
11 “Other types of oces” includes the oces, distribution
branches, warehouses and, in general, all of the De’Longhi
Group’s structures not related to production.
Report on operations
65De’ Longhi Group
Production plants (tons CO
2
)
Other types of oces (tons CO
2
)
Energy consumption (kg di CO
2
/units produced)
2019
2020
2021
30,549
31,567
35,253
3,692
3,225
3,460
2.3
2.8
3
The comparison of Scope 2 CO
2
emission per unit manufactured shows a largely stable trend in the three-
year period, characterized by a slight decrease of around -18% against the prior year, falling from 2.8 kg of
CO
2
per unit produced in 2020 to 2.3 kg of CO
2
per unit produced in 2021.
In 2021 12,670 tons of waste was produced, an in-
crease of 32% compared to 2020; 98% of this was
non-hazardous, while the remaining 2% was haz-
ardous. The increase in the total waste produced is
attributable mainly to increased production vol-
umes, the acquisition of the Swiss plant of Eversys
and the rst year in which the Salonta plant was
working at capacity for the De’Longhi Group. Ap-
proximately 88% of the waste produced (90% of the
non-hazardous and 11% of the hazardous) was
sent to be recovered through reuse, recovery, recy-
cling and composting.
All of the waste produced by the De’Longhi Group
in 2021 was treated offsite.
Waste produces u.m.
2019 2020 2021
Hazardous Non-hazardous Hazardous Non-hazardous Hazardous Non-hazardous
Reuse ton 2 0 2 0 1 0
Recovery ton 52 1,765 58 1,907 21 2,396
Recycling ton 4 5,790 34 6,658 10 8,572
Composting ton 0 68 0 98 0 198
Incineration (including energy recovery) ton 9 147 16 550 33 904
Incineration ton 1 0 38 0 48 0
Landll ton 60 69 16 91 67 215
Storage ton 34 6 34 21 51 23
Other ton 0.2 91 0,2 64 59 71
Total ton 163 7,937 198 9,390 290 12,379
Report on operations
66De’ Longhi Group
Storage
Landll
Recovery
Recycling
Reuse
Incineration
(including energy recovery)
Incineration
Other - Chemical treatment
Storage
Landll
Recovery
Recycling
Incineration
(including energy recovery)
Composting
Other - Biological treatment
Non-hazardous waste
Hazardous waste
2019
2020
2021
7,937
9,390
12,379
163
198
290
Waste produced at the production plants in 2021 (tons)
Hazardous waste produced in 2021 broken down by disposal method Non-hazardous waste produced in 2021 broken down by disposal method
17.6%
19.4%
23.1%
69.2%
7.2%
1.7%1.6%
0.2%0.5%
11.4%
16.6%
20.3%
7.3%
0.3% 3.5%
Report on operations
67De’ Longhi Group
Reporting scope and standards used
In accordance with the Decree, the reporting scope
corresponds with the scope of consolidation used
in the consolidated nancial statements, namely
the continuing operations fully consolidated using
the line-by-line method in the nancial reports,
unless provided otherwise. With regard to 2021, the
companies De’Longhi Brasil - Comércio and Impor-
tação Ltda and De’Longhi Bosphorus Ev Aletleri Ti-
caret Anonim Sirketi were excluded insofar as they
are currently being liquidated and have no employ-
ees registered at 31.12;
The gures relative to 2021 include the companies
belonging to the Capital Brands Group, acquired at
the end of December 2020 and Eversys, the control
of which was acquired in 2021. The date of inclu-
sion in the scope of consolidation coincides with
what was determined for the nancial gures. The
2021 gures for the above-mentioned acquisitions
many not be entirely consistent with the prior three-
year reporting period.
The information and gures used in this section
refer to 2021.
The De’Longhi Group used the GRI Sustainability
Reporting Standards (hereinafter the GRI Stand-
ards), published by GRI - Global Reporting Initiative,
to prepare its NFS. More in detail, as called for in
paragraph 3, Standard GRI 101: Foundation, the
“Reconciliation of De’Longhi’s material topics and
the GRI Standards”, shown below (“GRI-referenced”
claim), shows the reporting standards used. In ad-
dition to what is shown in this table, the following
standards were also used in this NFS: GRI 102 -
General Disclosures 2016 (102-1, 102-2, 102-3,
102-4, 102-5, 102-6, 102-7, 102-8, 102-9, 102-10,
102-11, 102-13, 102-18, 102-40, 102-42, 102-43,
102-44, 102-45, 102-46, 102-47, 102-48, 102-49,
102-50, 102-52, 102-53, 102-56) and GRI 103 -
Management Approach 2016 (103-1, 103-2).
Denition of the material topics
In accordance with Legislative Decree 254/2016,
as amended, this statement provides a description
of the De’Longhi Group qualitative/quantitative per-
formances with respect to the topics deemed ma-
terial for the Group and its stakeholders.
In 2017 the De’Longhi Group carried out a material-
ity analysis in accordance with GRI 101 - Founda-
tion and the disclosure standards GRI 102-46 and
102-47 in order to determine the material topics
based on the economic, environmental and social
impact of its businesses and their inuence on the
assessments and decisions of the Group’s stake-
holders that are focused on in the NFS 2021. This
process was updated in 2021.
The Group’s material topics were dened after
having completed the following analyses:
• analysis of sector sustainability trends: mapping
of the main non-nancial topics reported on by
the Group’s peers;
• analysis of the sector trends: mapping of the
main non-nancial topics deemed material for
the home appliances sector based on the publi-
cations of a few international organizations such
as, for example, GRI, RobecoSam, SASB, S&P
Global Ratings;
• analysis of pressures from customers and
consumers;
• analysis of pressures from nancial analysts;
• analysis of company priorities: through inter-
views of management and analysis of the main
corporate documents such as, for example, Sus-
tainability Policy, the Code of Ethics, the Code of
Conduct, the 231 Model.
The results of these analyses led to the denition of
the non-nancial aspects that are the most materi-
al and key to understanding the company’s
business, performance, results, as well as impact,
and, therefore, reported on in the De’Longhi Group’s
non-nancial report. More in detail, more weight
was given to the topics that better express the ex-
pectations of the stakeholders that are the most
dependent on the Group and that can have the
greatest impact on corporate strategies. The topics
identied were then, subsequently, assessed and
integrated by company management based on pri-
orities and strategic objectives.
The material topics reported on in this consolidat-
ed Non-Financial Report for each area of Legisla-
tive Decree 254 are shown below. For the sake of
greater clarity and to facilitate the comparison of
the GRI Standards, the material topics and the
areas covered under the Decree are shown in the
chart below which also includes the topic perime-
ter and any boundaries.
Note on methodology
Report on operations
68De’ Longhi Group
Reconciliation of De’Longhi’s material topics with the GRI Standards
12
Decree 254 Macro Areas Material Topics GRI standards
Topic-Specic GRI
disclosure
Topic perimeter Boundaries of the reporting perimeter
Internal External Internal External
Fight against
corruption
Compliance
Business ethics and integrity
GRI 205 - Anti-corruption (2016)
GRI 205-2 (points
b,c,e); GRI 205-3
Group
Commercial
partners
- -
GRI 206 - Anti-competitive behavior (2016) GRI 206-1 Group - - -
Use of cosumer data GRI 418 - Customer privacy GRI 418-1 Group - - -
Product safety and labelling
GRI 416 - Customer health and safety GRI 416-1 Group - - -
GRI 417 - Marketing and labeling GRI 417-2; GRI 417-3 Group - - -
Human
resources
managment
Human rights
Personnel
Attraction and development of talents GRI 404 - Training and education (2016) GRI 404-1 Group - - -
Inclusion and equal opportunities
GRI 405 - Diversity and equal opportunity
(2016)
GRI 405-1 Group - - -
Health and safety of employees
GRI 403 - Occupational health and safety
(2018)
GRI 403-9 Group
Suppliers
Contact
Centers
-
Reporting does
not involve the
Contact Centers
Respect of human rights GRI 412 - Human rights assessment GRI 412-1 Group Suppliers -
Reporting does
not involve
suppliers
Social
aspects
Clients and
products
Innovation and eco-design Non GRI topic - Group
OEM
suppliers
- -
Consumer satisfaction Non GRI topic - Group - - -
Promotion of sustainable lifestyles Non GRI topic - Group - - -
Social
aspects
Environmental
aspects
Supply chain
and
community
Responsible management of the
supply chain
GRI 308 - Supplier environmental
assessment
GRI 308-1 Group - - -
GRI 414 - Supplier social assessment (2016) GRI 414-1 Group Suppliers - -
Environmental
aspects
Environment
Management of GHG emissions and
ght against climate change
GRI 302 - Energy (2016) GRI 302-1; GRI 302-3 Group - - -
GRI 305 - Emissions (2016)
GRI 305-1; GRI 305-2;
GRI 305-4
Group
Suppliers
Contact
Centers
-
Reporting does
not involve
suppliers or
Contact Centers
Waste management and circular
economy
GRI 306 - Waste (2020)
GRI 306-3; GRI 306-4;
GRI 306-5
Group -
Reporting does
not involve
oces
-
12 In addition to the 13 topics reported in the matrix, the following non-material issues were also analyzed: community relations, management of water resources, polluting emissions, protection of bio-diversity.
Report on operations
69De’ Longhi Group
With regard to the topics referred to explicitly in
Legislative Decree 254/2016, please note that
water consumption, the dialogue with social enti-
ties and the agreements of international and supra-
national organizations did not result material in the
materiality analysis. These topics, therefore, are
not reported on in this report.
Legislative
Decree 254
Main risks Risk management tools
Fight against
corruption
• Risks connected to administrative liability of legal entities, particularly with regard to Legislative
Decree 231/2001 which introduced specic rules relating to liability for a few types of crimes to
the Italian legal system
• Risks tied to the Group’s current or past commercial relationships with related parties
• Reputational risk
• Group Code of Ethics
• Model of organization, management and control pursuant to Legislative Decree 231/2001
• Group’s internal control and compliance system
• Corporate Governance Guidelines
• Procedure for Related Party Transactions
Human
resources
management
Human rights
• Risks connected to human resources management, particularly with regard to the Group’s abili-
ty to recruit, develop, motivate, retain and promote personnel with the attitudes, values, special-
ized professional and/or managerial skills needed to meet the Group’s changing needs.
• With regard to the Chinese platform, there are also a few risks related to high turnover of Chi-
nese blue-collar workers
• Risks tied to possible instances of discrimination
• Group Code of Ethics
• Model of organization, management and control pursuant to Legislative Decree 231/2001
• Group’s internal control and compliance system
• OHSAS 18001 compliant organizational model
• Worker safety and health policy in place at European plants
• Compensation policy for the BoD and executives with strategic responsibilities
• Performance review process
• MBO procedure
• Employee surveys
• For the Chinese plants: incentive schemes to foster staff retention, investment in training and
the development of more qualied internal resources, improvements in living and working con-
ditions inside the different plants
e main risks associated with non-nancial
issues and management method
With regard to the possible risks, inicted and
caused, associated with the issues identied by the
De’Longhi Group as “material”, the main risks asso-
ciated with and the relative management of the
area of Legislative Decree 254 are described in fol-
lowing table.
Report on operations
70De’ Longhi Group
Legislative
Decree 254
Main risks Risk management tools
Social aspects
Environmental
aspects
Product quality and innovation
• Risks connected to the De’Longhi Group’s to continue with product innovation
• Risks associated with patents and trademarks
• Risks connected to product quality and liability for violations of the quality standards applied in
the different jurisdictions where the Group
• Risks connected with regulatory changes, relating in particular to environmental protection, es-
pecially the regulations relating to the safety and energy eciency of electric household appli-
ances, recyclability and environmental friendliness
• Group Code of Ethics
• UNI EN ISO 9001:2015 certied Quality System
• Food safety management model
• Quality policy
• NPD procedures
• Quality audits
• Constant monitoring of regulatory changes
• Registration of product patents and trademarks
Social
aspects
Consumer relations
• Risks associated with warehouse size and the timeliness of deliveries; more in detail, in the
event the Group doesn’t have an adequate quantity of products it could run the risk of not being
able to meet customer demand in a timely manner. Another risk stems from potential supply
chain issues which could impact the adequacy of the service provided
• Risks relating to IT systems: in relation to events which could compromise service continuity
and integrity of the data
• Group Code of Ethics
• Model of organization, management and control pursuant to Legislative Decree 231/2001
• Group’s internal control and compliance system
• GDPR policy (includes policy for the storage of data and procedure for the management of data
breaches)
• Training of employees in IT safety and privacy
• Presence of structures dedicated to monitoring the level of customer satisfaction
Social
aspects
Human rights
Supply chain management
• Risks connected to supplier relationships with regard, in particular, to reliable product quality,
logistics and timely deliveries, as well as relationships with company employees
• Risk of being dependent on a single supplier for certain types of components for strategic
products
• Group Code of Ethics
• Model of organization, management and control pursuant to Legislative Decree 231/2001
• Procedure for Related Party Transactions
• Social accountability audits
Environmental
aspects
• Risks relating to environmental harm: the manufacturing done by the Group at its plants and fa-
cilities could harm third parties, cause accidents or environmental harm if serious breakdown or
malfunctions were to occur
• Risks connected to climate change: extreme weather conditions (like oods, high levels of pre-
cipitation, hurricanes) could undermine the Group’s ability to operate
• Risks connected to inappropriate energy management practices: poor sustainability practices
in energy management could make it more dicult to reduce the energy footprint and/o accel-
erate climate change
• Group Code of Ethics
• UNI EN ISO 14001:2015 certied environmental management system for the European plants
• Group’s internal control and compliance system
• Environmental policy applicable also the production facilities in Mignagola and Cluj
• With regard to the risks connected to climate change, the Group adheres to the standards and
management methods shaped by the UNI EN ISO 14001:2015 environmental management
system. In 2021 the risk perceived by the Group’s main companies relative to the possible
impact that climate change could have on the business was mapped; this mapping will be ex-
panded to include all the Group’s branches in 2022
Report on operations
71De’ Longhi Group
e reporting process and the methods of cal-
culation used
The content used in the NFS 2021 was prepared by
all the relevant company divisions and those re-
sponsible for the aspects referred to in the report.
The main methods of calculation used, and the rel-
ative updates, are listed below:
• Similar to what happened in the prior year (2020),
the Group adopted the most recent version of
the Disclosure GRI 403 (Occupational Health and
Safety) issued in 2018 by the GRI. The historial
data relative to 2019, therefore, was been
restated.
More specically, as required by the GRI Stand-
ards, the number of injuries recorded includes
travel on transportation organized by De’Longhi
and excludes the other instances.
The historical data also reect an update of the
calculation used to estimate the hours worked at
one of the Group’s production plants;
• Injury rate is the total number of injuries ex-
pressed as a percentage of the total number of
labor hours multiplied by 1,000,000, excluding
commuting accidents;
• Severity rate is the total number of serious acci-
dents expressed (which resulted in absences of
more than 6 months) as a percentage of the total
number of labor hours multiplied by 1,000,000;
• the rst-time quality (FTQ) indicator is the
number of products without defects as a per-
centage of total production for the year;
• the service call rate (SCR) is the number of ma-
chines repaired in the rst year under warranty
as a percentage of total yearly sales. This indica-
tor is calculated quarterly on a rolling 12-month
basis;
• the rst-time x (FTF) indicator is the number
of repaired products that did not need further re-
pairs in the six months following completion of
the initial repair as a percentage of total product
repairs; the greenhouse gas emissions are cal-
culated based on the international standard ISO
14064-1. The only greenhouse gas considered
was carbon monoxide (CO
2
). The self-produced
energy from renewable sources was excluded
from the calculation of greenhouse gas
emissions.
Emission factors used to calculate CO
2
emissions
were determined as follows:
• Direct emissions (Scope 1): the emissions
linked to the consumption of natural gas, diesel
heating fuel, gas, diesel fuel and LPG for the
company cars was determined based on the
emission factors reported in the table of national
standards published by the Italian Ministry of the
Environment, for the years 2019, 2020 and 2021.
• Indirect emissions (Scope 2): indirect emis-
sions are linked to the consumption of electricity
and district heating; the emissions linked to elec-
tricity were calculated based on a location and
market based approach. Location based emis-
sions were calculated by taking into account, for
each country, the factors referred to in the most
recent version of Table 49 - Primary socio-eco-
nomic and energy indicators published by Terna
(Italian grid operator), in the International Com-
parison section, based on the most recent Ener-
data data used to calculate Scope 2 emissions,
2019 version for 2021, 2018 version for 2020,
2017 version for 2019. In the event a country
was not listed in the above table, we used the
emission factor for the continent. When there
were several branches in several countries, the
highest of the emissions factors among these
countries was used.
• With regard to the market based emissions,
when available, the residual mixes found in the
“European Residual Mixes”, published by ABI for
the years 2018-2020, were used. An average re-
sidual mix per NERC Region, calculated based
on the residual mixes shown in the document
Green-e Energy Residual Mix Emissions Rates
for the year 2018, were used for the United
States for the year 2019, while for the years
2020-2021 an average residual mix per eGrid
Subregion calculated based on the residual
mixes shown in the document 2020 Green-e
Energy Residual Mix Emissions Rates was used.
An average residual mix per NERC Region, calcu-
lated based on the residual mixes shown in the
document Green-e Energy Residual Mix Emis-
sions Rates for the year 2018 was used for
Canada. As for the countries for which no residu-
al mix gures were available, location based
emissions factors found in the above mentioned
Terna table were used.
District heating emissions were calculated using
the emissions factors found in the document “UK
Government GHG Conversion Factors for Compa-
ny Reporting” published by the Department for En-
vironment Food & Rural Affairs (DEFRA) table for
the three-year period 2019-2020-2021.
Report on operations
72De’ Longhi Group
S
Subsequent events
After 31 December 2021 through the date on which
this annual report was approved, no events oc-
curred that would have had a signicant impact on
the nancial and economic results recorded, as per
IAS 10 - Events after the reporting period.
With regard to the international scenario, in the rst
few months of 2022 the European geopolitical situ-
ation gradually took a turn for the worse. The rapid
escalation of the tensions between Russia and
Ukraine has given rise to concerns, rst of all, about
the safety of everyone, all the employees and their
families and, secondly, the economic situation in
these markets.
Based on 2021 gures, approximately 5% of the
Group’s total consolidated revenue was generated
in Russia and Ukraine.
The Group has taken the steps necessary to ensure
the safety of the personnel at the Ukraine branch,
facilitating the relocation of employees to other
Group branches, guaranteeing payment of salaries
and adequate nancial and medical assistance for
all employees and their families.
The worsening of the situation in the last few
weeks has blocked the commercial branch’s activi-
ties and puts the recoverability of company assets,
receivables with local retailers (including in light of
the lack of insurance) and inventory at risk.
With regard to the Group’s main assets in Russia -
trade receivables and inventory - no critical areas
have emerged. Most of the trade receivables are
covered by insurance policies stipulated with a pre-
miere international insurance company and to date
the exposure is very limited thanks to the payments
received already. The delivery of products already in
the local warehouse continued and more stringent
receivables management measures were adopted.
To date new deliveries to Russia, as well as all the
investments and projects in the pipeline, have been
blocked.
The Group is carrying out a series of assessments
in order to estimate the possible economic and -
nancial impact of a scenario that today is entirely
uncertain for both the commercial and global
markets.
During a meeting held today, the Board of Directors
approved a donation of €1 million order to support
the people affected by the conict in Ukraine.
Lastly, with regard to the production and the invest-
ments made to increase and improve production
capacity, in February 2022 a new plant was ac-
quired in Romania which will be added to the two
existing facilities.
Other than the above, no other signicant events
occurred after the close of the year.
Report on operations
73De’ Longhi Group
O
Outlook
At present, the main elements that will affect the
macro-economic scenario in the coming months
are on the one hand the progressive improvement
of the pandemic outlook in developed countries
and on the other hand the cost inationary trend of
some production factors and the tragic events of
the Ukrainian conict, whose developments make
the business evolution in an important part of the
Eastern European region dicult to read.
Compared to the initial guidance on 2022 sales
growth shared at the end of January, there are now
risks that the ongoing conict, in the absence of a
peaceful resolution and normalization in the short
term, will have material repercussions on the Rus-
sian and Ukrainian markets, for whose assessment
we believe it is necessary to use great caution.
Nonetheless, the Group’s core business can count
on structural trends, particularly in coffee, on geo-
graphic diversication and on the strength of lead-
ing brands which, on the whole, exert a positive
balance with respect to the aforementioned critical
factors
In the words of the CEO, Massimo Garavaglia:
“2021 was a year of important results both in terms
of growth and value creation. There results not only
testify to the success of a strategy based on long-
term vision, product innovation, manufacturing ex-
cellence and continuous investments, but also en-
courage us to continue on the path we have
undertaken, convinced that we can count on struc-
tural growth trends in our “core” segments and on
the strength of our brands,
Sadly, these days we are witnessing tragic war sce-
narios that leave us deeply shocked and worried
about the possible future implications. We feel close
to all the victims of this terrible conict and in par-
ticular our priority commitment is aimed at provid-
ing the assistance necessary to ensure the safety of
our staff and their families.
These geopolitical developments lead us to prudent-
ly reconsider the contribution to sales of the two
markets involved in the crisis. Furthermore, with a
view to medium-term development, we intend to
give continuity to the investment plans in communi-
cation and in the strengthening of the organizational
and production structure already planned.”
Treviso, 10 March 2022
For the Board of Directors
Chief Executive Ocer
Massimo Garavaglia
Group
annual
report and
nancial
statements
Consolidated nancial
statements
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated statement
of nancial position
Consolidated statement of cash ows
Consolidated statement
of changes in net equity
Group annual report and nancial statements -
Consolidated nancial statements
75De’ Longhi Group
Consolidated income statement
(€/000) Notes 2021
of which operative
non-recurring
2020
of which operative
non-recurring
Revenue from contracts with customers 1 3,196,253 2,332,567
Other revenues 1 25,334 18,690
Total consolidated revenues 3,221,587 2,351,257
Raw and ancillary materials, consumables and goods 2 (1,630,172 ) (1,078,397 ) (713 )
Change in inventories of nished products and work in progress 3-8 254,836 (14,978 ) 41,191
Change in inventories of raw and ancillary materials, consumables and goods 3 46,710 26,180
Materials consumed (1,328,626 ) (14,978 ) (1,011,026 ) (713 )
Payroll costs 4-8 (385,972 ) (10,667 ) (301,042 ) (8,529 )
Services and other operating expenses 5-8-15 (997,413 ) 289 (674,140 ) (11,758 )
Provisions 6-8 (28,967 ) (5,406 ) (22,050 )
Amortization 7-15 (93,679 ) (80,993 )
EBIT 386,930 (30,762 ) 262,006 (21,000 )
Net nancial income (expenses) 9-15 13,321 (5,692 )
Prot (loss) before taxes 400,251 256,314
Taxes 10 (88,502 ) (56,181 )
Consolidated prot (loss) 311,749 200,133
Prot (loss) pertaining to minority 31 651 -
Consolidated prot (loss) after taxes 311,098 200,133
Earnings per share (in Euro) 32
- basic
€ 2.08 € 1.34
- diluted
€ 2.03 € 1.31
Appendix 3 reports the effect of related party transactions on the income statement, as required by CONSOB Resolution 15519 of 27 July 2006.
Group annual report and nancial statements -
Consolidated nancial statements
76De’ Longhi Group
Consolidated statement of comprehensive income
(€/000) 2021 2020
Consolidated prot (loss) 311,749 200,133
Other components of the comprehensive income:
- Change in fair value of cash ow hedges and nancial assets available for sale 9,605 (4,031 )
- Tax effect on change in fair value of cash ow hedges and nancial assets available for sale (2,278 ) 1,054
- Differences from translating foreign companies’ nancial statements into Euro 60,729 (47,491 )
- OCI pertaining to equity investments consolidated by equity method 184 -
Total other comprehensive income will subsequently be reclassied to prot (loss) for the year 68,240 (50,468 )
- Actuarial valuation funds 3,057 (1,911 )
- Tax effect of actuarial valuation funds (871 ) 538
Total other comprehensive income will not subsequently be reclassied to prot (loss) for the year 2,186 (1,373 )
Total components of comprehensive income 70,426 (51,841 )
Total comprehensive income 382,175 148,292
Total comprehensive income attributable to:
Group 381,491 148,292
Minority interest 684 -
Group annual report and nancial statements -
Consolidated nancial statements
77De’ Longhi Group
Consolidated statement of nancial position
ASSETS
(€/000)
Notes 31.12.2021 31.12.2020 (*)
Non-current assets
Intangible assets 867,877 686,781
- Goodwill 11 358,405 257,544
- Other intangible assets 12 509,472 429,237
Property, plant and equipment 388,478 322,764
- Land, property, plant and machinery 13 178,946 138,517
- Other tangible assets 14 135,813 120,645
- Right of use assets 15 73,719 63,602
Equity investments and other nancial assets 82,475 104,539
- Equity investments 16 7,331 30,073
- Receivables 17 4,605 4,480
- Other non-current nancial assets 18 70,539 69,986
Deferred tax assets 19 74,297 58,455
Total non-current assets 1,413,127 1,172,539
Current assets
Inventories 20 769,253 432,105
Trade receivables 21 366,668 397,337
Current tax assets 22 9,492 6,541
Other receivables 23 43,148 30,118
Current nancial receivables and assets 24-15 302,077 243,005
Cash and cash equivalents 25 1,026,081 662,947
Total current assets 2,516,719 1,772,053
Non-current assets held for sale 26 1,055 977
Total assets 3,930,901 2,945,569
(*) The gures at 31/12/2020 were restated, in accordance
with IFRS 3, following denitive recognition of the Capital
Brands business combination.
Appendix 3 reports the effect of related party transactions
on the balance sheet, as required by CONSOB Resolution
15519 of 27 July 2006.
Group annual report and nancial statements -
Consolidated nancial statements
78De’ Longhi Group
Consolidated statement of nancial position
NET EQUITY AND LIABILITIES
(€/000)
Notes 31.12.2021 31.12.2020 (*)
Net equity
Group portion of net equity 1,568,577 1,267,354
- Share Capital 29 226,344 225,823
- Reserves 30 1,031,135 841,398
- Prot (loss) pertaining to the Group 311,098 200,133
Minority interest 31 2,018 -
Total net equity 1,570,595 1,267,354
Non-current liabilities
Financial payables 681,020 507,335
- Banks loans and borrowings (long-term portion) 33 357,457 330,012
- Other nancial payables (long-term portion) 34 266,335 129,330
- Lease liabilities (long-term portion) 15 57,228 47,993
Deferred tax liabilities 19 70,070 56,440
Non-current provisions for contingencies and other charges 119,421 110,921
- Employee benets 35 53,378 51,288
- Other provisions 36 66,043 59,633
Total non-current liabilities 870,511 674,696
Current liabilities
Trade payables 37 936,229 582,193
Financial payables 292,589 240,617
- Banks loans and borrowings (short-term portion) 33 221,691 132,867
- Other nancial payables (short-term portion) 34 51,860 89,572
- Lease liabilities (short-term portion) 15 19,038 18,178
Current tax liabilities 38 120,900 66,498
Other payables 39 140,077 114,211
Total current liabilities 1,489,795 1,003,519
Total net equity and liabilities 3,930,901 2,945,569
(*) The gures at 31/12/2020 were restated, in accordance
with IFRS 3, following denitive recognition of the Capital
Brands business combination.
Appendix 3 reports the effect of related party transactions
on the balance sheet, as required by CONSOB Resolution
15519 of 27 July 2006.
Group annual report and nancial statements -
Consolidated nancial statements
79De’ Longhi Group
Notes 2021 2020 (*)
Prot (loss) pertaining to the Group 311,098 200,133
Income taxes for the period 88,502 56,181
Amortization 93,679 80,992
Net change in provisions and other non-cash items 3,576 15,603
Cash ow generated by current operations (A) 496,855 352,909
Change in assets and liabilities for the period:
Trade receivables 47,954 45,087
Inventories (312,921 ) (67,370 )
Trade payables 320,996 184,877
Other changes in net working capital 13,911 (6,785 )
Payment of income taxes (64,187 ) (41,290 )
Cash ow generated (absorbed) by movements in working capital (B) 5,753 114,519
Cash ow generated by current operations and movements in working capital (A+B) 502,608 467,428
Investment activities:
Investments in intangible assets (16,723 ) (14,652 )
Other cash ows for intangible assets 978 793
Investments in property, plant and equipment (88,373 ) (66,609 )
Other cash ows for property, plant and equipment 964 15
Investments in leased assets (30,018 ) (10,347 )
Other cash ows for leased assets 891 1,548
Net investments in nancial assets and in minority interest (54 ) (264 )
Cash ow absorbed by ordinary investment activities (C) (132,335 ) (89,516 )
Cash ow by operating activities (A+B+C) 370,273 377,912
Cash ows absorbed by the acquisition of Capital Brands (D) (98,866 ) (329,303 )
Change in currency translation reserve on cash and cash equivalents 46,112 (18,066 )
Purchase of treasury shares - (14,534 )
Exercise of stock option 7,110 21,452
Dividends paid (80,671 ) (80,477 )
New loans 450,000 200,000
Payment of interests on loans (3,923 ) (3,750 )
Repayment of loans and other net changes in sources of nance (327,552 ) (221,778 )
Changes in minority interests 651 -
Cash ow generated (absorbed) by changes in net equity and by nancing activities (E) 91,727 (117,153 )
Cash ow for the period (A+B+C+D+E) 363,134 (68,544 )
Opening cash and cash equivalents 25 662,947 731,491
Cash ow for the period (A+B+C+D+E) 363,134 (68,544 )
Closing cash and cash equivalents 25 1,026,081 662,947
Consolidated statement of cash ow
(*) The gures at 31/12/2020 were restated, in accordance
with IFRS 3, following denitive recognition of the Capital
Brands business combination.
Appendix 2 reports the statement of cash ows in terms of
net nancial position.
Group annual report and nancial statements -
Consolidated nancial statements
80De’ Longhi Group
(€/000)
Share
capital
Share
premium
reserve
Legal
reserve
Extraordi-
nary reserve
Treasury
shares
reserves
Fair value
and cash
ow hedge
reserves
Stock
option
reserve
Currency
translation
reserve
Prot
(loss)
carried
forward
Prot (loss)
pertaining to
group
Group
portion of
net equity
Minority
interest
Total net
equity
Balance at 31 December 2019 224,250 162 42,573 144,538 - (485 ) 10,078 32,433 575,900 161,005 1,190,454 - 1,190,454
Allocation of 2019 result as per AGM
resolution of 22 April 2020 and AGM
resolution of 15 December 2020
- distribution of dividends (80,813 ) (80,813 ) (80,813 )
- allocation to reserves 2,277 116,817 41,911 (161,005 ) - -
Fair value stock option 2,502 2,502 2,502
Exercise of stock option 1,573 25,676 (5,796 ) 21,453 21,453
Treasury shares purchase (14,534 ) (14,534 ) (14,534 )
Movements from transactions with
shareholders
Prot (loss) after taxes 200,133 200,133 200,133
Other components of comprehensive income (2,977 ) (47,491 ) (1,373 ) (51,841 ) (51,841 )
Comprehensive income (loss) - - - - - (2,977 ) - (47,491 ) (1,373 ) 200,133 148,292 - 148,292
Balance at 31 December 2020 225,823 25,838 44,850 180,542 (14,534 ) (3,462 ) 6,784 (15,058 ) 616,438 200,133 1,267,354 - 1,267,354
Balance at 31 December 2020 225,823 25,838 44,850 180,542 (14,534 ) (3,462 ) 6,784 (15,058 ) 616,438 200,133 1,267,354 - 1,267,354
Allocation of 2020 result as per AGM
resolution of 21 April 2021
- distribution of dividends (80,821 ) (80,821 ) (80,821 )
- allocation to reserves 318 7,571 192,244 (200,133 ) - -
Fair value stock option 3,578 3,578 3,578
Exercise of stock option 521 8,462 (1,874 ) 7,109 7,109
Recognition of minority interests (1,334 ) (1,334 ) 1,334 -
Other changes in minority interests (8,800 ) (8,800 ) (8,800 )
Movements from transactions with
shareholders
Prot (loss) after taxes 311,098 311,098 651 311,749
Other components of comprehensive income 7,327 60,696 2,370 70,393 33 70,426
Comprehensive income (loss) - - - - - 7,327 - 60,696 2,370 311,098 381,491 684 382,175
Balance at 31 December 2021 226,344 34,300 45,168 188,113 (14,534 ) 3,865 8,488 45,638 720,097 311,098 1,568,577 2,018 1,570,595
Consolidated statement of changes in net equity
Explanatory notes
Group
annual
report and
nancial
statements
Group annual report and nancial statements -
Explanatory notes
82De’ Longhi Group
E
Explanatory notes
Group business
The De’Longhi Group is headed up by the parent
oce in T reviso whose shares are listed on the Ital-
ian stock exchange Euronext Milan run by Borsa
Italiana.
Accounting standards
The De’Longhi Group’s consolidated nancial state-
ments at 31 December 2021 have been prepared
on the basis of the international accounting and -
nancial reporting standards issued by the Interna-
tional Accounting Standards Board (IASB), includ-
ing the SIC and IFRIC interpretations, as endorsed
by the European Commission (at the date of 31 De-
cember 2021), pursuant to EC Regulation 1606 of
19 July 2002.
The following documents have been used for inter-
pretation and application purposes even though
not endorsed by the European Commission:
• Framework for the Preparation and Presentation
of Financial Statements of the International Ac-
counting Standards Board (issued by the IASB in
2001);
• Implementation Guidance, Basis for Conclusions,
IFRIC and other documents issued by the IASB or
IFRIC to complement the accounting standards;
• Interpretations published by the Italian Account-
ing Board relating to how to apply IAS/IFRS in
Italy.
The accounting policies and measurement bases
used for preparing the nancial statements at 31
December 2021 are the same as those used for
preparing the consolidated nancial statements at
31 December 2020. The new amendments and ac-
counting standards, described below, had no signif-
icant impacts on the present nancial statements.
The consolidated nancial statements at 31 De-
cember 2021 comprise the income statement, the
statement of comprehensive income, the state-
ment of nancial position, the statement of cash
ows, the statement of changes in net equity and
these explanatory notes.
The statement of nancial position has been pre-
pared on a basis that distinguishes between cur-
rent and non-current items.
The income statement has been presented on the
basis of the nature of expense, being a suitable
structure for faithfully representing the Group’s
performance.
The statement of cash ows has been prepared
using the “indirect method” allowed by IAS 7.
The present nancial statements and notes are
presented in Euro, with all amounts rounded to
thousands of Euro, unless otherwise indicated.
The present annual nancial report, prepared in the
ESEF format (European Single Electronic Format),
was approved and authorized for publication by the
Board of Directors on 10 March 2022. The nancial
statements used for consolidation purposes are
the separate ones for the year ended 31 December
2021 prepared by the Boards of Directors of the in-
dividual companies, as adjusted if necessary for
the Group’s accounting policies and measurement
bases.
The nancial statements have been prepared on
the historical cost basis, adjusted as required for
the valuation of certain nancial instruments, and
under the assumption of going concern. Even
though the unpredictability of the epidemic’s poten-
tial impact is still the source of considerable uncer-
tainty, the Group, in light of the actions taken to limit
risks and its business model, as well as the good
results obtained in 2021 which conrmed the effec-
tiveness of the strategy implemented to address
the health crisis, believes that there are no ele-
ments which could compromise the business as a
going concern as per paragraph 25 of IAS 1. Fur-
thermore, at the date of this Report there are no ele-
ments, connected to the health crisis, to report that
had a direct and signicant impact on the gures in
the nancial statements.
The risks and uncertainties relating to the business
are described in a specic section of the Report on
operations.
The methods used by the Group to manage nan-
cial risks are described in note 43. Risk manage-
ment of the present Explanatory notes.
Group annual report and nancial statements -
Explanatory notes
83De’ Longhi Group
Translation of balances in foreign currencies
The following exchange rates have been used:
31.12.2021 31.12.2020 % Change
Period-end
exchange rate (*)
Average
exchange rate (*)
Period-end
exchange rate (*)
Average
exchange rate (*)
Period-end
exchange rate (*)
Average
exchange rate (*)
US dollar USD 1.1326 1.1827 1.2271 1.1422 (7.70%) 3.55%
British pound GBP 0.8403 0.8596 0.8990 0.8897 (6.53%) (3.38%)
Hong Kong dollar HKD 8.8333 9.1932 9.5142 8.8587 (7.16%) 3.78%
Chinese renminbi (Yuan) CNY 7.1947 7.6282 8.0225 7.8747 (10.32%) (3.13%)
Australian dollar AUD 1.5615 1.5749 1.5896 1.6549 (1.77%) (4.83%)
Canadian dollar CAD 1.4393 1.4826 1.5633 1.5300 (7.93%) (3.10%)
Japanese yen JPY 130.3800 129.8767 126.4900 121.8458 3.08% 6.59%
Malaysian ringgit MYR 4.7184 4.9015 4.9340 4.7959 (4.37%) 2.20%
New Zealand dollar NZD 1.6579 1.6724 1.6984 1.7561 (2.38%) (4.77%)
Polish zloty PLN 4.5969 4.5652 4.5597 4.4430 0.82% 2.75%
South African rand ZAR 18.0625 17.4766 18.0219 18.7655 0.23% (6.87%)
Singapore dollar SGD 1.5279 1.5891 1.6218 1.5742 (5.79%) 0.95%
Russian rouble RUB 85.3004 87.1527 91.4671 82.7248 (6.74%) 5.35%
Turkish lira TRY 15.2335 10.5124 9.1131 8.0547 67.16% 30.51%
Czech koruna CZK 24.8580 25.6405 26.2420 26.4551 (5.27%) (3.08%)
Swiss franc CHF 1.0331 1.0811 1.0802 1.0705 (4.36%) 0.99%
Brazilian real BRL 6.3101 6.3779 6.3735 5.8943 (0.99%) 8.20%
Croatian kuna HRK 7.5156 7.5284 7.5519 7.5384 (0.48%) (0.13%)
Ukrainian hryvnia UAH 30.9219 32.2592 34.7689 30.8506 (11.06%) 4.57%
Romanian leu RON 4.9490 4.9215 4.8683 4.8383 1.66% 1.72%
South Korean won KRW 1,346.3800 1,354.0600 1,336.0000 1,345.5800 0.78% 0.63%
Chilean peso CLP 964.3500 898.3900 872.5200 903.1400 10.52% (0.53%)
Hungarian forint HUF 369.1900 358.5161 363.8900 351.2494 1.46% 2.07%
Swedish krona SEK 10.2503 10.1465 10.0343 10.4848 2.15% (3.23%)
Mexican peso MXN 23.1438 23.9852 24.4160 24.5194 (5.21%) (2.18%)
(*) Source: Bank of Italy.
International accounting standards adopted
by the Group for the rst time
A few amendments were applicable for the rst
time as of 1 January 2021 which did not have a ma-
terial impact on the Group’s report.
The Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4
and IFRS 16 Interest Rate Benchmark Reform -
Phase 2, endorsed on 13 January 2021 relate to the
effect that the interest rate benchmark reform and
its substitution with alternative benchmark rates
could have on nancial reporting.
The Amendments to IFRS 4 - Insurance contracts -
deferral of IFRS 9, endorsed on 15 December 2020,
which allow insurance companies to defer applica-
tion of IFRS 9, are not relevant for the Group.
With Regulation 1424/2021 of 30 August 2021 the
European Commission endorsed the document
issued by IASB, Covid-19-Related Rent Conces-
sions beyond 30 June 2021 (Amendments to IFRS
16) which extends the period of application of the
amendment to IFRS 16 issued in 2020. The amend-
ment introduced a practical expedient which sim-
plies the accounting of any concessions on
leases, like the temporary discounts or exemptions
from payments, received by tenants during the pan-
demic. The amendment took effect as of 1 April
2021 and did not have any impact on the Group’s
nancial statements.
International nancial reporting standards
and/or interpretations not yet applicable
On 14 May 2020 IASB published amendments, ef-
fective as of 1 January 2022, relating to several
standards, namely Amendments to IFRS 3 Busi-
ness Combinations, Amendments to IAS 16 Prop-
erty, Plant and Equipment, Amendments to IAS 37
Provisions, Contingent Liabilities and Contingent
Assets.
Group annual report and nancial statements -
Explanatory notes
84De’ Longhi Group
As part of the annual improvements, changes were
also made to IFRS 1 - First-time Adoption of Inter-
national Financial Reporting Standards, IFRS 9 - Fi-
nancial Instruments, IAS 41 - Agriculture and the il-
lustrative examples accompanying IFRS 16
- Leases.
With Regulation 2036/2021 of 19 November 2021
the European Commission adopted IFRS 17 - Insur-
ance contracts which will substitute the current
IFRS 4. The new standard establishes rules for the
recognition, measurement, presentation and dis-
closure of insurance contracts; it will be applied to
all insurance contracts using an accounting model
based on the discounted cash ow method, adjust-
ed for risk, and a Contractual Service Margin (CSM).
The new standard will be applicable as from 1 Jan-
uary 2023.
In February 2021 IFRS: Denition of Accounting Es-
timates - Amendments to IAS 8 and Disclosure of
Accounting Policies - Amendments to IAS 1 and
IFRS Practice Statement 2, applicable as of 1 Janu-
ary 2023, were issued. The purpose of these
amendments is to improve the disclosure of ac-
counting policies in order to provide investors and
other primary users of the nancial statements
with more useful information, as well as help com-
panies distinguish between the changes in ac-
counting estimates from changes in the account-
ing policy.
On 7 May 2021 IASB published Deferred Tax related
to Assets and Liabilities arising from a Single
Transaction - Amendments to IAS 12 which speci-
es how deferred tax in relation to leases and de-
commissioning obligations should be accounted
for. The amendments are effective for annual re-
porting periods beginning on or after 1 January
2023. Early adoption is permitted.
The date for rst time application of the Amend-
ments to IFRS 10 and IAS 28 - Sale or Contribution
of Assets between an Investor and its Associate or
Joint Venture has yet to be determined. The pur-
pose of the amendments is to clarify how to ac-
count for the loss of control of a business (gov-
erned by IFRS 10), as well as downstream
transactions (governed by IAS 28) if the object of
the transaction was or was not a business, as de-
ned in IFRS 3.
Consolidation procedures
The scope of consolidation includes the parent
company, De’Longhi S.p.A., and its subsidiaries at
31 December 2021, meaning those companies in
which the parent directly or indirectly owns the ma-
jority of share capital or shares with voting rights,
or over which the parent has the power, including
through contractual agreements, to govern their -
nancial and operating policies.
Subsidiary companies
These are companies over which the Group exer-
cises control. Such control exists when the Group
has the power, directly or indirectly, to govern the -
nancial and operating policies of an enterprise so
as to obtain benets from its activities. The nan-
cial statements of subsidiaries are consolidated
starting from the date that control is assumed with
the line-by-line method.
The portion of equity and results attributable to mi-
nority shareholders is shown separately in the con-
solidated statement of nancial position and
income statement respectively.
The Group established that a transaction is to be
considered a business combination if the assets
acquired and the liabilities assumed constitute a
business, namely an integrated set of activities and
assets that is capable of being conducted and
managed for the purpose of providing goods or
services to customers, generating investment
income (such as dividends or interest) or generat-
ing other income from ordinary activities. A busi-
ness must include at least one input and a substan-
tive process that together signicantly contribute
to the ability to create output.
In accordance with IFRS 3, business combinations
are accounted for using the purchase method.
Under this method, the consideration transferred
for the acquisition is measured at fair value except
for the following items which are measured in ac-
cordance with the applicable standard: i) deferred
tax assets and liabilities, ii) assets and liabilities for
employee benets and iii) assets held for sale. In
the case in which it is only possible to estimate pro-
visionally the fair value of assets, liabilities and po-
tential liabilities, the business combination is ac-
counted for on the basis of provisional estimated
values. Any subsequent corrections required fol-
lowing completion of the valuation process are ac-
counted for within 12 months of the acquisition
date.
If an element of the consideration depends on the
outcome of future events, such element is included
in the estimate of fair value at the time of the busi-
ness combination.
In the case of business combinations carried out in
more than one phase, (step acquisitions) the value
of the non-controlling interest will be restated
based on the fair value of the assets at the time of
the transactions and any related gain or loss will
recognized in prot (loss) for the year.
The acquisition of further shares in subsidiaries
and any sale of shares which do not lead to loss of
control are accounted for as transactions between
shareholders; as such, the accounting effects of
such operations are reected directly in the Group
equity.
Associated companies
These are companies in which the Group has a sig-
nicant inuence over their nancial and operating
policies and which are neither subsidiaries nor joint
ventures. The consolidated nancial statements
show the Group’s portion of results of the associat-
ed companies, accounted for using the equity
method, starting from the date when the signicant
inuence began.
Joint ventures
These are companies over whose activities the
Group has joint control, as established by contract.
The consolidated nancial statements include the
Group’s share of the results of joint ventures, re-
ported using the equity method as per IAS 28 - In-
vestment in associates and joint ventures
amended.
Consolidation of foreign companies
All the assets and liabilities of foreign companies
that report in a currency other than the Euro and
which fall within the scope of consolidation are
translated into Euro using the exchange rate ruling
at the end of the reporting period (current exchange
rate method). Income and costs are translated
using average rates for the reporting period. The
exchange differences arising from this method are
booked directly to the “currency translation reserve”
under consolidated net equity.
Transactions eliminated upon consolidation
All transactions and balances between Group com-
panies and all unrealized gains and losses arising
on intercompany transactions are eliminated on
consolidation.
Group annual report and nancial statements -
Explanatory notes
85De’ Longhi Group
Transactions in foreign currency
Transactions in foreign currency are recorded at
the exchange rate in force on the transaction date.
Monetary assets and liabilities in foreign currency
are translated using the exchange rate ruling on the
reporting date. Exchange differences arising on the
extinguishment of monetary items or their transla-
tion at different rates to those used for their transla-
tion upon initial recognition or in previous nancial
statements are recorded in the income statement.
Exchange differences arising on monetary items
that are effectively part of the Group’s net invest-
ment in foreign operations are classied in net
equity until the investment’s disposal, at which time
such differences are recognized in the income
statement as income or expenses.
Restatement of comparison gures
In accordance with IFRS 3 - Business combina-
tions, at the end of the measurement period the
denitive accounting of the business combinations
relative to Capital Brands and Everysys, completed
on 29 December 2020 and 1 April 2021, respective-
ly, was recognized.
In the prior accounting documents, it was only pos-
sible to determine the temporary fair value at the
acquisition date of the assets, liabilities and contin-
gent liabilities.
During the measurement period, including in light
of the estimates of the independent appraiser, the
information needed to identify and assess the de-
nitive value of the assets, liabilities and, conse-
quently, goodwill was gathered.
The comparison gures provided in the statement
of nancial position 31 December 2020 were re-
stated to reect the latest valuations of Capital
Brands, acquired on 29 December 2020.
No income statement gures were restated.
The details of the restated gures are provided
below:
Ocial gures
Effects deriving from the
denitive accounting PPA Capital
Brands
Restated gures
Assets 2,882,751 62,818 2,945,569
Non-current assets 1,117,095 55,444 1,172,539
Goodwill 398,514 (140,970) 257,544
Other intangible assets 233,352 195,885 429,237
Tangible assets 323,658 (894) 322,764
Equity investments and other nancial assets 104,539 - 104,539
Deferred tax assets 57,032 1,423 58,455
Current assets 1,764,679 7,374 1,772,053
Inventories 423,977 8,128 432,105
Trade receivables 398,054 (717) 397,337
Current tax assets 6,541 - 6,541
Other receivables 30,155 (37) 30,118
Current nancial receivables and assets 243,005 - 243,005
Cash and cash equivalents 662,947 - 662,947
Non-current assets held for sales 977 - 977
Net equity and liabilities 2,882,751 62,818 2,945,569
Net equity 1,267,354 - 1,267,354
Non-current liabilities 616,216 58,480 674,696
Financial payables 507,335 - 507,335
Deferred tax liabilities 9,235 47,205 56,440
Non-current provisions for contingencies and other
charges
99,646 11,275 110,921
Current liabilities 999,181 4,338 1,003,519
Trade payables 581,860 333 582,193
Financial payables 236,612 4,005 240,617
Current tax liabilities 66,498 - 66,498
Other payables 114,211 - 114,211
Group annual report and nancial statements -
Explanatory notes
86De’ Longhi Group
Change in the scope of consolidation - Business combinations
Capital Brands
The acquisition of Capital Brands Holding Inc. was nalized on 29 December 2020; for more information
refer to the 2020 Annual Report.
As the assets acquired and the liabilities assumed constitute the acquisition of a business, the transaction
is considered a business combination pursuant to IFRS 3.
The parties, having agreed on an adjusted purchase price, set the consideration for the acquisition at USD
354.8 million (equity value).
During the year the business combination was denitively accounted for in accordance with IFRS 3 - Busi-
ness combination.
The temporary allocation of the purchase price to the assets and liabilities acquired as a result of the trans-
action is summarized below:
Values in $/000 Values in €/000
Total value of the transaction 354,850 289,403
Fair value of assets acquired 152,479 124,259
Goodwill 202,371 165,144
The denitive value of the assets and liabilities acquired as a result of the business combination is summa-
rized below:
Denitive fair value of
assets and liabilities
acquired as a result of the
business combination
($/000)
Denitive fair value of
assets and liabilities
acquired as a result of the
business combination
(€/000)
Trademark 132,600 108,060
Other intangible assets 123,758 100,854
Tangible assets 6,796 5,538
Financial assets 1,004 818
Deferred tax assets 6,780 5,525
Trade receivables 42,841 34,912
Inventories 41,466 33,792
Other current assets 1,022 833
Cash and cash equivalents 22,188 18,082
Total assets 378,455 308,414
Trade payables 58,163 47,399
Other current liabilities 12,568 10,242
Financial payables 76,063 61,986
Provisions for contingencies and other charges 79,182 64,528
Total liabilities 225,976 184,155
Net assets 152,479 124,259
Acquired share (100%) 152,479 124,259
Group annual report and nancial statements -
Explanatory notes
87De’ Longhi Group
Eversys
On 22 March 2021, De’Longhi announced that it had reached an agreement to take over the remaining 60%
stake and obtain full control of Eversys, a Swiss group active in the design and marketing of professional
espresso machines, with a specic focus on fully automatic machines for which it has developed a highly
innovative technology which ensures premium brand positioning in its sector.
The Eversys Group includes the holding, Eversys Holding S.A., and a few subsidiaries active mainly in
Europe, the United States and Canada.
The price paid for the 60% stake was set at CHF 110 million.
As the assets acquired and the liabilities assumed constitute the acquisition of a business, the transaction
is considered a business combination pursuant to IFRS 3.
Given that business combination was made in stages, the value of the non-controlling interest already held
by the Group was redetermined taking into account the fair value of the net assets acquired at the date of
the transaction as calculated by an independent appraiser. Based on this appraisal, a gain of €25,328 thou-
sand was recognized as nancial income in the reporting period.
The Eversys gures were consolidated using the line-by-line method as of 1 April 2021 based on the most
recent interim nancial statements available.
During the year the denitive accounting of the business combination was recognized in accordance with
IFRS 3 - Business combinations.
The temporary allocation of the purchase price to the assets and liabilities acquired as a result of the trans-
action is summarized below:
CHF/000 amounts €/000 amounts
Total value of acquired assets 160,066 145,378
Fair value of acquired net assets 69,849 63,098
Goodwill 90,217 82,280
The denitive value of the assets and liabilities acquired as a result of the business combination is summa-
rized below:
Denitive fair value of
assets and liabilities
acquired as a result of the
business combination
(CHF/000)
Denitive fair value of
assets and liabilities
acquired as a result of the
business combination
(€/000)
Trademark 36,300 32,791
Patent 34,000 30,714
Other non-current assets 17,207 15,544
Trade receivables 11,080 10,009
Inventories 17,802 16,081
Other current assets 2,344 2,117
Cash and cash equivalents 5,574 5,035
Total assets 124,306 112,291
Trade payables 2,407 2,174
Other current liabilities 3,037 2,743
Financial payables 31,856 28,777
Provisions for contingencies and other charges 17,157 15,499
Total liabilities 54,457 49,193
Net assets 69,849 63,098
Acquired share (100%) 69,849 63,098
Disclosure by operating segments
Please refer to Note 46. Operating segments.
The report on operations contains comments on the economic results by geographical area.
Group annual report and nancial statements -
Explanatory notes
88De’ Longhi Group
Main accounting policies
Intangible assets
Goodwill
Business combinations, whereby control of a com-
pany/entity is acquired, are accounted for in ac-
cordance with the purchase method, meaning that
the assets and liabilities acquired are initially meas-
ured at their market value on the acquisition date.
The difference between the cost of acquisition and
the Group’s share of net assets acquired is attribut-
ed to specic assets and liabilities to the extent of
their acquisition date fair value; any remaining dif-
ference is allocated to goodwill, if positive, and to
the income statement if negative. The cost of ac-
quisition is determined on the basis of the acquisi-
tion date fair value of the assets transferred, the lia-
bilities assumed, the equity instruments issued and
any other related amount.
Goodwill is not amortized but tested for impair-
ment once a year or more often if specic events or
changed circumstances indicate that its value may
have been impaired. This procedure is in accord-
ance with IAS 36 - Impairment of assets. After ini-
tial recognition, goodwill is carried at cost less any
accumulated impairment losses.
Research and development costs
Developments costs for the production of new prod-
ucts or parts are recognized as assets only if the
costs can be reliably determined, the Group has the
intention and resources to complete them, the tech-
nical feasibility of completing them is such that they
will be available for use, and the expected volumes
and prices indicate that the costs incurred for devel-
opment will generate future economic benets.
Capitalized development costs include only those
expenses that can be directly attributed to the de-
velopment process.
Capitalized development costs are amortized on a
systematic basis, starting from the commencement
of production and lasting the length of the product or
process’s estimated life, generally ranging between
three and ve years. All other development costs are
expensed to the income statement as incurred.
Research costs are also expensed to the income
statement as incurred.
Trademarks
These are costs of long-term benet incurred for
the protection and dissemination of the Group’s
trademarks. Such costs are recognized as an asset
when, in accordance with IAS 38 - Intangible assets,
it is probable that the future economic benets at-
tributable to the asset’s use will ow to the Group
and when its cost can be reliably measured.
These assets are valued at purchase or production
cost and amortized, if they have a nite life, on a
straight-line basis over their estimated useful life,
generally between 10 and 20 years.
Trademarks with an indenite useful life are not
amortized but tested for impairment once a year or
more often, any time there are signs that their value
might be impaired.
Other intangible assets
Other intangible assets purchased or internally
generated are recognized as assets in accordance
with IAS 38 - Intangible assets, when it is probable
that the future economic benets attributable to
their use will ow to the Group and when the cost
of the asset can be reliably measured.
These assets are valued at purchase or production
cost and amortized, if they have a nite life, on a
straight-line basis over their estimated useful life,
generally between 10 and 20 years.
Property, plant and equipment
Land, property, plant and machinery
Buildings, plant and equipment owned by the Group
are recorded at purchase or production cost and
systematically depreciated over their residual
useful lives. The land pertaining to buildings is not
depreciated. The cost of assets qualifying for capi-
talization also includes the borrowing costs directly
attributable to the acquisition, construction or pro-
duction of the asset itself.
Subsequent expenditure is capitalized only if it in-
creases the future economic benets owing to the
enterprise.
Ordinary and/or routine maintenance and repair
costs are directly expensed to the income state-
ment when incurred. Costs relating to the expan-
sion, modernization or improvement of owned or
leased assets are capitalized to the extent that they
qualify for separate classication as an asset or
part of an asset under the component approach,
whereby every component whose useful life and
related value can be autonomously assessed must
be treated individually.
All other costs are expensed to income as
incurred.
The useful lives, estimated by the Group for its vari-
ous categories of property, plant and equipment,
are as follows:
Industrial buildings 10 - 33 years
Plant and machinery 5 - 18 years
Industrial and commercial
equipment
3 - 5 years
Other 3-10 years
Right-of-use assets
In accordance with IFRS 16 the right-of-use asset is
valued as the present value of future payments
(discounted at the interest rate implicit in the lease,
if easily determined, or alternatively, at the incre-
mental borrowing rate, namely the interest rate that
the lessee must pay over the term of the loan and
similar guarantees), the initial costs incurred direct-
ly by the lessee, any advance lease payments made
and the estimate of the costs for elimination, re-
moval and restoration. The asset value is system-
atically depreciated.
Impairment of non-nancial assets
The Group tests, at least once a year, whether the
book value of intangible assets and property, plant
and equipment reported in the nancial statements
has suffered any impairment loss. If there is evi-
dence of impairment, book value is written down to
the related recoverable amount.
If it is not possible to estimate the recoverable
amount of an individual asset, the Group assesses
whether the cash-generating unit to which it be-
longs is impaired.
In the case of goodwill and other intangible assets
with indenite useful lives, the impairment test
must be carried out at least once a year, and when-
ever there is an indication that an intangible asset
may be impaired.
Net assets held for sale and Discontinued Op-
erations
Net assets and disposal groups are classied as
held for sale or Discontinued Operations if their car-
rying amounts will be recovered principally through
a sale transaction rather than through continuing
use.
Group annual report and nancial statements -
Explanatory notes
89De’ Longhi Group
This condition is regarded as met only when the
sale is highly probable and the non‐current asset
(or disposal group) is available for immediate sale
in its present condition.
When the Group is committed to a sale plan involv-
ing loss of control of a subsidiary, all of the assets
and liabilities of that subsidiary are classied as
held for sale when the criteria described above are
met, regardless of whether the Group will retain a
non‐controlling interest in its former subsidiary
after the sale.
Net assets and disposal groups classied as held
for sale are measured at the lower of their carrying
amounts and fair value less costs to sell.
Inventories
Inventories of raw materials, semi-nished and n-
ished products are valued at the lower of cost and
market value. Cost is determined using the weight-
ed average cost method. The valuation of invento-
ries includes the direct cost of materials and labour
as well as indirect (variable and xed) costs. Allow-
ances for obsolete and slow-moving goods are cal-
culated for materials and nished products, taking
account of their future expected use and realizable
value.
Financial instruments
Financial assets
Upon initial recognition, nancial assets are classi-
ed based on the measurement methods used in
one of the three categories found in IFRS 9. The
classication depends on the nature of the contrac-
tual cash ows and the business model the com-
pany uses to manage them.
The business model refers to the way in which the
cash ows are generated which can be from the
collection of contractual cash ows, the sale of
assets or both.
A nancial asset is classied among the assets
valued at amortized cost if held as part of a busi-
ness model where the objective is collecting con-
tractual cash ows represented solely by payments
to be made on certain dates, principal and interest.
The valuation is made based on the effective inter-
est rate.
A nancial asset is classied among the assets
valued at fair value with changes passing through
the comprehensive income statement if held as
part of a business model where the objective is col-
lecting contractual cash ows and selling the
assets and the cash ows contemplated under the
contract refer solely to payments of principal and
interest made on predetermined dates. For the
assets included in this category, the interest receiv-
able, the foreign exchange differences and losses
in value are recognized in the income statement for
the reporting period; other changes in fair value are
recognized in the comprehensive income state-
ment. Upon elimination, the cumulative change in
fair value recognized as other comprehensive
income is released to the income statement.
During the initial recognition phase, equity instru-
ments may be included in the category of assets
measured at fair value with changes recognized in
the comprehensive income statement.
The category of assets valued at fair value with
changes recognized in the income statement in-
clude assets held for trading, namely acquired to be
sold in the short-term, and the assets designated
as such.
Upon initial recognition, equity instruments not
held for trading may be included in the category of
nancial instruments measured at fair value with
changes recognized in the comprehensive income
statement. This choice may be made for each
asset and is irrevocable.
The trade receivables without a signicant nanc-
ing component are valued at the transaction price
determined in accordance with IFRS 15.
Financial liabilities
Financial liabilities refer mainly to loans valued at
amortized cost based on the effective interest rate.
Financial liabilities are derecognized when the un-
derlying obligation is extinguished, cancelled or
fullled.
Lease liabilities
Lease liabilities equal the present value of the pay-
ments payable and not yet paid at the date of the
nancial statements discounted at the interest rate
implicit in the lease, if easily determined, or alterna-
tively, at the incremental borrowing rate which is
the rate that the lessee would pay on a loan with a
similar duration and conditions. In the event the
lease term, purchase options, the residual value
guaranteed, or variable payments based on indices
or rates, are redetermined, the lease liability is
remeasured.
Derivatives
Derivatives are used solely for hedging purposes, in
order to reduce exposures to currency and interest
rate risk. As allowed by IFRS 9, derivatives may
qualify for special hedge accounting only when, at
the inception of the hedge, the following conditions
are satised:
• there is a formal designation that the instrument
is a hedging one;
• there is formal documentation of the hedging re-
lationship, which is expected to be highly
effective;
• the effectiveness of the hedge can be reliably
measured;
• the hedge is highly effective throughout the dif-
ferent nancial reporting periods for which it was
designated.
In accordance with IFRS 9, all derivatives are meas-
ured at fair value.
If nancial instruments qualify for hedge account-
ing, the following treatment applies:
Fair value hedge - If a derivative instrument is des-
ignated as a hedge of the exposure to changes in
the fair value of a recognized asset or liability that is
attributable to a particular risk that will affect prot
or loss, the gain or loss from remeasuring the hedg-
ing instrument at fair value should be recognized in
the income statement. The gain or loss on the
hedged item attributable to the hedged risk adjusts
the carrying amount of the hedged item and is rec-
ognized in the income statement.
Cash ow hedge - If a derivative instrument is des-
ignated as a hedge of the exposure to variability in
cash ows attributable to a highly probable fore-
casted transaction which could affect prot or loss,
the effective portion of the gains or losses on the
hedging instrument is recognized directly in the
statement of comprehensive income. The effective
portion of the cumulative gains or losses is re-
versed from net equity and reclassied to prot or
loss in the same period in which the hedged trans-
action is reported in the income statement. Gains
or losses associated with a hedge or part thereof
that has become ineffective are reclassied to the
income statement. If a hedging instrument or
hedging relationship is terminated, but the transac-
tion being hedged has not yet occurred, the cumu-
lative gains and losses, recorded up until then in the
Group annual report and nancial statements -
Explanatory notes
90De’ Longhi Group
statement of comprehensive income, are reported
in the income statement at the same time that the
hedged transaction occurs. If the hedged transac-
tion is no longer expected to occur, the unrealized
gains or losses reported directly in net equity are
immediately reclassied to the income statement.
If hedge accounting cannot be applied, the gains or
losses arising from the fair value measurement of
the derivatives are transferred immediately to the
income statement.
Net investment hedge - Hedges of a net invest-
ment in a foreign operation, including a hedge of a
monetary item that is accounted for as part of the
net investment, are accounted for in a way similar
to cash ow hedges. Gains or losses on the hedg-
ing instrument relating to the effective portion of
the hedge are recognized in the statement of com-
prehensive income, while any gains or losses relat-
ing to the ineffective portion are recognized in the
statement of prot or loss. On disposal of the for-
eign operation, the cumulative value of any such
gains or losses recorded in equity is transferred to
the statement of prot or loss.
Factoring of trade receivables
The Group factors some of its trade receivables.
Trade receivables factored without recourse, result-
ing in the substantial transfer of the related risks
and rewards, are derecognized from the nancial
statements at the time of their transfer. Receiva-
bles whose factoring does not result in the sub-
stantial transfer of the related risks and rewards,
are retained in the statement of nancial position.
The Group has entered a ve-year agreement for
the factoring of trade receivables, involving the re-
volving monthly transfer of a portfolio of trade re-
ceivables without recourse.
The receivables are assigned without recourse to a
bank, which then transfers them to a special pur-
pose entity which nances the purchase of the re-
ceivables by a deposit guaranteed by the receiva-
bles themselves; the repayment of these securities,
placed on the market and all subscribed by institu-
tional investors, as well as the related interest, de-
pends on the cash ow generated by the portfolio
of securitized receivables.
The Group underwrites a limited number of securi-
ties without, however, prejudice to the ability to
derecognize receivables.
Receivables are sold at their face value, less a dis-
count that reects credit risk and the transaction’s
nancial costs. The Group acts as servicer for the
special purpose entity.
The contractual terms of this operation involve the
substantial transfer of the risks and rewards relat-
ing to the securitized receivables and their conse-
quent derecognition from the trade receivables
amount.
Employee benets
Pension and other incentive plans
Net obligations relating to employee benet plans,
chiey the provision for severance indemnities (for
the portion retained in Group companies) and pen-
sion funds, are recorded at the expected future
value of the benets that will be received and which
have accrued at the reporting date. The Group’s ob-
ligation to nance dened benet pension funds
and the annual cost reported in the income state-
ment are determined by independent actuaries
using the projected unit credit method.
Equity based compensation
The Group grants additional benets to the Chief
Executive Ocer, a limited number of executives
and key resources under the form of stock options.
Based on IFRS 2 Share-based payment, the current
value of the stock option determined on the grant
date is recognized on a straight-line basis in the
income statement as a payroll cost in the period
between the grant date and the date on which the
rights granted to employees, executives and others
who routinely provide services to one or more
Group companies parties fully vest, with a corre-
sponding increase in equity.
At each reporting date the Group will revise esti-
mates based on the number of options that are ex-
pected to vest, independent of the fair value of the
shares. Any differences with respect to the original
estimates will be recognized in the consolidated
income statement with a corresponding increase in
equity.
Once the stock option is exercised, the amounts re-
ceived by the employee, net of transactions costs,
will be added to the share capital in the amount of
the nominal value of the shares issued. The re-
mainder will be recognized in the share premium
reserve.
The fair value of the stock options is determined
using the Black-Scholes model which takes into
account the conditions for the exercise of the right,
the current share price, expected volatility, a risk
free interest rate, as well as the non-vesting
conditions.
The fair value of the stock options is included
within the Stock option Reserve.
The dilutive effect of unexercised options will be
reected in the calculation of the diluted earnings
per share.
Provisions for contingencies and other charges
The Group recognizes provisions for contingencies
and charges when (i) it has a present obligation
(legal or constructive) to third parties (ii) it is proba-
ble that the Group will need to employ resources to
settle the obligation and (iii) a reliable estimate can
be made of the amount of the obligation. Changes
in these estimates are reected in the income
statement in the period in which they occur (also
see the comments in the paragraph on “Estimates
and assumptions”).
Where the effect of the time value of money is ma-
terial and the date of extinguishing the liability can
be reasonably estimated, provisions are stated at
the present value of the expected expenditure,
using a discount rate that reects current market
assessments of the time value of money and the
risks specic to the liability. An increase in the
amount of the provision for the time value of
money is accounted for in interest expense. Contin-
gencies for which the probability of a liability is not
probable but neither remote are disclosed in the
notes but no provision is recognized.
Recognition of revenues
The item “Revenues” includes the consideration re-
ceived for goods sold to customers and services
rendered.
Revenues represent the consideration owed in ex-
change for the transfer of goods and/or services to
the customer, excluding amounts received on
behalf of third parties. The Group recognizes the
revenue when contractual obligations are fullled,
namely when control of the good or service is
transferred to the customer.
Based on the ve-step model introduced in IFRS 15,
the Group recognizes revenue after the following
requirements have been met:
a. the parties have approved the contract (in writ-
ing, orally or in accordance with other common
commercial practices) and are committed to
Group annual report and nancial statements -
Explanatory notes
91De’ Longhi Group
fullling the respective performance obliga-
tions; an agreement between the parties which
creates rights and obligations regardless of the
form of the agreement has, therefore, been
created;
b. the rights of each of the parties in relation to the
goods and services to be transferred can be
identied;
c. the payment terms for the goods or services to
be transferred can be identied;
d. the contract has commercial substance;
e. it is probable that the company will receive the
consideration to which it is entitled in exchange
for the goods or services transferred to the
customer.
If the consideration referred to in the contract has a
variable component, the Group will estimate the
amount of the consideration it will be entitled to in
exchange for the goods or services transferred to
the customer.
The Group typically provides warranties for the
repair of defects existing at the time of the sale, in
accordance with the law. These warranties, which
are standard warranties on quality, are accounted
for in accordance with IAS 37 - Provisions, Contin-
gent Liabilities and Contingent Assets.
Costs and expenses
Costs and expenses are accounted for on an accru-
al basis.
Dividends
Dividend distributions represent a movement in net
equity in the period in which they are declared by
the shareholders in general meeting.
Dividends received are reported when the Group is
entitled to receive the payment.
Income taxes
Income taxes include all the taxes calculated on the
Group’s taxable income. Income taxes are recorded
in the income statement, except for those relating
to items directly debited or credited to net equity, in
which case the associated tax is recognized in the
other comprehensive income.
Deferred taxes are provided on the basis of global
provision for the liability. They are calculated on all
the temporary differences emerging between the
tax base of an asset or liability and their book value
in the consolidated nancial statements, except for
goodwill whose amortization cannot be deducted
for tax purposes and those differences arising from
investments in subsidiaries which are not expected
to reverse in the foreseeable future. Deferred tax
assets on the carryforward of unused tax losses
and tax credits are recognized to the extent that it is
probable that future taxable prot will be available
against which these can be recovered. Current and
deferred tax assets and liabilities may be offset
when the income taxes are charged by the same
tax authority and when there is a legal right of set-
off. Deferred tax assets and liabilities are calculat-
ed at the tax rates that are expected to apply to the
period when the asset is realized or the liability set-
tled, based on tax rates and laws applying in the
countries where the Group operates.
Deferred taxes on reserves of distributable earn-
ings in subsidiaries are recognized only if it is prob-
able that such reserves will be distributed.
Any uncertaintiy regarding tax treatments is con-
sidered in the tax calculation in accordance with
the recommendations of IFRIC 23 Uncertainty over
Income Tax Treatments.
Earnings per share
Basic earnings per share are calculated by dividing
the earnings for the year payable to the parent
company’s ordinary shareholders by the weighted
average number of ordinary shares outstanding
during the period.
The diluted earnings per share are calculated by di-
viding the earnings for the year payable to the
parent company’s ordinary shareholders by the
weighted average number of ordinary shares out-
standing during the period and the shares poten-
tially issued following the exercise of assigned
stock options.
Estimates and assumptions
These nancial statements, prepared in accord-
ance with IFRS, contain estimates and assump-
tions made by the Group relating to assets and lia-
bilities, costs, revenues and contingent liabilities at
the reporting date. These estimates are based on
past experience and assumptions considered to be
reasonable and realistic, based on the information
available at the time of making the estimate.
The assumptions relating to these estimates are
periodically reviewed and the related effects re-
ected in the income statement in the same period:
actual results could therefore differ from these
estimates.
The following paragraphs discuss the principal as-
sumptions used for estimation purposes and the
principal sources of uncertainty, that have a risk of
causing material adjustment to the book value of
assets and liabilities in the future; details of book
value can be found in the individual explanatory
notes.
Allowance for doubtful accounts
The allowance for doubtful accounts reects estimat-
ed losses on trade receivables recognized in the -
nancial statements and not covered by insurance.
The losses equal the difference between the amounts
the Group is entitled to receive based on contracts
with customers and the estimated inows.
Changes in the economic environment could cause
the performance of some of the Group’s customers
to deteriorate, with an impact on the recoverability
of the uninsured portion of trade receivables.
Recoverable amount of non-current assets
The Group reviews all its non-nancial assets at
every reporting date for any evidence of impair-
ment. Goodwill and other intangible assets with an
indenite useful life are tested annually for impair-
ment. The recoverable amount of non-current
assets is usually determined with reference to
value in use, being the present value of the future
cash ows expected from an asset’s continuing
use. The forecast cash ows are determined based
on the information available when estimated based
on the opinion of the directors regarding the future
performance of certain variables - such as prices
and the subsequent revenues, costs, increase in
demand, production ows - which are discounted
at a risk-adjusted rate.
The test also involves selecting a suitable discount
rate for calculating the present value of the expect-
ed cash ows.
Employee benets
The cost of dened benet pension plans is deter-
mined using actuarial valuations, based on statisti-
cal assumptions regarding discount rates, expect-
ed returns on investments, future salary growth
and mortality rates.
Group annual report and nancial statements -
Explanatory notes
92De’ Longhi Group
The Group believes the rates estimated by its actu-
aries to be reasonable for the year-end valuations,
but cannot rule out that large future changes in
rates could have a material impact on the liabilities
recognized in the nancial statements.
Deferred tax assets recoverability
Deferred tax assets include those relating to carry-
forward tax losses to the extent that there is likely
to be sucient future taxable prot against which
such losses can be recovered.
Management must use their discretion when deter-
mining the amount of deferred tax assets for rec-
ognition in the nancial statements. They must es-
timate the likely timing of reversal and the amount
of future taxable prot, as well as the future tax
planning strategy.
Provisions for contingencies
The Group makes several provisions against dis-
putes or risks of various kinds relating to different
matters falling under the jurisdiction of different
countries. The determination, probability and quan-
tication of these liabilities involve estimation pro-
cesses that are often very complex, for which man-
agement uses all the available information at the
date of preparing the nancial statements, includ-
ing with the support of legal and tax advisors.
Product warranty provisions
The Group makes provisions for the estimated cost
of product warranties. Management establishes
the amount of these provisions on the basis of past
trends relating to the frequency and average cost
of under-warranty repairs and replacement.
Group annual report and nancial statements -
Explanatory notes
93De’ Longhi Group
C
Comments on the
income statement
1
1. Revenues
In 2021 revenues, including revenues from sales
and services and other revenues, amount to
3,221,587 thousand (€2,351,257 thousand in
2020).
Revenues are broken down by geographical area as
follows:
2021 % revenues
2021 on
like-for-like
basis
% revenues 2020 % revenues Change Change %
Europe 2,076,291 64.4% 2,032,965 69.6% 1,628,449 69.3% 404,516 24.8%
Americas 562,751 17.5% 346,466 11.8% 266,868 11.3% 79,598 29.8%
Asia Pacic 400,277 12.4% 367,683 12.6% 333,472 14.2% 34,211 10.3%
MEIA (Middle East/India/
Africa)
182,268 5.7% 175,014 6.0% 122,468 5.2% 52,546 42.9%
Total 3,221,587 100.0% 2,922,128 100.0% 2,351,257 100.0% 570,871 24.3%
1 With reference to income statement values, changes are
reported on like-for-like basis, namely excluding the balanc-
es pertaining to Capital Brands and Eversys.
Comments on the most signicant changes can be found in the “Markets” section of the report on
operations.
“Other revenues” is broken down as follows:
2021
2021 on
like-for-like
basis
2020 Change
Freight reimbursement 4,796 4,389 3,335 1,054
Commercial rights 2,375 1,871 1,534 337
Grants and contributions 1,329 1,329 1,312 17
Damages reimbursed 35 35 472 (437)
Out-of-period gains 12 12 99 (87)
Other income 16,787 12,691 11,938 753
Total 25,334 20,327 18,690 1,637
With regard to Law n. 124 of 4 August 2017, which regulates transparency in public funding, the item “Grants
and contributions” includes income of €342 thousand stemming from the incentives granted by Gestore dei
Servizi Energetici GSE S.p.A. for the production of energy at the Mignagola (TV) plant through photovoltaic
systems connected to the grid.
Group annual report and nancial statements -
Explanatory notes
94De’ Longhi Group
2. Raw and ancillary materials, consumables and goods
The breakdown is as follows:
2021
2021 on
like-for-like
basis
2020 Change
Parts 766,396 745,249 535,213 210,036
Finished products 691,435 559,171 439,474 119,697
Raw materials 149,916 149,310 85,765 63,545
Other purchases 22,425 20,530 17,945 2,585
Total 1,630,172 1,474,260 1,078,397 395,863
3. Change in inventories
The difference between the overall change in inventories reported in the income statement and the change
in balances reported in the statement of nancial position is mainly due to differences arising on the transla-
tion of foreign subsidiaries nancial statements and on the changes in the consolidation area after the ac-
quisition of Eversys.
4. Payroll costs
These costs include €132,442 thousand in production-related payroll (€98,909 thousand at 31 December
2020).
2021
2021 on
like-for-like
basis
2020 Change
Employee wages and salaries 345,002 319,454 276,337 43,117
Temporary workers 40,970 40,969 24,705 16,264
Total 385,972 360,423 301,042 59,381
The gures relating to the cost of employee benets provided by certain Group companies in Italy and
abroad are reported in note 35. Employee Benets.
In 2021 payroll costs included net non-recurring expenses of €10,667 thousand (€8,529 thousand in 2020).
This amount includes a special bonus of €11,213 thousand awarded to all employees and business part-
ners (€9,479 thousand in 2020) approved by the parent company De’Longhi S.p.A.’s Board of Directors
which, in light of the excellent performance achieved by the Group during a period of unprecedented crisis,
was given as recognition for the employees’ commitment and dedication to achieving such signicant
results.
The item includes €3,578 thousand relating to the notional cost (fair value) of the stock option plan (€2,502
thousand at 31 December 2020); please refer to note 28. Stock option plans for more information.
The average size of the Group’s workforce during the year is analyzed as follows:
2021 2020
Blue collars 6,694 5,746
White collars 3,074 2,753
Managers 301 279
Total 10,069 8,778
Group annual report and nancial statements -
Explanatory notes
95De’ Longhi Group
5. Services and other operating expenses
These are detailed as follows:
2021
2021 on
like-for-like
basis
2020 Change
Promotional expenses 251,610 250,962 208,164 42,798
Advertising 154,566 144,099 84,608 59,491
Transport (for purchases and sales) 214,521 189,101 103,486 85,615
Subcontracted work 67,342 65,446 46,939 18,507
Consulting services 37,798 30,481 27,457 3,024
Storage and warehousing 29,439 26,636 19,564 7,072
Technical support 21,199 21,199 20,110 1,089
Rentals and leasing 19,331 14,571 13,519 1,052
Commissions 16,223 14,437 9,184 5,253
Power 12,769 12,711 9,613 3,098
Insurance 8,928 5,575 6,672 (1,097)
Product certication and product
inspection fees
6,949 6,707 6,108 599
Travel 6,064 5,306 5,690 (384)
Directors' emoluments 5,943 5,958 4,847 1,111
Statutory auditors' emoluments 268 266 235 31
Maintenance 5,277 5,061 4,099 962
Postage, telegraph and telephones 4,402 3,796 3,638 158
Other utilities and cleaning fees,
security, waste collection
4,058 4,052 3,465 587
Other sundry services 46,614 43,908 34,720 9,188
Total services 913,301 850,272 612,118 238,154
Sundry taxes 71,427 67,592 48,468 19,124
Bad debts 62 117 148 (31)
Out-of-period losses 28 28 62 (34)
Other 12,595 11,727 13,344 (1,617)
Total other operating expenses 84,112 79,464 62,022 17,442
Total 997,413 929,736 674,140 255,596
In 2021, the item includes net non-recurring income totaling €289 thousand, of which income of €333 thou-
sand relating to “Other sundry services” net of expenses of €44 thousand relating to “Consulting services”.
In 2020, this item included non-recurring costs totaling €11,758 thousand, of which €4,451 thousand, includ-
ing the donation made to support domestic containment measures and expenses incurred for restructuring
underway, classied as “Other”, €4,258 thousand and €1,276 thousand relative to consultancies and insur-
ance, respectively, incurred for the Capital Brands acquisition, €1,080 thousand for transportation costs and
€693 thousand in various costs relating primarily to the actions taken to limit the impact of the health crisis.
In 2021 the item “Rentals and leasing” includes, in addition to €1,721 thousand in commercial rights (€825
thousand in 2020), operating costs relating to contracts that are not or do not contain a lease (€11,519
thousand, €10,810 thousand in 2020), as well as costs relating to leases of less than twelve months’ dura-
tion (€5,771 thousand, €1,832 thousand in 2020) or relating to low-value assets (€320 thousand, €52 thou-
sand in 2020); for further information, please refer to note 15. Leases.
6. Provisions
These include €23,834 thousand in provisions for contingencies and other charges and €5,133 thousand in
provisions for doubtful accounts.
The main changes in this item are discussed in note 36. Other provisions for non-current contingencies and
charges.
In 2021, the item also includes non-recurring provisions totaling €5,406 thousand.
7. Amortization
The breakdown is as follows:
2021
2021 on
like-for-like
basis
2020 Change
Amortization of intangible assets 21,886 12,881 15,650 (2,769)
Depreciation of property, plant and
equipment
51,504 48,610 46,226 2,384
Depreciation of Right of Use assets 20,289 19,090 19,117 (27)
Total 93,679 80,581 80,993 (412)
More details about amortization and depreciation can be found in the tables reporting movements in intan-
gible assets and property, plant and equipment.
Group annual report and nancial statements -
Explanatory notes
96De’ Longhi Group
8. Non-recurring income/(expenses)
The non-recurring items amounted to €30,762 thousand in 2021 and are detailed in the respective lines of
the income statement (expenses of €14,978 thousand in change in inventories, €10,667 thousand in payroll
costs, €5,406 thousand in provisions and income of €289 thousand in services and other operating
expenses).
The amount includes the special bonus of €11,213 thousand paid to the Group’s employees and business
partners for the commitment to achieving business targets in the dicult context created by the current
health crisis.
The €9,347 thousand in fair value recognized as a result of the Capital Brands and Eversys business combi-
nations was also recognized seperately in non-recurring income/expenses.
The item also includes the impact of a few valuations (€9,971 thousand) of current assts held at the date of
this report, updated in light of the current geopolitical situation.
In addition to the above, the 2021 income statement includes a non-recurring items, included in the “Net -
nancial income (expense)” which represents the gain recognized after the business combination, complet-
ed in stages, deriving from the fair value re-measurement of the value owned by the Group of the Eversys
Group’s assets acquired.
9. Net nancial income (expenses)
Net nancial income and expenses are broken down by nature as follows:
2021
2021 on
like-for-like
basis
2020 Change
Exchange differences and
gains (losses) on currency
hedges (*)
(655) (32) (1,437) 1,405
Fair value re-measurement
of Eversys n.c.i.
25,329 - - -
Share of prot of equity
investments consolidated by
the equity method
(813) (813) 3,465 (4,278)
Net interest expense (4,834) (3,703) (3,699) (4)
Interest for leasing (1,475) (1,417) (1,550) 133
Other nancial income
(expenses)
(4,231) (3,962) (2,471) (1,491)
Other net nancial income
(expenses)
(10,540) (9,082) (7,720) (1,362)
Net nancial income
(expenses)
13,321 (9,927) (5,692) (4,235)
(*) The item includes €10 thousand relating to exchange rate losses on leases accounted for in accordance with IFRS 16 Leases.
“Exchange differences and gains (losses) on currency hedges” includes the rate differentials on currency
risk hedges, as well as the exchange differences linked to consolidation.
“Fair value re-measurement of Eversys n.c.i.” includes the gain recognized after the business combination,
completed in stages, was completed and the interest already held by the Group was redetermined based on
the fair value of the assets acquired.
“Share of prot of equity investments consolidated by the equity method” includes income from the joint
venture TCL/DL, dedicated to the manufacture of portable air conditioners and the investment in NPE S.r.l., a
supplier of electronic components.
“Net interest” includes bank interest on the Group’s nancial debt (recalculated using the amortized cost
method) and the nancial cost of factoring receivables without recourse, net of the interest received on the
Group’s investments.
Interest on leases is equal to the portion of nancial expenses payable matured in the reporting period on a
liability, recognized in accordance with IFRS 16 Leases. For more information see note 15. Leases.
Group annual report and nancial statements -
Explanatory notes
97De’ Longhi Group
10. Income taxes
These are analyzed as follows:
2021
2021 on
like-for-like
basis
2020 Change
Current income taxes:
- Income taxes 102,620 92,003 83,401 8,602
- IRAP (Italian regional
business tax)
8,443 8,443 5,118 3,325
Deferred (advanced) taxes (22,561) (18,261) (32,338) 14,077
Total 88,502 82,185 56,181 26,004
This item includes the estimated tax credit for research and development pursuant to Law 190/2014 for the
current year.
“Deferred (advanced) taxes” include the taxes calculated on the temporary differences arising between the
accounting values of assets and liabilities and on the corresponding tax base (particularly for taxed provi-
sions recognized by the parent company and its subsidiaries) and on the distributable income of the subsid-
iaries. They also include the benet arising from the carryforward of unused tax losses which are likely to be
used in the future.
The actual and theoretical tax charge are reconciled as follows:
2021 %
2021 on like-for-
like basis
% 2020 %
Prot before taxes 400,251 100.0% 340,853 100.0% 256,314 100.0%
Theoretical taxes 96,060 24.0% 81,805 24.0% 61,515 24.0%
Other (*) (16,001) (4.0%) (8,063) (2.4%) (10,452) (4.1%)
Total income taxes 80,059 20.0% 73,742 21.6% 51,063 19.9%
IRAP (Italian regional business
tax)
8,443 2.1% 8,443 2.5% 5,118 2.0%
Actual taxes 88,502 22.1% 82,185 24.1% 56,181 21.9%
(*) Mostly refers to the net tax effect of permanent differences, of different tax rates applied abroad relative to the theoretical ones
applied in Italy, of adjustments on prior years taxes and of non recurring items.
Group annual report and nancial statements -
Explanatory notes
98De’ Longhi Group
C
Comments on the statement
of nancial position: assets
Non-current assets
11. Goodwill
31.12.2021 31.12.2020 (*)
Gross Net Gross Net
Goodwill 365,152 358,405 264,291 257,544
The change in “Goodwill” is explained, for €82,280 thousand, by the recent Eversys acquisition (for more in-
formation refer to the section “Changes in the scope of consolidation - Business combinations”) and the re-
mainder by the translation at 31 December 2021 of goodwill in currency following the acquisition of foreign
operations. Goodwill is not amortized because it is considered to have an indenite useful life. Instead, it is
tested for impairment at least once a year to identify any evidence of loss in value.
For the purposes of impairment testing, goodwill is allocated by CGU (cash generating unit), namely the
historic divisions De’Longhi, Kenwood and Braun, along with Capital Brands and Eversys following the
change in perimeter already mentioned above, as follows:
Cash-generating unit 31.12.2021
De'Longhi 26,444
Kenwood 17,120
Braun 48,836
Capital Brands 178,678
Eversys 87,327
Total 358,405
(*) The comparison gures at 31.12.2020 were restated as described in the section “Restatement of comparison gures”.
The objective of the impairment test is to determine the value in use of the CGU to which the goodwill refers,
meaning the present value of the future cash ows expected to be derived from continuous use of the
assets; any cash ows arising from extraordinary events are therefore ignored.
In particular, value in use is determined by applying the discounted cash ow method to forecast cash ows
contained in plans prepared assuming realistic scenarios on the information available at the reporting date,
also including the 2021-2023 three-year plan, and 2022 budget proposal submitted to the Board of
Directors.
Plan data was projected beyond the explicit planning period using a perpetuity growth rate that was no
higher than those expected for the markets in which the individual CGUs operate. The growth rate in termi-
nal values used for projecting beyond the planning period was therefore 2% for all the CGUs, deemed repre-
sentative of a precautionary growth rate in terminal values.
The cash ows and discount rate were determined net of tax.
The discount rates utilized, which vary between 5.2% and 6.2% for the different cash-generating units, there-
fore, reect the estimated market valuations and the time value of money at the reporting date, as well as
sector risks.
The impairment tests carried out at the end of 2021 have not revealed any other signicant evidence of
goodwill impairment.
With regard to the CGUs De’Longhi and Kenwood, which comprise the Group’s traditional business, the re-
coverable amounts shown in the impairment tests and the sensitivity analysis are much higher than book
value.
For the more recently acquired CGUs Braun, Capital Brands and Eversys, the recoverable amount deter-
mined by the test was much higher than book value.
The results obtained using the discounted cash ow method have been tested for their sensitivity to chang-
es in certain key variables, within reasonable ranges and on the basis of mutually consistent assumptions.
The variables altered were the discount rate (between 5.0% and 6.4%) and the growth rate in terminal value
(in the range 1.8%-2.2%).
The estimated recoverable amounts for all the CGUs, however, were higher than book value and the sensitiv-
ity analyses point to relatively stable results; in fact, the minimum and maximum amounts diverged by
around 15% from the central point when both variables were altered.
Group Board of Directors approved the assumptions and the criteria used to perform the impairment tests.
Group annual report and nancial statements -
Explanatory notes
99De’ Longhi Group
However, estimating CGU recoverable amount requires management to make discretionary judgements
and estimates. In fact, several factors also associated with developments in the dicult market context
could make it necessary to reassess the value of goodwill. The Group will be constantly monitoring those
events and circumstances that might make it necessary to perform new impairment tests.
12. Other intangible assets
These are analyzed as follows:
31.12.2021 31.12.2020 (*)
Gross Net Gross Net
New product development
costs
125,616 19,704 117,711 21,780
Patents 74,830 33,436 41,433 3,082
Trademarks and similar rights 434,171 327,688 389,834 283,673
Work in progress and
advances
30,223 22,663 23,062 16,085
Other 132,548 105,981 123,227 104,617
Total 797,388 509,472 695,267 429,237
The following table reports movements in the main asset categories during 2021:
New product
development costs
Patents
Trademarks and
similar rights
Work in progress
and advances
Other Total
Net opening balance (*) 21,780 3,082 283,673 16,085 104,617 429,237
Additions 2,004 237 174 13,720 588 16,723
Amortization (9,981) (3,043) (322) (583) (7,957) (21,886)
Acquisitions - 31,075 32,791 748 - 64,614
Translation differences and
other movements (**)
5,901 2,085 11,372 (7,307) 8,733 20,784
Net closing balance 19,704 33,436 327,688 22,663 105,981 509,472
(*) The opening balances were restated as described in the section “Restatement of comparison gures”.
(**) “Other movements” refers primarily to the reclassication of intangible assets.
New product development costs” refers to the capitalization of expenses related to projects for the develp-
ment of innovative products based on detailed reporting and analysis of the costs incurred and the estimat-
ed future usefulness of such projects.
The Group has capitalized a total of €14,439 thousand in development costs as intangible assets in 2021, of
which €2,004 thousand in “New product development costs” for projects already completed at the reporting
date and €12,435 thousand in “Work in progress and advances” for projects still in progress.
“Patents” mostly refers to internal development costs and the subsequent cost of ling for patents and to
costs for developing and integrating data processing systems.
The increase refers primarily to the acquisition of patents and proprietary technology developed by
Eversys.
“Trademarks and similar rights” includes a few trademarks calculated based on an indenite useful life in
accordance with IAS 38, taking into account, above all, brand awareness, economic benets, reference
market characteristics, brand specic strategies and the amount of investments made to sustain the
brands: €79.8 million for the “De’Longhi” trademark, €95.0 million for the perpetual license over the “Braun”
brand, €117.1 million for the Nutribullet/MagicBullet trademark, and €35.1 million for the Eversys
trademark.
Group annual report and nancial statements -
Explanatory notes
100De’ Longhi Group
The impairment test carried out at the end of 2021 for the brands based on an indenite useful life, did not
reveal any evidence that these assets might have suffered an impairment loss.
The method used to test impairment involves discounting to present value the royalties that the Group
would be able to earn from permanently granting third parties the right to use the trademarks in question.
This method, which is based on royalty cash ows and reasonably estimated sales volumes, is the most
commonly used for company valuation purposes since it is able to provide a suitable expression of the rela-
tionship between the strength of the trademark and business protability.
The discount rates used, which vary between 6.1% and 7.1% net of tax, reect market valuations and the
time value of money at the reporting date.
The growth rate in terminal values used for projecting beyond the planning period was therefore 2% for all
the CGUs, deemed representative of a precautionary growth rate in terminal values.
The cash ows discounted to present value are stated net of tax (in keeping with the discount rate).
The results of the impairment test have been tested for their sensitivity to changes in certain key variables,
within reasonable ranges and on the basis of mutually consistent assumptions. The variables altered were
the discount rate (between 5.9% and 7.3%) and the growth rate in terminal value (in the range 1.8%-2.2%).
The sensitivity analysis has revealed relatively stable results; in fact, the minimum and maximum amounts
diverged by around 10% from the central point when both variables were changed.
“Other intangible assets” is explained primarily by the value of the portfolio recognized following allocation
of the purchase price to Capital Brands, subject to amortization based on the estimated useful life.
13. Land, property, plant and machinery
These are analyzed as follows:
31.12.2021 31.12.2020 (*)
Gross Net Gross Net
Land and buildings 175,020 126,100 129,262 88,153
Plant and machinery 161,852 52,846 152,121 50,364
Total 336,872 178,946 281,383 138,517
The following table reports movements during 2021:
Land and buildings Plant and machinery Total
Net opening balance 88,153 50,364 138,517
Additions 7,411 8,278 15,689
Disposals (3) (418) (421)
Amortization (6,932) (11,133) (18,065)
Acquisitions 10,157 907 11,064
Translation differences and
other movements
27,314 4,848 32,162
Net closing balance 126,100 52,846 178,946
The investments in “Land and buildings” refer mainly to the development of the new headquarters in
Treviso.
The investments in “Plants and machinery” refer mainly to increases of the production lines for coffee ma-
chine in Italy and to the purchases of machinery for the plants in Romania. The other movements refer, rst
of all, to the reclassication of the amount relating to the investments made in the previous years in the
production plants (in China, Romania and Italy) previously classied under tangible assets in progress.
14. Other tangible assets
Other tangible assets are analyzed as follows:
31.12.2021 31.12.2020 (*)
Gross Net Gross Net
Industrial and commercial
equipment
363,063 71,046 320,600 49,881
Other 99,046 26,967 89,134 22,118
Work in progress and
advances
37,800 37,800 48,647 48,646
Total 499,909 135,813 458,381 120,645
(*) The comparison gures at 31.12.2020 were restated as described in the section “Restatement of comparison gures”.
Group annual report and nancial statements -
Explanatory notes
101De’ Longhi Group
The following table reports movements during 2021:
Industrial and
commercial
equipment
Other
Work in
progress and
advances
Total
Net opening balance (*) 49,881 22,118 48,646 120,645
Additions 26,767 11,603 34,314 72,684
Disposals (82) (111) (47) (240)
Amortization (24,923) (8,516) - (33,439)
Acquisitions 1,196 1,078 - 2,274
Translation differences and
other movements
18,207 795 (45,113) (26,111)
Net closing balance 71,046 26,967 37,800 135,813
The additions to “Industrial and commercial equipment” refer primarily to the purchase of moulds for the
manufacturing of new products.
The increase in “Work in progress” refers to the investments linked to the development of the new headquar-
ters and the improvement in the Romanian production facility.
15. Leases
Existing leases are functional to the Group’s operations and refer mainly to the leasing of properties, auto-
mobiles and other capital goods.
Movements in the leased right of use assets in 2021 are shown below:
Land and
buildings
Industrial and
commercial
equipment
Plant and
machinery
Other Total
Net opening balance 57,471 2,249 - 3,882 63,602
Additions 27,649 - - 2,369 30,018
Disposals (778) - (14) (102) (894)
Amortization (17,501) (378) (4) (2,406) (20,289)
Acquisitions 258 - 28 58 344
Translation differences and
other movements
877 8 1 52 938
Net closing balance 67,976 1,879 11 3,853 73,719
In 2021, the result for the period includes depreciation and amortization for €20,289 thousand, interest pay-
able for €1,475 thousand and exchange losses for €10 thousand, while €20,674 thousand in lease pay-
ments were reversed.
At 31 December 2021 nancial liabilities for leases of €76,266 thousand (of which €57,228 thousand expir-
ing beyond 12 months) including also €5,425 thousand pertaining to the newly acquired Eversys (of which
€5,045 thousand expiring beyond 12 months) and nancial assets for advanced payments of €365 thou-
sand, included in “Current nancial receivables and assets”, were recognized in the nancial statements
(please refer to note 24).
The maturities of the undiscounted lease liabilities (based on contractual payments) are shown below:
Undiscounted
ows at
31.12.2021
Payable within
one year
Payable in 1-5
years
Payable in more
than ve years
Lease liabilities 80,341 20,255 39,536 20,550
The adoption of IFRS 16 Lease affected Group net equity at 31 December 2021 for €1,855 thousand.
16. Equity investments
Details of equity investments are as follows:
31.12.2021 31.12.2020
Equity investments consolidated using the
equity method
7,280 30,022
Investment measured at fair value 51 51
Total 7,331 30,073
“Equity investments consolidated using the equity method” refers to the equity investments subject to joint
control as per contractual agreements and associated companies, accounted for using the equity method
in accordance with IAS 28 - Investments in associates and joint venture.
(*) The comparison gures at 31.12.2020 were restated as described in the section “Restatement of comparison gures”.
Group annual report and nancial statements -
Explanatory notes
102De’ Longhi Group
The changes in 2021 are shown below:
31.12.2021
Net opening balance 30,022
Interest in net prot (813)
Exchange rate differences 438
Changes through OCI 184
Business combination Eversys (22,551)
Net closing balance 7,280
17. Non-current receivables
The balance at 31 December 2021 of €4,605 thousand comprises €4,604 thousand in security deposits
(€4,478 thousand at 31 December 2020).
18. Other non-current nancial assets
This item includes investments made as part of the Group’s liquidity management with primary counter-
parts, namely nancial assets that will be held until maturity consistent with the business model objective to
receive contractual cash ows (principal and interest) at specic maturities which were, therefore, account-
ed for using the amortized cost method.
The item includes mainly €20,109 thousand relating to two bonds with a total nominal value of €20,000
thousand, maturing in 2026 and 2027, respectively, €50,113 thousand relating to oating rate notes with
semi-annual and quarterly coupons (par value of €50,000 thousand) maturing in 2026 and €316 thousand
relating to the fair value of derivatives.
No signs of impairment emerged about the balances recognized in the nancial statements.
19. Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are analyzed as follows:
31.12.2021 31.12.2020 (*)
Deferred tax assets 74,297 58,455
Deferred tax liabilities (70,070) (56,440)
Net closing balance 4,227 2,015
“Deferred tax assets” and “Deferred tax liabilities” include the taxes calculated on temporary differences be-
tween the carrying amount of assets and liabilities and their corresponding tax base (particularly taxed pro-
visions recognized by the parent company and its subsidiaries), the tax effects associated with the alloca-
tion of higher values to xed assets as a result of allocating consolidation differences based on the
applicable tax rate and the deferred taxes on the distributable income of subsidiaries. Deferred tax assets
are calculated mainly on provisions and consolidation adjustments. They also include the benet arising
from the carryforward of unused tax losses which are likely to be used in the future.
The net balance is analyzed as follows:
31.12.2021 31.12.2020 (*)
Temporary differences 575 (948)
Tax losses 3,652 2,963
Net closing balance 4,227 2,015
The change in the net asset balance also reects a decrease of €2,278 thousand relating to the “Fair value
and cash ow hedge reserve” recognized in net equity with reference to the fair value evaluation of invest-
ments and cash ow hedge derivatives and of €538 thousand in “Prot (loss) carried forward” and relating
to the actuarial gains/(losses) recognized in the comprehensive income statement pursuant to the IAS 19 -
Employee Benets.
(*) The comparison gures at 31.12.2020 were restated as described in the section “Restatement of comparison gures”.
Group annual report and nancial statements -
Explanatory notes
103De’ Longhi Group
Current assets
20. Inventories
“Inventories”, shown net of an allowance for obsolete and slow-moving goods, can be analyzed as follows:
31.12.2021 31.12.2020 (*)
Finished products and goods 628,717 351,733
Raw, ancillary and consumable materials 143,280 87,538
Work in progress and semi-nished products 43,909 32,098
Inventory writedown allowance (46,653) (39,264)
Total 769,253 432,105
The value of inventories is stated after deducting an allowance for obsolete or slow-moving goods totaling
€46,653 thousand (€39,264 thousand at 31 December 2020) in relation to products and raw materials that
are obsolete and slow-moving or are no longer of strategic interest to the Group.
21. Trade receivables
These are analyzed as follows:
31.12.2021 31.12.2020 (*)
Trade receivables
- due within 12 months 381,933 407,884
- due beyond 12 months - 14
Allowance for doubtful accounts (15,265) (10,561)
Total 366,668 397,337
Trade receivables are stated net of an allowance for doubtful accounts of €15,265 thousand, representing a
reasonable estimate of the expected losses during the entire life of the receivables. The allowance takes
account of the fact that a signicant portion of the receivables are covered by insurance policies with major
insurers.
(*) The comparison gures at 31.12.2020 were restated as described in the section “Restatement of comparison gures”.
In accordance with the disclosure required by Consob Circular 3369 of 9 April 1997, we report that the total
amount of receivables factored without recourse and outstanding at 31 December 2021 is €198,216 thou-
sand (€165,250 thousand at 31 December 2020). The total amount of receivables factored by the Group
(turnover) during 2021 (under Law 52/1991 known as the Factoring Law) was €848,010 thousand (€924,029
thousand during 2020).
Movements in the allowance for doubtful accounts are shown in the following table:
31.12.2020 Provisions Utilization
Translation
differences
and other
movements
Changes in
consolida-
tion area
31.12.2021
Allowance for
doubtful
accounts
10,561 5,134 (1,088) 532 126 15,265
The change in the allowance is explained, in addition to translation differences and changes in the consoli-
dation area, to provisions for expected losses and to utilization during the year to cover bad debt for which
provisions had already been made.
The Group has received guarantees from customers as collateral against trade balances; in addition, a sig-
nicant portion of the receivables are covered by insurance policies with major insurers. More details can be
found in note 43. Risk management.
22. Current tax assets
These are analyzed as follows:
31.12.2021 31.12.2020
Direct tax receivables 3,642 2,175
Tax payments on account 3,527 3,460
Tax refunds requested 2,323 906
Total 9,492 6,541
There are no current tax assets due beyond 12 months.
Group annual report and nancial statements -
Explanatory notes
104De’ Longhi Group
23. Other receivables
“Other receivables” are analyzed as follows:
31.12.2021 31.12.2020 (*)
VAT 22,646 14,207
Advances to suppliers 4,475 3,047
Prepaid insurance costs 2,175 1,649
Other tax receivables 1,837 1,468
Employees 210 132
Other 11,805 9,615
Total 43,148 30,118
This item includes other receivables due beyond 12 months of €30 thousand.
24. Current nancial receivables and assets
“Current nancial receivables and assets” are analyzed as follows:
31.12.2021 31.12.2020
Fair value of derivatives 11,062 10,847
Advances for leasing contracts 365 391
Fair value of other current nancial assets 90,528 39,766
Other current nancial assets 200,122 192,001
Total 302,077 243,005
More details on the fair value of derivatives can be found in note 43. Risk management.
“Other current nancial assets” includes the amount of investments made as part of liquidity management
valued at amortized cost.
(*) The comparison gures at 31.12.2020 were restated as described in the section “Restatement of comparison gures”.
25. Cash and cash equivalents
This balance consists of surplus liquidity on bank current accounts and other cash equivalents, mostly relat-
ing to customer payments received at period end and temporary cash surpluses.
Some of the Group’s foreign companies have a total of €718.2 million in cash on bank accounts held at the
same bank. These cash balances form part of the international cash pooling system and are partially offset
by €699.7 million in overdrafts held at the same bank by other foreign companies. This bank therefore acts
as a “clearing house” for the Group’s positive and negative cash balances. Considering the substance of the
transactions and technical workings of the international cash pooling system, the positive and negative
cash balances have been netted against one another in the consolidated statement of nancial position, as
permitted by IAS 32.
The cash balances at 31 December 2021 include €57 thousand in current accounts of certain subsidiaries,
that are restricted, having been given as collateral.
26. Non-current assets held for sale
The item refers to the value of a freehold property of a subsidiary that was classied under non-current
assets held for sale, as required under IFRS 5 - Non-current assets held for sale and discontinued operations,
insofar as the Group initiated a program to locate a buyer and complete the disposal.
The amount corresponds to the net carrying amount, insofar as it is not less than the fair value of the assets
held for sale, net of the selling costs.
31.12.2020
Translation
differences
31.12.2021
Non-current assets held for
sale
977 78 1,055
Group annual report and nancial statements -
Explanatory notes
105De’ Longhi Group
C
Comments on the statement
of nancial position:
Net equity and liabilities
Net equity
The primary objective of the Group’s capital man-
agement is to maintain a solid credit rating and ad-
equate capital ratios in order to support its busi-
ness and maximize value for shareholders.
On 21 April 2021 the Shareholders’ Meeting of
De’ Longhi S.p.A. resolved to distribute a total of
€80,821 thousand as dividends, of which €80,336
thousand was paid during the year.
Movements in the equity accounts are reported in
one of the earlier schedules forming part of the -
nancial statements; comments on the main com-
ponents and their changes are provided below.
27. Treasury shares
At 31 December 2021 the Group held 895,350
treasury shares for a total of €14,534 thousand,
purchased pursuant to the buyback program ap-
proved during the Ordinary Shareholders’ Meeting
held on 30 April 2019 and subsequently renewed
on 22 April 2020 - after revoking the previous au-
thorization granted by shareholders, for the unexe-
cuted part - for a period of up to a maximum of 18
months (namely through 22 October 2021).
28. Stock option plans
During the Annual General Meeting held on 14 April
2016 shareholders approved the share-based in-
centive plan “Stock Options plan 2016-2022”.
regulations were approved by shareholders during
the Annual General Meeting.
The options may be exercised by the Beneciaries
- on one or more occasions - solely and exclusively
during the exercise period, namely during the fol-
lowing timeframes:
• between 15 May 2019 and 31 December 2022
(more specically, between either 15 May - 15
July; 1 September - 15 October; 15 November -
15 January), for up to a total maximum amount
equal to 50% of the total options assigned each
beneciary;
• between 15 May 2020 and 31 December 2022
(more specically, between either 15 May - 15
July; 1 September-15 October; 15 November - 15
January) for the remaining 50% of the total op-
tions assigned each beneciary.
Any option not exercised by the end of the exercise
period will be automatically expire and the bene-
ciary will have no right to any compensation or
indemnity.
All shares will have regular dividend rights and,
therefore, will be the same as all other shares out-
standing at their issue date, and will be freely trans-
ferrable by the beneciary.
Please refer to the Annual Report on the Remunera-
tion Policy and Compensation Paid for more infor-
mation on the Plan.
For the purposes of valuation under IFRS 2 - Share-
based payments, two different tranches were de-
ned for each award which contain the same
number of options broken down equally into the
In order to service the plan, during the AGM share-
holders resolved to increase share capital against
payment by up to a maximum nominal amount of
€3,000,000 by 31 December 2022 through the
issue, including on one or more occasions, of a
maximum of 2,000,000 ordinary shares at a par
value of €1.5 each pari passu with all shares out-
standing at the issue date and with dividend rights.
The purpose of the plan is to maintain the loyalty of
the beneciaries by recognizing the contribution
that they make to increasing the value of the Group.
The plan has a duration of seven years and will, at
any rate, expire on 31 December 2022.
The beneciaries were identied by the Board of
Directors based on the proposal of the Remunera-
tion and Appointments Committee or the Chief Ex-
ecutive Ocer of the Parent Company De’Longhi
S.p.A., after having consulted with the Board of
Statutory Auditors.
The options were granted free of charge: the bene-
ciaries, therefore, were not expected to pay any
sort of consideration upon assignment. Converse-
ly, exercise of the option and the resulting subscrip-
tion of the shares is subject to payment of the exer-
cise price.
Each option grants the right to subscribe one share
at the conditions set out in the relative regulations.
The exercise price shall be equal to the arithmetic
average of the ocial market price of the Compa-
ny’s shares recorded on the “Euronext Milan” man-
aged by Borsa Italiana S.p.A. 60 calendar days prior
to the date on which the Plan and the relative
plan’s two exercise periods.
The fair value of the stock options at the assign-
ment date is determined using the Black-Scholes
model which takes into account the conditions for
the exercise of the right, the current share price, ex-
pected volatility, a risk-free interest rate, as well as
the non-vesting conditions.
Volatility is estimated based on the data of a
market information provider and corresponds to
the estimated volatility of the stock over the life of
the plan.
Group annual report and nancial statements -
Explanatory notes
106De’ Longhi Group
The assumptions used to determine the fair value of the options assigned are shown below:
2017 award 2016 award
First tranche fair value 7.6608 5.3072
Second tranche fair value 7.4442 5.2488
Expected dividends (Euro) 0.8 0.43
Estimated volatility (%) 28.09% 33.23%
Historic volatility (%) 31.12% 36.07%
Market interest rate Euribor 6M Euribor 6M
Expected life of the options (years) 2.142/3.158 2.51 / 3.53
Exercise price (Euro) 20.4588 20.4588
A total of 1,396,092 options have been exercised, of which 347,528 in 2021.
During the Annual General Meeting held on 22 April 2020, shareholders approved the stock-based incentive
plan “Stock Options plan 2020-2027”.
In order to service the plan, during the AGM shareholders resolved to further increase share capital against
payment by up to a maximum nominal amount of €4,500,000 through the issue (if treasury shares are insuf-
cient), including on one or more occasions, of a maximum of 3,000,000 ordinary shares at a par value of
€1.5 each pari passu with all shares outstanding at the issue date and with dividend rights
The purpose of the plan is to foster the loyalty of the beneciaries, incentivizing them to stay with the Group
by linking their compensation to the achievement of the company’s medium/long-term goals.
The plan has a duration of around eight years and will, at any rate, expire on 31 December 2027.
The beneciaries were identied by the Board of Directors based on the proposal of the Remuneration and
Appointments Committee or the Chief Executive Ocer of the Parent Company De’Longhi S.p.A., after
having consulted with the Board of Statutory Auditors.
The options are granted free of charge: the beneciaries, therefore, will not be expected to pay any sort of
consideration upon assignment. Conversely, exercise of the option and the resulting subscription of the
shares will be subject to payment of the exercise price.
Each option grants the right to subscribe one share at the conditions set out in the relative regulations.
The exercise price shall be equal to the arithmetic average of the ocial market price of the Company’s
shares recorded on the “Euronext Milan” managed by Borsa Italiana S.p.A. 180 calendar days prior to the
date on which the 2020-2027 Plan and the relative regulations were approved by shareholders during the
Annual General Meeting. This period of time is sucient to limit the impact that any volatility caused by the
Coronavirus crisis could have on the stock price.
The options may be exercised by the Beneciaries - on one or more occasions - solely and exclusively during
the exercise period, namely during the following timeframes:
Group annual report and nancial statements -
Explanatory notes
107De’ Longhi Group
Award (05.04.2020) Award (05.14.2020) Award (05.15.2020) Award (05.20.2020) Award (11.05.2020)
First tranche fair value 4.4283 4.591 4.4598 4.4637 12.402
Second tranche fair value 4.3798 4.536 4.4034 4.4049 12.0305
Expected dividends (Euro) 2.80% 2.80% 2.80% 2.80% 2.80%
Estimated volatility (%) 35.00% 34.00% 33.00% 32.00% 28.00%
Historic volatility (%) 37.00% 37.00% 37.00% 37.00% 37.00%
Market interest rate (0.2%) (0.2%) (0.2%) (0.2%) (0.2%)
Expected life of the options (years) 7.7 7.7 7.7 7.7 7.7
Exercise price (Euro) 16.982 16.982 16.982 16.982 16.982
• between 15 May 2023 and 31 December 2027
for up to a total maximum amount equal to 50%
of the total options assigned each beneciary,
without prejudice to the black-out periods re-
ferred to in Art. 12 of the Regulations;
• between 15 May 2024 and 31 December 2027
for the remaining 50% of the total options as-
signed each beneciary, without prejudice to the
black-out periods referred to in Art. 12 of the
Regulations.
Any option not exercised by the end of the exercise
period will be automatically expire and the bene-
ciary will have no right to any compensation or
indemnity.
All shares will have regular dividend rights and,
therefore, will be the same as all other shares out-
standing at their issue date, and will be freely trans-
ferrable by the beneciary.
Please refer to the Annual Report on the Remunera-
tion Policy and Compensation Paid for more infor-
mation on the Plan.
At 31 December 2020 stock options on 2,360,000
shares had been assigned; the number was un-
changed in 2021.
For the purposes of valuation under IFRS 2 - Share-
based payments, two different tranches were de-
ned for each award which contain the same
number of options broken down equally into the
plan’s two exercise periods. The fair value of each
tranche is different.
The fair value of the stock options at the assign-
ment date is determined using the Black-Scholes
model which takes into account the conditions for
the exercise of the right, the current share price, ex-
pected volatility, a risk-free interest rate, as well as
the non-vesting conditions.
Volatility is estimated based on the data of a
market information provider and corresponds to
the estimated volatility of the stock over the life of
the plan.
The fair value of the options assigned on the date
of this Report and the assumptions made for its
evaluation are as follows:
29. Share capital
At 31 December 2020 share capital comprised
150,548,564 ordinary shares with a par value €1.5
each, for a total of €225,823 thousand.
During 2021, 347,528 options relating to the 2016-
2022 Stock Option Plan were exercised at an exer-
cise price of €20.4588 and, consequently, the same
number of shares were subscribed.
The share capital at 31 December 2021 comprises
150,896,092 ordinary shares with a par value of
€1.5 for a total of €226,344 thousand.
In the period 1- 15 January 2022 no options relative
to the same plan were exercised.
Group annual report and nancial statements -
Explanatory notes
108De’ Longhi Group
30. Reserves
The details are as follows:
31.12.2021 31.12.2020 Change
Share premium reserve 34,300 25,838 8,462
Legal reserve 45,168 44,850 318
Other reserves:
- Extraordinary reserve 188,113 180,542 7,571
- Fair value and cash ow hedge reserve 3,865 (3,462) 7,327
- Stock option reserve 8,488 6,784 1,704
- Reserve for treasury shares (14,534) (14,534) -
- Currency translation reserve 45,638 (15,058) 60,696
- Prot (loss) carried forward 720,097 616,438 103,659
Total 1,031,135 841,398 189,737
The “Share premium reserve” was set up following the public offering at the time of the parent company’s
listing on the Milan stock exchange (now “Euronext Milan”) on 23 July 2001 which was subsequently re-
duced following the demerger transaction in favour of DeLclima S.p.A.. It amounted to €25,838 thousand at
31 December 2020 following the exercise of options assigned under the “Stock Option Plan 2016-2022”. In
2021 the reserve was increased by €34,300 thousand following further exercise of stock options under the
same plan of €8,462 thousand.
The “Legal Reserve” amounted to €44,850 thousand at 31 December 2020. The increase of €318 thousand
is attributable to the allocation of prot for 2020 approved by shareholders during De’Longhi S.p.A.’s AGM
held on 21 April 2021.
The “Extraordinary reserve” increased by €7,571 thousand due to the allocation of the prot for the year, as
approved by shareholders of De’Longhi S.p.A. during the above mentioned AGM.
The “Fair value and cash ow hedge reserve” reports a positive balance of €3,865 thousand, net of €1,056
thousand in tax.
The change in the “Fair value and cash ow hedge” reserve in 2021, recognized in the statement of compre-
hensive income for the year, is attributable to the positive fair value of the cash ow hedge and availa-
ble-for-sale securities of €7,327 thousand net of €2,278 thousand in tax.
The “Stock option reserve” refers to the two share incentive plans already described in note 28. Stock option
plans.
At 31 December 2021, the “Stock option” reserve amounted to positive €8,488 thousand which corresponds
to the fair value of the options at the assignment date, recognized on a straight-line basis from the grant
date through vesting.
With regard to the “2016-2022 Stock Option Plan”, the reserve is recognised at a positive value of €2,982
thousand; the change with respect to 31 December 2020 is explained by the exercise of 347,528 options for
a total of €1,874 thousand.
The reserve for the “2020-2027 Stock Option PLan” amounts to €5,506 thousand, of which €3,578 thousand
recognized in the year.
The “Reserve for treasury shares” was negative for €14,534 thousand and corresponds to the amount of
treasury shares purchased pursuant to the buyback program.
“Prot (loss) carried forward” includes the retained earnings of the consolidated companies and the effects
of consolidation adjustments and adjustments to comply with Group accounting policies.
Below is a reconciliation between the net equity and prot reported by the parent company, De’Longhi S.p.A.,
and the gures shown in the consolidated nancial statements:
Net equity
31.12.2021
Prot for
2021
Net equity
31.12.2020
Prot for
2020
De’Longhi S.p.A. nancial
statements
605,379 107,099 567,417 88,710
Share of subsidiaries' equity and
results for period attributable to the
Group, after deducting carrying value
of the investments
583,331 224,690 465,275 121,064
Allocation of goodwill arising on
consolidation and related amortization
and reversal of goodwill recognized for
statutory purposes
436,660 (5,634) 274,522 (1,948)
Elimination of intercompany prots (55,097) (14,406) (40,128) (8,227)
Other adjustments 322 - 268 534
Consolidated nancial statements 1,570,595 311,749 1,267,354 200,133
Minority 2,018 651 - -
Consolidated nancial state-
ments-Group portion
1,568,577 311,098 1,267,354 200,133
Group annual report and nancial statements -
Explanatory notes
109De’ Longhi Group
31. Minorities’ portion of net equity
The minorities’ portion of net equity amounts to €2,018 thousand (including the result for the reporting
period of €651 thousand) and refers to the minority interest (49%) in the company Eversys UK Ltd. and its
subsidiary Eversys Ireland Ltd., which became part of the Group as a result of the Eversys acquisition.
32. Earnings per share
Earnings per share are calculated by dividing the earnings for the year by the weighted average number of
the Company’s shares outstanding during the period.
31.12.2021
Weighted average number of shares
outstanding
149.797.457
Weighted average number of diluted shares
outstanding
152.909.650
The dilutive impact was not signicant at 31 December 2021, therefore the difference between the diluted
earnings per share (€2.03) and the basic earnings per share (€2.08) is not material.
Group annual report and nancial statements -
Explanatory notes
110De’ Longhi Group
Liabilities
33. Bank loans and borrowings
“Bank loans and borrowings” are analyzed as follows:
Payable within one year Payable in 1-5 years Balance 31.12.2021 Payable within one year Payable in 1-5 years Balance 31.12.2020
Overdrafts 1,069 - 1,069 1,311 - 1,311
Current bank loans and borrowings 50,006 - 50,006 45,003 - 45,003
Long- term loans (short term portion) 170,616 - 170,616 86,553 - 86,553
Bank loans and borrowings (short‐term portion) 221,691 - 221,691 132,867 - 132,867
Long- term loans - 357,457 357,457 - 330,012 330,012
Total banks loans and borrowings 221,691 357,457 579,148 132,867 330,012 462,879
The consolidation of Capital Brands did not have any effect on the analyzed item.
Despite its sound, solid nancial situation, in 2021, as part of its strategy to extend the average maturity of
its debt and take advantage of the favorable market conditions, the Group decided to increase and diversify
nancial resources by signing agreements for three loans on 24 March (€100,000 thousand, duration of 5
years, repayable in quarterly instalments as of June 2022), 14 May (€50,000 thousand, duration of 5 years,
repayable in semi-annual instalments as of June 2022) and 19 May (€100,000 thousand, duration of 5 years,
repayable in semi-annual instalments), respectively, for a total of €250 million.
In addition, the Group renegotiated the terms of a term loan, reducing the total cost paid and extending its
nal maturity, and signed a one-year loan of Euro M / Euro 50,000 repayable entirely at maturity.
With regard to the loans taken out, none of the nancial covenants included in the loan agreements, based
on net debt/equity and net debt/ EBITDA had been breached at 31 December 2021.
The main loans are oating rate; as a result of the hedges on a few of the medium/long-term loans, the
oating rate debt was swapped for xed rate debt. The fair value of the loans, calculated by discounting ex-
pected future interest ows at current market rates, does not differ signicantly from the amount of debt
recognized in the nancial statements.
34. Other nancial payables
This balance, inclusive of the current portion, is made up as follows:
31.12.2021 31.12.2020 (*)
Private placement (short‐term portion) 21,400 21,430
Negative fair value of derivatives 7,311 12,347
Other short term nancial payables 23,149 55,795
Total short‐term payables 51,860 89,572
Private placement (one to ve years) 85,661 85,672
Negative fair value of derivatives - 611
Other nancial payables (one to ve years) 8,880 170
Total long‐term payables (one to ve years) 94,541 86,453
Private placement (beyond ve years) 171,794 42,877
Total long‐term payables (beyond ve years) 171,794 42,877
Total other nancial payables 318,195 218,902
(*) The comparison gures at 31.12.2020 were restated as described in the section “Restatement of comparison gures”.
Group annual report and nancial statements -
Explanatory notes
111De’ Longhi Group
The bond loan refers to the issue and placement of €150 million in unsecured, non-convertible notes with
US institutional investors (the “US Private Placement”) completed in 2017.
The securities were issued in a single tranche, mature in 10 years in June 2027 and have an average life of 7
years. The notes will accrue interest from the subscription date at a xed rate of 1.65% per annum.
The notes will be repaid yearly in equal instalments beginning June 2021 and ending June 2027, without
prejudice to the Company’s ability to repay the entire amount in advance.
The securities are unrated and are not intended to be listed on any regulated markets.
The notes are subject to half-yearly nancial covenants in line with those contemplated in other existing
loan transactions. At 31 December 2021 the covenants (ratio of consolidated net nancial position to con-
solidated net equity, ratio of consolidated net nancial position to EBITDA before non-recurring/stock option
costs) had not been breached. The issue is not secured by collateral of any kind.
On 7 April 2021 the issue of another €150 million tranche, maturing in 2041, of the USPP was nalized. It
was issued and underwritten by a leading US nancial group.
The notes were issued in a single tranche, maturing in April 2041, with a duration of 20 years and an average
life of 15 years. Interest matures on the private placement as from the subscription date at a xed annual
rate of 1.18%. The loan will be repaid annually on a straight-line basis. The rst repayment will fall due in April
2031 and the last in April 2041, without prejudice to the Company’s early repayment option.
The bonds issued are not rated and will not be traded on regulated markets.
This loan is subject to half-yearly nancial covenants, in line with those contemplated in other existing loan
transactions. At 31 December 2021 the covenants (ratio of the net nancial position to consolidated net
equity, ratio of EBITDA before non-recurring/stock option costs to the net nancial position) had not been
breached. The issue is not secured by collateral of any kind.
“Negative fair value of derivatives” refers to hedges on interest rates and currencies, foreign currency receiv-
ables and payables, as well as on future revenue streams (anticipatory hedges).
“Other short term nancial payables” refers mainly to factoring without recourse related payables. It also in-
cludes the remaining short-term portion of the pension fund liabilities pertaining to a foreign subsidiary and
the payable to shareholders for the residual portion of dividends distributed but not yet paid.
“Other nancial payables (one to ve years)” includes the fair value of the put & call options on minority inter-
ests in Eversys Group companies and the remaining long-term portion of the pension fund related liabilities
of a foreign subsidiary.
Net nancial position
Details of the net nancial position are as follows:
31.12.2021 31.12.2020 (*)
A. Cash 1,026,081 662,947
B. Cash equivalents - -
C. Other current nancial assets 291,015 232,158
of which lease prepayments 365 391
D. Cash, cash equivalents and other current nancial assets
(A + B + C)
1,317,096 895,105
E. Current nancial liabilities (114,582) (133,980)
of which lease liabilities (19,038) (18,178)
F. Current portion of non‐current nancial liabilities (170,616) (86,553)
G. Current nancial liabilities (E + F) (285,198) (220,533)
H. Current net nancial liabilities (D + G) 1,031,898 674,572
I.1. Other non-current nancial assets 70,223 69,986
I. Non-current nancial liabilities (414,685) (378,005)
of which lease liabilities (57,228) (47,993)
J. Debt instruments (257,455) (128,549)
K. Trade payables and other non-current liabilities - -
L. Non-current net nancial liabilities (I + I.1+ J + K) (601,917) (436,568)
M. Total nancial liabilities (H + L) 429,981 238,004
Fair value of derivatives and other nancial non-bank assets/
liabilities
(4,893) (10,016)
Total net nancial position 425,088 227,988
For a better understanding of changes in the Group’s net nancial position, reference should be made to the
full consolidated statement of cash ows, appended to these explanatory notes, and the condensed state-
ment presented in the report on operations.
More details on the fair value of derivatives can be found in note 43. Risk management.
Details of nancial receivables and payables with related parties are reported in Appendix 3.
(*) The comparison gures at 31.12.2020 were restated as described in the section “Restatement of comparison gures”.
Details of the net nancial position are shown in accordance with CONSOB Bulletin DEM/6064293 of 28.07.2006; in order to
provide a better representation, the other non-current nancial assets (item K1) are shown separately; for more information refer
to note 18.
Group annual report and nancial statements -
Explanatory notes
112De’ Longhi Group
35. Employee benets
These are made up as follows:
31.12.2021 31.12.2020
Provision for severance indemnities 9,901 9,761
Dened benet plans 27,103 28,125
Other long term benets 16,374 13,402
Total 53,378 51,288
The provision for severance indemnities includes amounts payable to employees of the Group’s Italian com-
panies and not transferred to supplementary pension schemes or the pension fund set up by INPS (Italy’s
national social security agency). This provision has been classied as a dened benet plan, governed as
such by IAS 19 ‐ Employee benets.
Some of the Group’s foreign companies provide dened benet plans for their employees.
Some of these plans have assets servicing them, but severance indemnities, as an unfunded obligation, do
not.
These plans are valued on an actuarial basis to express the present value of the benet payable at the end of
service that employees have accrued at the reporting date.
The amounts of the obligations and assets to which they refer are set out below:
Provision for severance indemnities:
Movements in the year are summarized below:
Net cost charged to income 2021 2020 Change
Current service cost 157 164 (7)
Interest cost on dened benet obligation 47 79 (32)
Total 204 243 (39)
Change in present value of obligations 31.12.2021 31.12.2020 Change
Present value at 1 January 9,761 10,108 (347)
Current service cost 157 164 (7)
Utilization of provision (664) (436) (228)
Interest cost on obligation 47 79 (32)
Actuarial gains & losses recognized in the
comprehensive income statement
600 (154) 754
Present value at reporting date 9,901 9,761 140
Group annual report and nancial statements -
Explanatory notes
113De’ Longhi Group
The assumptions used for determining the obligations under the plans described are as follows:
Assumptions used
Severance
indemnity 2021
Severance
indemnity 2020
Other plans
2021
Other plans
2020
Discount rate 0.90% 0.50% 0.2% - 1.18% 0.6% - 0.75%
Future salary increases 1.5% - 2.5% 0.5% - 1.5% 0.0% - 3% 0.0% - 3%
Ination rate 1.50% 0.50% 0.0% - 1.8% 0.0% - 1.5%
“Other long-term benets” includes the amount accrued for the incentive plan 2021-2023 in the reporting
period of €11,304 thousand. This plan was approved by the Board of Directors for the Chief Executive Ocer
of De’Longhi S.p.A. and a limited number of Group executives and key resources.
It also includes the incentive plans for the personnel of the newly acquired companies.
For more information please refer to the Annual Remuneration Report.
36. Other provisions for non-current contingencies and charges
These are analyzed as follows:
31.12.2021 31.12.2020 (*)
Agents’ leaving indemnity provision 1,909 1,577
Product warranty provision 42,585 34,564
Provision for contingencies and other charges 21,549 23,492
Total 66,043 59,633
Movements are as follows:
31.12.2020
(*)
Utilization Net accrual
Translation
difference
and other
movements
Changes in
consolidation
area
31.12.2021
Agents’ leaving
indemnity provision
1,577 (125) 457 - - 1,909
Product warranty
provision
34,564 (16,336) 23,381 666 310 42,585
Provision for contingen
-
cies and other charges
23,492 (3,110) (4) 1,171 - 21,549
Total 59,633 (19,571) 23,834 1,837 310 66,043
(*) The comparison gures at 31.12.2020 were restated as described in the section “Restatement of comparison gures”.
The agents’ leaving indemnity provision covers the payments that might be due to departing agents in ac-
cordance with art. 1751 of the Italian Civil Code, as applied by collective compensation agreements in force.
Dened benet plans:
Movements in the year are as follows:
Net cost charged to income 2021 2020 Change
Current service cost 1,057 1,177 (120)
Return on plan assets (1) 6 (7)
Interest cost on obligation 162 236 (74)
Total 1,218 1,419 (201)
Change in present value of obligations 31.12.2021 31.12.2020 Change
Present value at 1 January 28,125 25,004 3,121
Net cost charged to income 1,218 1,419 (201)
Benets paid (197) (242) 45
Translation differences 6 (121) 127
Actuarial gains & losses recognized in the
comprehensive income statement
(3,657) 2,065 (5,722)
Changes in consolidation area 1,608 - 1,608
Present value at reporting date 27,103 28,125 (1,022)
The outstanding liability at 31 December 2021 of €27,103 thousand (€28,125 thousand at 31 December
2020) refers to a few subsidiaries (mainly in Germany and Japan).
Group annual report and nancial statements -
Explanatory notes
114De’ Longhi Group
39. Other payables
These are analyzed as follows:
31.12.2021 31.12.2020
Employees 69,134 50,307
Indirect taxes 29,562 29,692
Social security institutions 9,965 9,761
Withholdings payables 9,380 7,733
Advances 7,517 4,143
Other taxes 1,636 946
Other 12,883 11,629
Total 140,077 114,211
There were no material amounts due beyond 12 months at 31 December 2021.
40. Commitments
These are detailed as follows:
31.12.2021 31.12.2020
Guarantees given to third parties 806 1,670
Other commitments 3,590 4,229
Total 4,396 5,899
“Other commitments” mainly consist of contractual obligations pertaining to the subsidiaries.
In addition to the above, the Group issued guarantees, for a total amount of €14 million, in favor of the ali-
ate NPE S.r.l. commensurated with the commitments of each of the parties.
The product warranty provision has been established for certain consolidated companies, on the basis of
estimated under‐warranty repair and replacement costs for sales taking place by 31 December 2021. It
takes account of the provisions of Decree 24/2002 and of European Community law and / or other local
regulations, where present.
The “Provision for contingencies and other charges” includes the provision of €15,053 thousand (€14,623
thousand at 31 December 2020) for legal disputes and product complaint liabilities (limited to the Group’s
insurance deductible), the provision of €6,497 thousand (€8,869 thousand at 31 December 2020) made by a
few subsidiaries relating to commercial risks and other charges.
37. Trade payables
The balance represents the amount owed by the Group to third parties for the provision of goods and servic-
es. The item does not include amounts due beyond 12 months.
38. Current tax liabilities
“Current tax liabilities” refers to the Group’s direct tax and, with respect to the Italian subsidiaries who ad-
hered to the Domestic Tax Consolidation regime, the net amount owed the parent company DeLonghi In-
dustrial S.A..
The Parent Company De’Longhi S.p.A. and a few of the Italian subsidiaries renewed, jointly with the consoli-
dator DeLonghi Industrial S.A., the option to adhere to group taxation, referred to as “Domestic Tax Consoli-
dation”, as permitted under articles 117-129 of the Consolidated Income Tax Act (TUIR) as per Presidential
Decree n. 917 of 22 December 1986 and Decree of the Ministry and Finance of 9 June 2004, for the three-
year period 2019 - 2021.
For additional information please refer to Appendix.3.
Group annual report and nancial statements -
Explanatory notes
115De’ Longhi Group
at 31 December 2021
Assets
Total Value Amortized cost Fair value in Prot&Loss Fair value in OCI
Non-current assets (*)
Equity investments 51 - 51 -
Receivables 4,605 4,605 - -
Other non‐current nancial assets 70,539 70,223 - 316
Current assets (**)
Trade receivables 366,668 366,668 - -
Current tax assets 9,492 9,492 - -
Other receivables 43,148 43,148 - -
Current nancial receivables and assets 301,712 200,122 94,665 6,925
Cash and cash equivalents 1,026,081 1,026,081 - -
at 31 December 2021
Liabilities
Total Value Amortized cost Fair value in Prot&Loss Fair value in OCI
Non‐current liabilities (***)
Bank loans and borrowings (long‐term portion) 357,457 357,457 - -
Other nancial payables (long‐term portion) 257,535 257,535 - -
Current liabilities (****)
Trade payables 936,229 936,229 - -
Bank loans and borrowings (short‐term portion) 221,691 221,691 - -
Other nancial payables (short‐term portion) 51,860 44,549 5,995 1,316
Current tax liabilities 120,900 120,900 - -
Other payables 140,077 140,077 - -
41. IFRS 7 classication of nancial as-
sets and liabilities
Financial assets and liabilities are classied below
in accordance with IFRS 7 using the categories
identied in IFRS 9.
(*) Interests in subsidiaries, associates and joint ventures
are not included (IFRS 9 - 2.1 a).
(**) The lease prepayments subject to the application of
IFRS 16 Leases (IFRS 9 - 2.1 b) are excluded.
(***) Lease liabilities under IFRS 16 (IFRS 9.-2.1b) and for-
ward contracts that will result in an acquisition to be
considered as a business combination within the scope
of IFRS 3 Business combination are not included (IFRS 9
- 2.1 f).
(****) Lease liabilities to which IFRS 16 Leases is applied (IFRS
9 - 2.1 b) are not included.
Group annual report and nancial statements -
Explanatory notes
116De’ Longhi Group
(*) Interests in subsidiaries, associates and joint ventures
are not included (IFRS 9 - 2.1 a).
(**) The lease prepayments subject to the application of
IFRS 16 Leases (IFRS 9 - 2.1 b) are excluded.
(***) Lease liabilities under IFRS 16 (IFRS 9.-2.1b) and for-
ward contracts that will result in an acquisition to be
considered as a business combination within the scope
of IFRS 3 Business combination are not included (IFRS 9
- 2.1 f).
(****) Lease liabilities to which IFRS 16 Leases is applied (IFRS
9 - 2.1 b) are not included.
at 31 December 2020
Assets
Total Value Amortized cost Fair value in Prot&Loss Fair value in OCI
Non-current assets (*)
Equity investments 51 - 51 -
Receivables 4,480 4,480 - -
Other non‐current nancial assets 69,986 69,986 - -
Current assets (**)
Trade receivables 397,337 397,337 - -
Current tax assets 6,541 6,541 - -
Other receivables 30,118 30,118 - -
Current nancial receivables and assets 242,613 192,001 44,463 6,150
Cash and cash equivalents 662,947 662,947 - -
at 31 December 2020
Liabilities
Total Value Amortized cost Fair value in Prot&Loss Fair value in OCI
Non‐current liabilities (***)
Bank loans and borrowings (long‐term portion) 330,012 330,012 - -
Other nancial payables (long‐term portion) 129,330 128,719 - 611
Current liabilities (****)
Trade payables 582,193 582,193 - -
Bank loans and borrowings (short‐term portion) 132,867 132,867 - -
Other nancial payables (short‐term portion) 81,919 69,572 3,755 8,593
Current tax liabilities 66,498 66,498 - -
Other payables 114,211 114,211 - -
Group annual report and nancial statements -
Explanatory notes
117De’ Longhi Group
42. Hierarchical levels of nancial instruments measured at fair value
The following table presents the hierarchical levels in which the fair value measurements of nancial instru-
ments have been classied at 31 December 2021. As required by IFRS 13, the hierarchy comprises the fol-
lowing levels:
• level 1: quoted prices in active markets for identical assets or liabilities;
• level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly;
• level 3: inputs for the asset or liability that are not based on observable market data.
Financial instruments measured at fair value Level 1 Level 2 Level 3
Derivatives with positive fair value - 11,378 -
Derivatives with negative fair value - (7,311) -
Other nancial assets 51 90,528 -
There were no transfers between the levels during the year.
43. Risk management
The Group is exposed to the following nancial risks as part of its normal business activity:
• credit risk, arising from commercial activities and from the investment of surplus cash;
• liquidity risk, arising from the need to have adequate access to capital markets and sources of nance to
fund its operations, investment activities and the settlement of nancial liabilities;
• exchange rate risk, associated with the signicant amount of purchases and sales in currencies other
than the Group’s functional currency;
• interest rate risk, relating to the cost of the Group’s debt.
Credit risk
Credit risk consists of the Group’s exposure to potential losses arising from failure by a counterparty to fulll
its obligations.
Trade credit risk is associated with the normal conduct of trade and is monitored using formal procedures
for selecting and assessing customers, for dening credit limits, for monitoring expected receipts and for
their recovery if necessary.
Credit risk is mitigated by insurance policies with major insurers, with the aim of insuring against the risk of
default by punctually performing a selection of a portfolio of customers together with the insurer, who then
undertakes to pay an indemnity in the event of default.
Although there is a certain concentration of risk associated with the size of some of the principal buying
groups, this is counterbalanced by the fact that the exposure is spread across counterparties operating in
different geographical areas.
Positions are written down when there is objective evidence that they will be partially or entirely uncollected;
such writedowns are based on past data and information about the counterparty’s solvency, taking account
of insurance and any other guarantees as described above.
The Group’s maximum exposure to credit risk is equal to the book value of trade receivables before the al-
lowance for doubtful accounts, and amounts to €381,933 thousand at 31 December 2021 and € 407,898
thousand at 31 December 2020.
This amount corresponds to the gross balance of trade receivables of €448,864 thousand at 31 December
2021 (€461,960 thousand at 31 December 2020), net of deductions and accounting offsets, which reduce
the overall credit risk, mainly in the form of credit notes and other documents not yet issued to customers.
The following analysis of credit risk, carried out on the basis of receivables ageing and the reports used for
credit management, refers to the trade balances before these deductions because the documents still to be
issued cannot be specically allocated to the ageing categories.
Trade receivables of €448,864 thousand at 31 December 2021 comprise €412,119 thousand in current bal-
ances and €36,745 thousand in past due amounts, of which €35,701 thousand past due within 90 days and
€1,044 thousand past due by more than 90 days.
The amount of insured or guaranteed receivables at 31 December 2021 is €363,522 thousand.
The Group has recognized €15,265 thousand in allowances for doubtful accounts against unguaranteed re-
ceivables of €85,341 thousand.
Trade receivables of €461,960 thousand at 31 December 2020 comprise €429,700 thousand in current bal-
ances and €32,260 thousand in past due amounts, of which €31,873 thousand past due within 90 days and
€387 thousand past due by more than 90 days.
The amount of insured or guaranteed receivables at 31 December 2021 is €317,994 thousand.
The Group has recognized €10,561 thousand in allowances for doubtful accounts against unguaranteed re-
ceivables of €143,966 thousand.
As far as nancial risk is concerned, it is the Group’s policy to maintain a suciently large portfolio of coun-
terparties of high international repute for the purposes of temporary investment of surplus resources or for
the negotiation of derivatives.
The maximum credit risk in the event of counterparty default relating to the Group’s other nancial assets,
whose classication is presented in note 41. IFRS 7 classication of nancial assets and liabilities, is equal
to the book value of these assets.
Group annual report and nancial statements -
Explanatory notes
118De’ Longhi Group
Liquidity risk
Liquidity risk is the risk of not having the fund
needed to full payment obligations arising from
operating and investment activities and from the
maturity of nancial instruments.
The Group uses specic policies and procedures
for the purposes of monitoring and managing this
risk, including:
• centralized management of nancial payables
and cash, supported by reporting and informa-
tion systems and, where possible, cash pooling
arrangements;
• raising of medium and long‐term nance on cap-
ital markets;
• diversication of the type of nancing instru-
ments used;
• obtaining of short‐term credit lines so as to
ensure wide room for manoeuvre for the purpos-
es of managing working capital and cash ows;
• monitoring of current and forecast nancing
needs and distribution within the Group.
The Group has both medium‐term bank credit lines
(related to the loans disclosed in this Financial
Statements) and short‐term credit lines (typically
renewed on an annual basis), for nancing working
capital and other operating needs (issue of guaran-
tees, currency transactions etc.).
These credit lines, along with cash ow generated
by operations, are considered sucient to satisfy
the Group’s annual funding requirements for work-
ing capital, investments and settlement of paya-
bles on their natural due dates.
Note 41. IFRS 7 classication of nancial assets
and liabilities presents the book value of nancial
assets and liabilities, in accordance with the cate-
gories identied by IFRS 9.
The following table summarizes the due dates of
the Group’s nancial liabilities at 31 December
2021 and 31 December 2020 on the basis of con-
tractual payments which have not been
discounted.
(*) The comparison gures at 31.12.2020 were restated as
described in the section “Restatement of comparison
gures”.
(**) The corresponding balance reported in the nancial
statements was €579,148 thousand at 31 December
2021 vs. €462,879 thousand at 31 December 2020 and
refers to medium/long and short term bank debt.
(***) The corresponding balance in the accounts is €309,395
thousand at 31 December 2021 and €211,251 thousand
at 31 December 2020 and refers to long-term payables
comprehensive of the short-term portion of the private
placement.
Undiscounted
cash ows at
31.12.2021
Payable
within one
year
Payable in
1-5 years
Payable in
more than
ve years
Undiscounted
cash ows at
31.12.2020 (*)
Payable
within one
year
Payable in
1-5 years
Payable in
more than
ve years
Bank loans and borrowings (**) 580,461 222,244 358,217 - 466,523 134,092 332,431 -
Other nancial payables (***) 340,734 55,196 97,117 188,420 219,934 84,218 92,153 43,563
Trade payables 936,229 936,229 - - 582,193 582,193 - -
Current tax payables and other
payables
260,977 260,718 259 - 180,709 180,465 244 -
Group annual report and nancial statements -
Explanatory notes
119De’ Longhi Group
With regard to lease liabilities in accordance with
IFRS 16, please refer to Note 15. Leases.
Exchange rate risk
In carrying on its business, the Group is exposed to
the risk of uctuations in currencies (other than its
functional one) in which ordinary trade and nan-
cial transactions are denominated. For the purpos-
es of protecting its income statement and state-
ment of nancial position from such uctuations,
the Group adopts a suitable hedging policy that es-
chews speculative ends.
Hedging policies
Hedging is carried out centrally by a special team
on the basis of information obtained from a de-
tailed reporting system, using instruments and pol-
icies that comply with international accounting
standards. The purpose of hedging is to protect ‐ at
individual company level ‐ the future revenues/
costs contained in budgets and/or long‐term plans,
trade and nancial receivables/payables and net
investments in foreign operations.
Purpose of hedging
Hedging is carried out with three goals:
a. to hedge cash ows of budgeted or planned
amounts up until the time of invoicing, with a
time horizon that doesn’t go beyond 24 months;
b. to hedge the monetary amounts of receivables
and payables originating from invoicing and -
nancing transactions;
c. to hedge exchange rate risk relating to net in-
vestments in foreign operations.
The principal currencies to which the Group is ex-
posed are:
• the US dollar (mainly the EUR/USD and GBP/
USD), being the currency in which a signicant
part of the cost of raw materials, parts and n-
ished products is expressed;
• the Japanese yen (JPY/HKD), for sales on the
Japanese market;
• the Australian dollar (AUD/HKD) for sales on the
Australian market;
• the Russian Ruble, the Czech koruna and the
Polish Zloty, for sales on the East Europe market;
• the British Pound (EUR/GBP), for sales on the UK
market;
• the Renminbi (CNY/HKD) for the cost of raw ma-
terials, parts and nished products.
Instruments used
Highly liquid instruments of a non‐speculative
nature are used, mostly forward purchase/sale
agreements.
The transactions are entered into with primary, well
known counterparties of international standing and
using methods which allow for best practice execu-
tion for each transaction.
Operating structure
Hedging activity is centralized (except for isolated,
negligible cases) under De’Longhi Capital Services
S.r.l., a Group company, which intervenes on the
markets on the basis of information received from
the individual operating companies. The terms and
conditions thus negotiated are passed down in full
to Group companies so that De’Longhi Capital Ser-
vices S.r.l. does not directly carry derivatives for
risks that are not its own.
Sensitivity analysis
When assessing the potential impact, in terms of
change in fair value, of a hypothetical, sudden
+/‐5% change in year‐end exchange rates, it is nec-
essary to distinguish between the risk associated
with expected future revenues/costs and the risk
associated with foreign currency assets and liabili-
ties at 31 December 2021:
a. with regard to the risk connected to future ows
(revenues/costs forecast in the budget and/or
multi-year plans), at 31 December 2021 the fair
value of the relative hedges were recognized in
net equity in accordance with IAS standards as
described in the section Accounting standards -
Financial instruments found in these Explanato-
ry Notes; a change of +/- 5% in the year-end ex-
change rates of the exposed currency is
estimated to produce a change of +/ - €1.2 mil-
lion before tax (+/- €2.8 million before tax at 31
December 2020). This gure would impact the
income statement solely in the year in which the
hedged revenues/costs materialize;
b. as for the risk associated with foreign currency
assets and liabilities, the analysis considers
only unhedged receivables/payables in curren-
cies other than the functional currency of the in-
dividual companies, since the impact of any
hedges is assumed to be equal and opposite to
that of the hedged items. A +/‐ 5% change in
year‐end exchange rates of the principal ex-
posed currencies (mainly the USD and the Ren-
minbi) against the principal functional curren-
cies would produce a change in fair value of
around +/‐ €2.2 million before tax (+/‐ €1.1 mil-
lion before tax at 31 December 2020).
The hedging transactions at 31 December 2021 are
described in the paragraph “Interest rate and cur-
rency exchange hedges at 31 December 2021”.
Interest rate risk
The Group is exposed to interest rate risk on oat-
ing rate loans and borrowings. This risk is managed
centrally by the same team that manages currency
risks.
The bonds and two bilateral loans taken out be-
tween 2019 and 2021 are xed rate, while the re-
mainder of the Group’s nancial debt at 31 Decem-
ber 2021 is oating rate.
The purpose of interest rate risk management is to
assess the mismatch between nancial assets and
liaiblities and verify that there are no relevant gaps
such that could impact the cost of funding if the
yield curve were to steepen.
At 31 December 2021 there were three Interest
Rate Swaps (IRS) hedging interest rate risk in loans
taken out by the Parent Company.
Sensitivity analysis
When estimating the potential impact of a hypo-
thetical, sudden material change in interest rates
(+/- 1% in market rates) on the cost of the Group’s
debt, only those items forming part of net nancial
position which earn/incur interest at oating rates
have been considered and not any others (meaning
total net assets of €636.9 million on a total of
€425.2 million in net debt at 31 December 2021
and total net assets of €279.2 million on a total of
€232.0 million in net debt in 2020).
It is estimated that a +/‐ 1% change in interest rates
would have an impact of +/- €6.4 million before tax
at 31 December 2021 recognized entirely in the
income statement (+/‐ €2.8 million before tax at 31
December 2020).
Group annual report and nancial statements -
Explanatory notes
120De’ Longhi Group
Interest rate and currency exchange hedges at 31 December 2021
At 31 December 2021 the Group has a number of derivatives, hedging both the fair value of underlying in-
struments and exposure to changes in cash ow.
For accounting purposes, derivatives that hedge expected future cash ow are treated in accordance with
hedge accounting as called for in IFRS 9.
Derivatives that hedge foreign currency payables and receivables are reported with changes in their fair
value reported in the income statement. These instruments offset the risk on the hedged item (which is a
recognized asset or liability).
The fair value of the outstanding derivatives at 31 December 2021 is provided below:
Fair Value at 31/12/2021
FX forward agreements (1,866)
Derivatives hedging foreign currency receiva-
bles/payables
(1,866)
FX forward agreements 5,885
IRS hedging Parent Company’s loans 55
Derivatives covering expected cash ows 5,940
Total fair value of the derivatives 4,074
Forward agreements to hedge against a change in 2021 trade ows:
A list of the forward agreements hedging a change in 2021 trade ows at 31 December 2021:
Currency
Notional amount (in thousands of risk currency) Fair value (in €/000)
Purchases Sales Total Current assets
Current
Liabilities
EUR/CHF* - 16,900 16,900 - (741)
EUR*/RON - 78,000 78,000 180 (106)
EUR/USD* (93,448) - (93,448) 2,257 (39)
EUR/CZK* - 140,000 140,000 - (126)
EUR/GBP* - 400 400 - (23)
GBP/USD* (8,500) - (8,500) 174 -
USD/CAD* - 22,000 22,000 393 -
HKD/CNY* (655,000) - (655,000) 3,116 -
AUD*/HKD - 48,000 48,000 741 (5)
HKD/JPY* - 150,000 150,000 64 -
6,925 (1,040)
* Risk currency.
Group annual report and nancial statements -
Explanatory notes
121De’ Longhi Group
Hedges against foreign currency receivables and payables:
Currency
Notional amount (in thousands of risk currency) Fair value (in €/000)
Purchases Sales Total Current assets Current Liabilities
AUD*/HKD - 72,300 72,300 - (568)
AUD/NZD* - 6,730 6,730 26 (16)
EUR/AUD* (200) 1,600 1,400 2 (16)
EUR/CHF* (7,000) 49,651 42,651 66 (1,981)
EUR/CZK* - 1,304,800 1,304,800 - (688)
EUR/GBP* (4,387) 5,337 950 111 (15)
EUR*/GBP (12,290) 11,975 (315) 246 (193)
EUR/HKD* (13,990) - (13,990) 9 (4)
EUR*/HKD (41,451) 265,950 224,499 9 (28)
EUR/HUF* (252,852) 1,992,852 1,740,000 48 (22)
EUR/JPY* - 23,000 23,000 1 -
EUR/PLN* (6,400) 159,400 153,000 2 (336)
EUR/RON* - 600 600 - -
EUR*/RON (38,000) 15,200 (22,800) 13 (118)
EUR/RUB* - 5,475,700 5,475,700 1,144 -
EUR/SEK* (11,800) 42,200 30,400 8 (5)
EUR/USD* (110,850) 5,000 (105,850) 7 (1,219)
EUR*/USD (280,000) 281,700 1,700 1,137 -
GBP/USD* (20,280) 19,400 (880) 254 (355)
HKD/CLP* - 4,364,000 4,364,000 39 -
HKD/CNH* (895,800) 14,000 (881,800) 209 (14)
HKD/JPY* - 5,039,000 5,039,000 535 -
HKD/KRW* (2,475,000) 9,768,000 7,293,000 83 (5)
HKD/MXN* - 52,700 52,700 - (66)
USD/MXN* - 137,500 137,500 - (171)
SGD*/HKD (7,000) 250 (6,750) 52 (2)
USD/CAD* (4,250) 35,250 31,000 89 (60)
USD*/RON (26,450) 8,000 (18,450) - (107)
USD/ZAR* (18,100) 83,650 65,550 47 (14)
4,137 (6,003)
* Risk currency.
A positive cash ow hedge reserve of €3,772 thousand has been recorded in net equity at 31 December
2021 in relation to these hedges, after €1,026 thousand in related tax (at 31 December 2020 this same re-
serve was a negative €2,537 thousand, after the related tax of €930 thousand).
During 2021 the Group reversed to the income statement a net amount of €2,357 thousand from the nega-
tive cash ow hedge reserve at 31 December 2020.
This amount was reported in the following lines of the income statement:
2021 2020
Increase (reduction) in revenues (2,003) (725)
(Increase) reduction in materials consumed (1,464) (82)
Net nancial income (expenses) - (9)
Taxes 930 207
Total recognized in income statement (2,537) (609)
Group annual report and nancial statements -
Explanatory notes
122De’ Longhi Group
IRS (Interest Rate Swap) hedging interest rate risk on loans:
The fair value of the derivatives is calculated using the discounted cash ow method based on the swap
curve, not including the spread; at 31 December 2021 the fair value of the derivatives, which also takes into
account counterparty risk in accordance with IFRS 13 - Fair Value measurement, came to a positive €55
thousand which is recognized under nancial receivables (€316 thousand) and under other nancial paya-
bles (€261 thousand).
As the hedge on future interest ows qualies as an effective hedge, at 31 December 2021 a positive cash
ow hedge reserve of €123 thousand was reported in net equity, net of the related tax effect of €30
thousand.
Details are as follows (the gures are shown before tax):
31/12/2021
Notional amount
(in €/000)
Fair value (in €/000)
Interest Rate Swap (IRS) connected to the loan
Intesa Sanpaolo S.p.A
78,000 174
Interest Rate Swap (IRS) connected to the loan
Intesa Sanpaolo S.p.A
9,500 (30)
Interest Rate Swap (IRS) connected to the loan
Unicredit S.p.A.
75,000 (89)
Total fair value of the derivatives 55
of which:
positive medium/long-term fair value 316
negative short-term fair value (261)
44. Tax position
No positions of note were opened at the date of this report.
The position of De’Longhi Appliances S.r.l., already described in the 2020 Annual Report, was presented to the
tax dispute resolution services provided under Italian law which did not have a signicant impact on the year.
45. Transactions and balances with related parties
Appendix 3 contains the information concerning transactions and balances with related parties required by
CONSOB Circulars 97001574 dated 20 February 1997, 98015375 dated 27 February 1998 and DEM/2064231
dated 30 September 2002 relating to related party transactions; all transactions fell within the Group’s
normal scope of operations and were settled under arm’s-length terms and conditions.
Transactions and balances between the parent company and subsidiaries are not reported since these have
been eliminated upon consolidation.
46. Operating segments
As required under IFRS 8, following the demerger transaction the Group’s activities were broken down into
three operating segments (Europe, Americas/APA, MEIA) based on business region.
Each segment is responsible for all aspects of the Group’s brands and services different markets; the reve-
nues and the margins, therefore, generated by each operating segment (based on business region) may not
coincide with the revenues and margins of the relative markets (based on geographic area) given the sales
made by a few Group companies outside of their respective geographical areas and the intragroup transac-
tions not allocated based on destination.
Information relating to operating segments is presented below:
Income Statement data
2021
Europe
Americas/
APA
MEIA
Intersegment
eliminations
(**)
Total
Total revenues (*) 2,350,469 1,738,602 149,078 (1,016,562) 3,221,587
EBITDA 311,656 157,321 10,442 1,190 480,609
Amortization (64,113) (29,268) (298) - (93,679)
EBIT 247,543 128,053 10,144 1,190 386,930
Net nancial income
(expenses)
13,321
Prot (loss) before taxes 400,251
Taxes (88,502)
Prot (loss) for the year 311,749
Prot (loss) pertaining to
minority
651
Prot (loss) pertaining to
Group
311,098
(*) The revenues for each segment include revenues generated by both third parties and other Group operating segments.
(**) Eliminations refer to intersegment revenues generated and eliminated on a consolidated basis.
Group annual report and nancial statements -
Explanatory notes
123De’ Longhi Group
Data from statement of nancial position
31 December 2021
Europe
Americas/
APA
MEIA
Intersegment
eliminations
Total
Total assets 2,908,290 1,598,327 76,324 (652,040) 3,930,901
Total liabilities (1,967,042) (1,013,106) (32,198) 652,040 (2,360,306)
Income Statement data
2020
Europe
Americas/
APA
MEIA
Intersegment
eliminations
(**)
Total
Total revenues (*) 1,847,472 1,167,225 102,788 (766,228) 2,351,257
EBITDA 232,834 101,397 8,227 541 342,999
Amortization (60,381) (20,237) (375) - (80,993)
EBIT 172,453 81,160 7,852 541 262,006
Net nancial income
(expenses)
(5,692)
Prot (loss) before taxes 256,314
Taxes (56,181)
Prot (loss) for the year 200,133
(*) The revenues for each segment include revenues generated by both third parties and other Group operating segments; the gure
is net of other non-recurring items.
(**) Eliminations refer to intersegment revenues generated and eliminated on a consolidated basis.
Dati patrimoniali
31 December 2020 (*)
Europe
Americas/
APA
MEIA
Intersegment
eliminations
Total
Total assets 2,086,853 1,311,473 49,005 (501,762) 2,945,569
Total liabilities (1,352,737) (817,148) (10,090) 501,760 (1,678,215)
(*) The comparison gures at 31.12.2020 were restated as described in the section “Restatement of comparison gures”.
47. Subsequent events
Subsequent to 31 December 2021 through the ap-
proval date of this report, no signicant events oc-
curred which would have impacted the nancial
and economic results shown pursuant to IAS 10
Events after the reporting period.
With regard to the international scenario, in the rst
few months of 2022 the European geopolitical situ-
ation gradually took a turn for the worse. The rapid
escalation of the tensions between Russia and
Ukraine has given rise to concerns, rst of all, about
the safety of everyone, all the employees and their
families and, secondly, the economic situation in
these markets.
Based on 2021 gures, approximately 5% of the
Group’s total consolidated revenue was generated
in Russia and Ukraine.
The Group has taken the steps necessary to ensure
the safety of the personnel at the Ukraine branch,
facilitating the relocation of employees to other
Group branches, guaranteeing payment of salaries
and adequate nancial and medical assistance for
all employees and their families.
The worsening of the situation in the last few
weeks has blocked the commercial branch’s activi-
ties and puts the recoverability of company assets,
receivables with local retailers (including in light of
the lack of insurance) and inventory at risk.
With regard to the Group’s main assets in Russia -
trade receivables and inventory - no critical areas
have emerged. Most of the trade receivables are
covered by insurance policies stipulated with a pre-
miere international insurance company and to date
the exposure is very limited thanks to the payments
received already. The delivery of products already
in the local warehouse continued and more strin-
gent receivables management measures were
adopted.
To date new deliveries to Russia, as well as all the
investments and projects in the pipeline, have been
blocked.
The Group is carrying out a series of assessments
in order to estimate the possible perspective eco-
nomic and nancial impact of a scenario that today
is entirely uncertain for both the commercial and
global markets.
During a meeting held today, the Board of Directors
approved a donation of €1 million in favour of NGO
partners, in support of the populations affected by
the conict in Ukraine.
Lastly, with regard to the production, in February
2022 a new plant was acquired in Romania which
will be added to the two existing facilities. Such in-
vestment is part of the production capacity expan-
sion plans intended to support the organic growth
of the Group.
Other than the above, no other signicant events
occurred after the close of the year.
Treviso 10 March 2022
De’Longhi S.p.A.
The Chief Executive Ocer
Massimo Garavaglia
Appendices
Group
annual
report and
nancial
statements
Group annual report and nancial statements -
Appendices
125De’ Longhi Group
A
Appendices
ese appendices contain additional information to that reported in the explanatory notes, of
which they form an integral part.
This information is contained in the following appendices:
1. List of consolidated companies
2. Statement of consolidated cash ows in terms of net nancial position
3. Transactions and balances with related parties:
a. Income statement and statement of nancial position
b. Summary by company
4. Fees paid to the external auditors
5. Certication of the consolidated nancial statements pursuant to art. 81‐ter of CONSOB Regulation
11971 dated 14 May 1999 and subsequent amendments and additions.
Group annual report and nancial statements -
Appendices
126De’ Longhi Group
List of consolidated companies
(Appendix 1 to the Explanatory notes)
Company name Registered oce Currency Share capital (1)
Interest held at 31/12/2021
Directly Indirectly
Line-by-line method
DE’LONGHI APPLIANCES S.R.L. Treviso EUR 200,000,000 100%
DE’LONGHI AMERICA INC. Upper Saddle River USD 600,000 100%
DE’LONGHI FRANCE S.A.R.L. Clichy EUR 2,737,500 100%
DE’LONGHI CANADA INC. Brampton CAD 1 100%
DE’LONGHI DEUTSCHLAND GMBH Neu-Isenburg EUR 2,100,000 100%
DE’LONGHI BRAUN HOUSEHOLD GMBH Neu-Isenburg EUR 100,000 100%
DE’LONGHI ELECTRODOMESTICOS ESPANA S.L. Barcellona EUR 3,066 100%
DE’LONGHI CAPITAL SERVICES S.R.L. (2) Treviso EUR 53,000,000 11% 89%
E- SERVICES S.R.L. Treviso EUR 50,000 100%
DE’LONGHI KENWOOD A.P.A. LTD Hong Kong HKD 73,010,000 100%
TRICOM INDUSTRIAL COMPANY LIMITED Hong Kong HKD 171,500,000 100%
PROMISED SUCCESS LIMITED Hong Kong HKD 28,000,000 100%
ON SHIU (ZHONGSHAN) ELECTRICAL APPLIANCE CO.LTD. Zhongshan City CNY USD 21,200,200 100%
DE’LONGHI-KENWOOD APPLIANCES (DONG GUAN) CO.LTD. Qing Xi Town CNY HKD 285,000,000 100%
DE LONGHI BENELUX S.A. Luxembourg EUR 181,730,990 100%
DE’LONGHI JAPAN CORPORATION Tokyo JPY 450,000,000 100%
DE’LONGHI AUSTRALIA PTY LTD. Prestons AUD 28,800,001 100%
DE’LONGHI NEW ZEALAND LTD. Auckland NZD 16,007,143 100%
ZASS ALABUGA LLC Elabuga RUB 95,242,767 100%
DE’LONGHI LLC Mosca RUB 3,944,820,000 100%
KENWOOD APPLIANCES LTD. Havant GBP 30,586,001 100%
KENWOOD LIMITED Havant GBP 26,550,000 100%
KENWOOD INTERNATIONAL LTD. Havant GBP 20,000,000 100%
KENWOOD APPL. (SINGAPORE) PTE LTD. Singapore SGD 500,000 100%
KENWOOD APPL. (MALAYSIA) SDN.BHD. Subang Jaya MYR 1,000,000 100%
DE’LONGHI-KENWOOD GMBH Wr Neudorf EUR 36,336 100%
DELONGHI SOUTH AFRICA PTY.LTD. Constantia Kloof ZAR 100,332,501 100%
DE’LONGHI KENWOOD HELLAS SINGLE MEMBER S.A. Atene EUR 452,520 100%
DE’LONGHI PORTUGAL UNIPESSOAL LDA Matosinhos EUR 5,000 100%
Group annual report and nancial statements -
Appendices
127De’ Longhi Group
Company name Registered oce Currency Share capital (1)
Interest held at 31/12/2021
Directly Indirectly
ARIETE DEUTSCHLAND GMBH Dusseldorf EUR 25,000 100%
CLIM.RE. S.A. Luxembourg EUR 1,239,468 4% 96%
ELLE S.R.L. Treviso EUR 10,000 100%
DE’LONGHI BOSPHORUS EV ALETLERI TICARET ANONIM SIRKETI Istanbul TRY 3,500,000 100%
DE’LONGHI PRAGA S.R.O. Praga CZK 200,000 100%
KENWOOD SWISS AG Baar CHF 1,000,000 100%
DL HRVATSKA D.O.O. Zagabria HRK 20,000 100%
DE’LONGHI BRASIL - COMÉRCIO E IMPORTAÇÃO LTDA São Paulo BRL 43,857,581 100%
DE’LONGHI POLSKA SP. Z.O.O. Varsavia PLN 50,000 0.1% 99.9%
DE’LONGHI APPLIANCES TECHNOLOGY SERVICES (SHENZEN) CO.LTD Shenzen CNY USD 175,000 100%
DE’LONGHI UKRAINE LLC Kiev UAH 549,843 100%
DE’LONGHI KENWOOD MEIA F.ZE Dubai USD AED 2,000,000 100%
DE’LONGHI ROMANIA S.R.L. Cluj-Napoca RON 140,000,000 10% 90%
DE'LONGHI KOREA LTD Seoul KRW 900,000,000 100%
DL CHILE S.A. Santiago del Cile CLP 3,079,065,844 100%
DE’LONGHI SCANDINAVIA AB Stockholm SEK 5,000,000 100%
DELONGHI MEXICO SA DE CV Bosques de las Lomas MXN 53,076,000 100%
TWIST LLC Mosca RUB 10,000 100%
DE’LONGHI APPLIANCES (SHANGHAI) CO. LTD Shanghai CNY USD 12,745,000 100%
DE' LONGHI MAGYARORSZÁG KFT. Budapest HUF 34,615,000 100%
DE' LONGHI US HOLDING LLC Wilmington USD 50,100,000 100%
Group annual report and nancial statements -
Appendices
128De’ Longhi Group
The list of the companies belonging to the Capital Brands Group acquired on 29 December 2020 is provided
below; all of the companies are indirectly controlled 100% by De’Longhi S.p.a.:
Company name Registered oce Currency
CAPITAL BRANDS HOLDINGS, INC. Wilmington USD
CAPITAL BAY, LIMITED (3) Hong Kong USD
CAPBRAN HOLDINGS, LLC Los Angeles USD
CAPITAL BRANDS, LLC Los Angeles USD
CAPITAL BRANDS DISTRIBUTION, LLC Los Angeles USD
BULLET BRANDS, LLC Los Angeles USD
HOMELAND HOUSEWARES, LLC Los Angeles USD
BACK IN FIVE, LLC Los Angeles USD
BULLET EXPRESS, LLC Los Angeles USD
YOUTHOLOGY RESEARCH INSTITUTE, LLC Los Angeles USD
BABY BULLET, LLC Los Angeles USD
NUTRIBULLET, LLC Los Angeles USD
NUTRILIVING, LLC Los Angeles USD
DESSERT BULLET, LLC Los Angeles USD
VEGGIE BULLET, LLC Los Angeles USD
NUTRIBULLET LEAN, LLC Los Angeles USD
NUTRIBLAST, LLC Los Angeles USD
The companies comprising the Eversys Group, the remaining 60% of which was acquired on 3 May 2021,
are listed below; the companies are controlled indirectly 100% by De’Longhi S.p.a., with the exception of
Eversys UK Limted and Eversys Ireland Limited, of which De’Longhi S.p.a. indirectly holds a stake of 51%:
Company name Registered oce Currency
EVERSYS HOLDING S.A. Sierre CHF
EVERSYS S.A. Sierre CHF
EVERSYS INC Toronto USD
EVERSYS INC DELAWARE Wilmington USD
EVERSYS UK LIMITED Wallington GBP
EVERSYS IRELAND LIMITED Dublin EUR
DELISYS AG Münsingen CHF
Group annual report and nancial statements -
Appendices
129De’ Longhi Group
Investments valued in accordance with the equity method
Company name Registered oce Currency Share capital (1)
Interest held at 31/12/2021
Directly Indirectly
DL-TCL HOLDINGS (HK) LTD. Hong Kong HKD USD 5,000,000 50%
TCL-DE’LONGHI HOME APPLIANCES (ZHONGSHAN) CO.LTD. Zhongshan City CNY USD 5,000,000 50%
NPE S.R.L. Treviso EUR 1,000,000 45%
H&T-NPE EAST EUROPE S.R.L. Madaras RON 14,707,600 45%
(1) Figures at 31 December 2021, unless otherwise specied.
(2) The articles of association, approved by the extraordinary shareholders’ meeting held on 29 December 2004, give special rights
to De’Longhi S.p.A. (holding 89% of the voting rights) for ordinary resolutions (approval of nancial statements, declaration of
dividends, nomination of directors and statutory auditors, purchase and sale of companies, grant of loans to third parties); voting
rights are proportional as far as other resolutions are concerned, except for the preferential right to receive dividends held by the
shareholder Kenwood Appliances Ltd.
(3) The company was ceased during 2021.
Group annual report and nancial statements -
Appendices
130De’ Longhi Group
Statement of consolidated cash ows
in terms of net nancial position
(Appendix 2 to the Explanatory notes)
(€/000) 2021 2020 (*)
Prot (loss) pertaining to the Group 311,098 200,133
Income taxes for the period 88,502 56,181
Amortization 93,679 80,992
Net change in provisions and other non-cash items 3,576 15,603
Cash ow generated by current operations (A) 496,855 352,909
Change in assets and liabilities for the period:
Trade receivables 47,954 45,087
Inventories (312,921) (67,370)
Trade payables 320,996 184,877
Other changes in net working capital 13,911 (6,785)
Payment of income taxes (64,187) (41,290)
Cash ow generated (absorbed) by movements in working capital (B)
5,753
114,519
Cash ow generated by current operations and movements in working capital (A+B)
502,608
467,428
Investment activities:
Investments in intangible assets (16,723) (14,652)
Other cash ows for intangible assets 978 793
Investments in property, plant and equipment (88,373) (66,609)
Other cash ows for property, plant and equipment 964 15
Investments in leased assets (30,018) (10,347)
Other cash ows for leased assets 891 1,548
Net investments in nancial assets and in minority interest (54) (264)
Cash ow absorbed by ordinary investment activities (C) (132,335) (89,516)
Cash ow by operating activities (A+B+C) 370,273 377,912
Acquisitions (D) (129,438) (333,308)
Fair value and cash ow reserves 9,605 (4,032)
Change in currency translation reserve 19,710 (16,505)
Purchase of treasury shares - (14,534)
Exercise of stock option 7,110 21,452
Dividends paid (80,821) (80,812)
Increase of minority interest 651 -
Cash ows absorbed by changes net equity (E) (43,745) (94,431)
Cash ow for the period (A+B+C+D+E) 197,100 (49,827)
Opening net nancial position 227,988 277,815
Cash ow for the period (A+B+C+D+E) 197,100 (49,827)
Consolidated closing net nancial position 425,088 227,988
(*) The comparison gures at 31.12.2020 were restated as
described in the section “Restatement of comparison
gures”.
Group annual report and nancial statements -
Appendices
131De’ Longhi Group
Transactions and balances with related parties
(Appendix 3 to the Explanatory notes)
(€/000) 2021 of which with 2020 of which
Revenue from contracts with customers 3,196,253 2,125 2,332,567 2,310
Other revenues 25,334 2,314 18,690 2,444
Total consolidated revenues 3,221,587 2,351,257
Raw and ancillary materials, consumables and goods (1,630,172) (51,996) (1,078,397) (35,514)
Change in inventories of nished products and work in
progress
254,836 41,191
Change in inventories of raw and ancillary materials,
consumables and goods
46,710 26,180
Materials consumed (1,328,626) (1,011,026)
Payroll costs (385,972) (301,042)
Services and other operating expenses (997,413) (1,145) (674,140) (941)
Provisions (28,967) (22,050)
Amortization (93,679) (80,993)
EBIT 386,930 262,006
Net nancial income (expenses) 13,321 (244) (5,692) (178)
Prot (loss) before taxes 400,251 256,314
Taxes (88,502) (56,181)
Consolidated prot (loss) 311,749 200,133
Prot (loss) pertaining to minority 651 -
Consolidated prot (loss) after taxes 311,098 200,133
Group annual report and nancial statements -
Appendices
132De’ Longhi Group
ASSETS
(€/000)
31.12.2021
of which
with related
parties
31.12.2020
(*)
of which
with related
parties
Non-current assets
Intangible assets 867,877 686,781
- Goodwill 358,405 257,544
- Other intangible assets 509,472 429,237
Property, plant and equipment 388,478 322,764
- Land, property, plant and machinery 178,946 138,517
- Other tangible assets 135,813 120,645
- Right of use assets 73,719 63,602
Equity investments and other nancial assets 82,475 104,539
- Equity investments 7,331 30,073
- Receivables 4,605 4,480
- Other non-current nancial assets 70,539 69,986
Deferred tax assets 74,297 58,455
Total non-current assets 1,413,127 1,172,539
Current assets
Inventories 769,253 432,105
Trade receivables 366,668 2,738 397,337 2,458
Current tax assets 9,492 6,541
Other receivables 43,148 376 30,118 281
Current nancial receivables and assets 302,077 243,005 15,814
Cash and cash equivalents 1,026,081 662,947
Total current assets 2,516,719 1,772,053
Non-current assets held for sale 1,055 977
Total assets 3,930,901 2,945,569
(*) The comparison gures at 31.12.2020 were restated as described in the section “Restatement of comparison gures”.
Net equity and liabilities
(€/000)
31.12.2021
of which
with related
parties
31.12.2020
(*)
of which
with related
parties
Net equity
Group portion of net equity 1,568,577 1,267,354
- Share Capital 226,344 225,823
- Reserves 1,031,135 841,398
- Prot (loss) pertaining to the Group 311,098 200,133
Minority interest 2,018
Total net equity 1,570,595 1,267,354
Non-current liabilities
Financial payables 681,020 507,335
- Banks loans and borrowings (long-term portion) 357,457 330,012
- Other nancial payables (long-term portion) 266,335 129,330
- Lease liabilities (long-term portion) 57,228 20,535 47,993 23,938
Deferred tax liabilities 70,070 56,440
Non-current provisions for contingencies and
other charges
119,421 110,921
- Employee benets 53,378 51,288
- Other provisions 66,043 59,633
Total non-current liabilities 870,511 674,696
Current liabilities
Trade payables 936,229 19,304 582,193 8,408
Financial payables 292,589 240,617
- Banks loans and borrowings (short-term portion) 221,691 132,867
- Other nancial payables (short-term portion) 51,860 89,572
- Lease liabilities (short-term portion) 19,038 3,636 18,178 3,555
Current tax liabilities 120,900 60,894 66,498 24,850
Other payables 140,077 114,211
Total current liabilities 1,489,795 1,003,519
Total net equity and liabilities 3,930,901 2,945,569
(*) The comparison gures at 31.12.2020 were restated as described in the section “Restatement of comparison gures”.
Group annual report and nancial statements -
Appendices
133De’ Longhi Group
Transactions and balances with related parties
Summary by company
In compliance with the guidelines and methods for identifying signicant transactions, especially those with
related parties covered by the De’Longhi S.p.A. rules on corporate governance, we shall now present the
following information concerning related party transactions during 2021 and related balances with mainly
commercial nature at 31 December 2021:
(€/million) Revenues Costs
Financial Income
(Expense)
Trade and other
receivables
Trade and other
payables
Financial payables
- IFRS 16
Related companies:
DL Radiators S.r.l. 2.7 - - 1.7 - -
TCL-De’Longhi Home Appliances (Zhongshan) Co.Ltd. - 24.8 - - 1.0 -
NPE S.r.l. 1.0 27.7 - 0.9 18.3 -
H&T EAST EUROPE SRL 0.1 - - 0.1 - -
Gamma S.r.l. 0.5 0.6 (0.2) 0.2 - 24.2
Eversys S.A. 0.1 - - - - -
DeLonghi Industrial S.A. - - - - 60.9 -
Other related parties - - - 0.2 - -
Total related parties 4.4 53.1 (0.2) 3.1 80.2 24.2
Following the application of IFRS 16 Leases, payables owed to Gamma S.r.l., along with the relative right-of-use assets, stemming
from the leases for two locations in Italy were recognized; interestexpenses owed for the period was also recognized.
The Parent Company De’Longhi S.p.A. and a few Italian subsidiaries adhered to the national tax consolidation regime (Presidential
Decree. n. 917/1986 - “TUIR”- articles 117 through 129, and Decree of 9.6.2004), as part of a tax group formed by DeLonghi Industrial
S.A.; the agreement entered into covers the three-year period 2019-2021 and may be renewed. The €60.9 million included in tax pay-
ables is comprised of the taxes payable by the members of the tax group through DeLonghi Industrial S.A..
The nancial receivables with Eversys Holding S.A. refer to the interest-bearing shareholders’ loan granted as per the agreements
signed.
Please refer to the yearly “Annual Remuneration Report ” for information relating to the compensation of directors and statutory
auditors.
Group annual report and nancial statements -
Appendices
134De’ Longhi Group
Fees paid to the external auditors
Disclosure pursuant to art. 149-duodecies
of the Consob Issuer Regulations
(Appendix 4 to the Explanatory notes - €/000)
Type of service Party performing the service Recipient Fees earned in 2021
Auditing
PwC S.p.A. De’Longhi S.p.A. (parent company) 257
PwC S.p.A. Italian subsidiaries 246
Network of parent company auditor Foreign subsidiaries 1,180
Other auditors Foreign subsidiaries 64
Other services
PwC S.p.A. De’Longhi S.p.A. (parent company) 27
Network of parent company auditor De’Longhi S.p.A. (parent company) 27
PwC S.p.A. Italian subsidiaries 47
Network of parent company auditor Foreign subsidiaries 311
Group annual report and nancial statements -
Appendices
135De’ Longhi Group
Certication of the consolidated nancial statements
pursuant to art. 81-ter of CONSOB Regulation 11971 dated
14 May 1999 and subsequent amendments and additions
(Appendix 5 to the Explanatory notes)
The undersigned Massimo Garavaglia, Chief Exec-
utive Ocer, and Stefano Biella, as Ocer Respon-
sible for Preparing the Company’s Financial Report
of De’Longhi S.p.A., attest, also taking account of
the provisions of paragraphs 2, 3 and 4, art. 154-bis
of Decree 58 dated 24 February 1998:
that the accounting and administrative processes
for preparing the consolidated nancial statements
during 2021:
• have been adequate in relation to the company’s
characteristics and
• have been effectively applied.
It is also certied that the consolidated nancial
statements at 31 December 2021:
• have been prepared in accordance with the Inter-
national Financial Reporting Standards adopted
by the European Union under Regulation (EC)
1606/2002 of the European Parliament and
Council dated 19 July 2002 and with the meas-
ures implementing art. 9 of Decree 38/2005;
• correspond to the underlying accounting records
and books of account;
• are able to provide a true and fair view of the is-
suer’s statement of nancial position and results
of operations and of the Group of companies in-
cluded in the consolidation.
The report on operations contains a reliable ac-
count of performance and of the results of opera-
tions and of the situation of the issuer and the
Group of companies included in the consolidation,
together with a description of the principal risks
and uncertainties to which they are exposed.
Massimo Garavaglia
Chief Executive Ocer
Stefano Biella
Ocer Responsible for Preparing the Company’s
Financial Report
External auditors’ report
on the consolidated
nancial statements
Group
annual
report and
nancial
statements
Group annual report and nancial statements -
External auditors’ report
137De’ Longhi Group
Group annual report and nancial statements -
External auditors’ report
138De’ Longhi Group
Group annual report and nancial statements -
External auditors’ report
139De’ Longhi Group
Group annual report and nancial statements -
External auditors’ report
140De’ Longhi Group
Group annual report and nancial statements -
External auditors’ report
141De’ Longhi Group
Group annual report and nancial statements -
External auditors’ report
142De’ Longhi Group
Group annual report and nancial statements -
External auditors’ report
143De’ Longhi Group
Indipendent auditors’
report on consolidated
Non-Financial Statement
Group
annual
report and
nancial
statements
Group annual report and nancial statements -
Indipendent auditors’ report
145De’ Longhi Group
Group annual report and nancial statements -
Indipendent auditors’ report
146De’ Longhi Group
Group annual report and nancial statements -
Indipendent auditors’ report
147De’ Longhi Group
Group annual report and nancial statements -
Indipendent auditors’ report
148De’ Longhi Group
Group annual report and nancial statements -
Indipendent auditors’ report
149De’ Longhi Group
Report on
operations
on separate
nancial
statements
151
Report on operations on separate nancial
statements
De’ Longhi Group
R
Review of the income statement
De’Longhi S.p.A, the parent of the De’Longhi Group,
performs holding company activities involving the
management and supply of centralized services to
its subsidiaries. The income statement, therefore,
reects the dividends received from the subsidiar-
ies, other chargebacks for services provided, as
well as operating (payroll costs and the cost of ser-
vices) and nancial expenses.
In 2021 dividends amounted to €133.3 million
(€110.9 million in 2020) while net nancial expens-
es came to €5.3 million (€4.2 million in 2020).
Net prot came to €107.1 million (€88.7 million in
2020).
(€/million) 2021 % revenues 2020 % revenues
Revenues 14.5 100.0% 8.8 100.0%
Changes 2021/2020 5.7 64.4%
Materials consumed (0.1) (0.3%) (0.1) (0.5%)
Other services and expenses (21.0) (144.1%) (16.0) (180.9%)
Payroll (16.0) (110.0%) (11.9) (134.6%)
EBITDA before non-recurring expenses /
stock option
(22.5) (154.4%) (19.1) (216.1%)
Changes 2021/2020 (3.3) 17.5%
Non-recurring expenses / stock option (3.7) (25.2%) (2.8) (31.3%)
EBITDA (26.1) (179.7%) (21.9) (247.3%)
Amortization (0.6) (3.9%) (0.8) (8.8%)
EBIT (26.7) (183.5%) (22.7) (256.1%)
Changes 2021/2020 (4.0) 17.8%
Dividends 133.3 916.5% 110.9 1.254.1%
Net nancial income (expenses) (5.3) (36.2%) (4.2) (47.9%)
Prot (loss) before taxes 101.4 696.8% 84.1 950.1%
Income taxes 5.7 39.4% 4.7 52.6%
Prot (loss) after taxes 107.1 736.2% 88.7 1,002.7%
152
Report on operations on separate nancial
statements
De’ Longhi Group
The reclassied statement of nancial position is presented below:
(€/million) 31.12.2021 31.12.2020 Change % change
- Tangible and intangible assets 1.3 1.5 (0.2) (13.2%)
- Financial assets 567.5 567.5 - -
Non-current assets 568.8 569.0 (0.2) (0.1%)
- Trade receivables 1.3 3.4 (2.1) (62.8%)
- Trade payables (5.9) (4.3) (1.5) 35.0%
- Other current payables (net of other
receivables)
0.3 (1.2) 1.4 (121.8%)
Net working capital (4.3) (2.1) (2.2) 105.6%
Total non-current liabilities and provisions (7.1) (7.1) - 0.2%
Net capital employed 557.4 559.8 (2.4) (0.4%)
(Positive net nancial position) (48.0) (7.6) (40.4) 533.5%
Total net equity 605.4 567.4 38.0 6.7%
Total net debt and equity 557.4 559.8 (2.4) (0.4%)
The positive net nancial position amounted to €48.0 million at 31 December 2021 (€7.6 million at 31 De-
cember 2020), broken down as follows:
(€/million) 31.12.2021 31.12.2020 Change
Cash and cash equivalents 20.5 - 20.5
Other nancial receivables 885.9 577.6 308.3
Current nancial debt (243.2) (110.0) (133.2)
Positive current net nancial position 663.2 467.6 195.6
Non-current net nancial debt (615.2) (460.0) (155.2)
Total positive net nancial position 48.0 7.6 40.4
of which:
- net position with banks and other lenders 48.9 10.8 38.1
- lease payables (1.0) (1.2) (0.2)
- other net assets/(liabilities) (fair value of
derivatives, nancial payables linked to the
purchase of equity investments)
0.1 (2.0) (1.9)
Net debt includes a few specic nancial items, including the fair value measurement of derivatives which
shows a net positive balance of €0.1 million at 31 December 2021 (negative for €2.0 million at 31 December
2020).
The net nancial position at 31 December 2021 also inlcudes the impact of IFRS 16 adoption with resulted
in the recognition of €1.0 million in “Lease payables” (€1.2 million at 31 December 2020).
Net of these items, the net nancial position with banks was €48.9 million at 31 December 2021, with cash
ow reaching a positive €38.1 million in the twelve-month period.
Despite its sound, solid nancial situation, in 2021, as part of its strategy to extend the average maturity of
its debt and take advantage of the favorable market conditions, the Company decided to increase and diver-
sify nancial resources by signing agreements for three loans totalling €250 million.
In April 2021 another €150 million tranche of the USPP, maturing in 2041, was issued and underwritten by a
leading US nancial group.
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Review of the statement
of nancial position
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The statement of cash ows, reclassied on the basis of net nancial position, is summarized as follows:
(€/million) 2021 2020
Cash ow by current operations (28.3) (20.3)
Cash ow by other changes in working capital 8.1 0.7
Cash ow by investment activities 133.0 110.7
Cash ow by operating activities 112.8 91.1
Dividends paid (80.8) (80.8)
Cash ow by changes in cash ow hedge
reserves
1.3 (1.4)
Cash ow by treasury shares purchase - (14.5)
Stock options exercise 7.1 21.4
Cash ow by changes in net equity (72.4) (75.3)
Cash ow for the period 40.4 15.8
Opening positive net nancial position (net
nancial debt)
7.6 (8.2)
Closing positive net nancial position 48.0 7.6
Net operating cash ow amounted to €112.8 million (€91.1 million in 2020), an increase of €21.7 million
compared to the prior year. This change is explained primarily by an increase in the dividends received from
subsidiaries.
Cash ow to net equity reached a negative €72.4 million (negative €75.3 million in 2020), explained primarily
by dividend payments of €80.8 million, the exercise of stock options for €7.1 million and the change in the
cash ow hedge reserve relating to the fair value of derivatives of €1.3 million.
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Below is a concise reconciliation between net equity and prot of the parent company, De’Longhi S.p.A., and
the gures shown in the consolidated nancial statements:
(€/thousands)
Net equity
31.12.2021
Prot for
2021
Net equity
31.12.2020
Prot for
2020
De’Longhi S.p.A. nancial statements 605,379 107,099 567,417 88,710
Share of subsidiaries' equity and results for
period attributable to the Group, after deducting
carrying value of the investments
583,331 224,690 465,275 121,064
Allocation of goodwill arising on consolidation
and related amortization and reversal of
goodwill recognized for statutory purposes
436,660 (5,634) 274,522 (1,948)
Elimination of intercompany prots (55,097) (14,406) (40,128) (8,227)
Other adjustments 322 - 268 534
Consolidated nancial statements 1,570,595 311,749 1,267,354 200,133
Minority 2,018 651 - -
Consolidated nancial statements-Group
portion
1,568,577 311,098 1,267,354 200,133
R
Reconciliation of net equity
and prot (loss) for the year
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A
H
Annual remuneration report
Human resources and organization
Please refer to the yearly Report on Remuneration for all relevant information not contained in the present
report.
The company had 58 employees at 31 December
2021 (52 at 31 December 2020).
The following table summarizes the average
number of employees during 2021 compared with
2020:
2021 % 2020 % Change
White collars 36 65% 33 65% 3
Managers 19 35% 18 35% 1
Total 55 100% 51 100% 4
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statements
De’ Longhi Group
As a holding company, the Company does not carry out any research and development directly. These activ-
ities are carried out by employees of the individual subsidiaries. More details can be found in the paragraph
on “Research and Development - quality control” found in the Report on Operations accompanying the con-
solidated nancial statements.
Company’s Report on Corporate Governance and Ownership Structure drawn up in accordance with
art. 123 - bis of the Uniform Finance Act can be found in a report not included in the Report on Opera-
tions, published at the same time as the latter and available on the company’s website www.delonghi-
group.com (section Home > Governance > Corporate bodies > Shareholders’ Meeting 2022).
Pursuant to art. 16.4 of the Market Regulations please note that the Company is not subject to the direction
and control of the parent company DeLonghi Industrial S.A., or of any other party, pursuant to and in accord-
ance with articles 2497 et seq of the Italian Civil Code, insofar as (i) the Group’s business, strategic and -
nancial plans, as well as the budget, are approved independently by the Company’s Board of Directors;
(ii) the nancial and funding policies are dened by the Company; (iii) the Company conducts its relation-
ships with clients and suppliers in full autonomy; and (iv) in accordance with the principles of the Corporate
Governance Code, important strategic, economic, equity and nancial transactions are examined by the
board and approved exclusively by the Board of Directors.
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Report on corporate governance
and ownership structure
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Research and development
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De’ Longhi Group
Introduction
The Company’s Internal Control System consists in
the set of rules, procedures and organizational
structures set in place to ensure that company
strategies are adhered to and, based on the corpo-
rate governance standards and model included in
the COSO report (Committee of Sponsoring Organi-
zations of the Treadway Commission), to
guarantee:
a. ecient and effective company operations (ad-
ministration, production, distribution, etc.);
b. reliable, accurate, trustworthy and timely eco-
nomic and nancial information;
c. compliance with laws and regulations, as well
as the corporate articles of associations, rules
and company procedures;
d. safeguarding of the company’s assets and pro-
tection, to the extent possible, from losses;
e. identication, assessment, management and
monitoring of the main risks.
The executive administrative bodies of the Parent
Company De’Longhi S.p.A. (Board of Directors, the
Control and Risks, Corporate Governance and Sus-
tainability Committee, Director in Charge of the In-
ternal Control and Risk Management System), the
Board of Statutory Auditors, the Director of Internal
Audit, the Supervisory Board, the Chief nancial of-
cer/Financial Reporting Ocer and all De’Longhi
personnel, as well as the Directors and Statutory
Auditors of the Issuer’s subsidiaries, are involved in
the controls, with different roles and in function of
their expertise and adhere to the recommendations
and principles found in the guidelines.
The Internal Control System that is subject to ex-
amination and periodic audits, taking into account
changes in the company’s operations and refer-
ence context, makes it possible to address the
main risks to which the Issuer and the Group are
exposed to over time, in a timely manner, as well as
to identify, assess and control the degree of the ex-
posure of the Issuer and all the other companies of
the Group - particularly the strategically important
subsidiaries - to the different types of risk, and also
makes it possible to manage the overall exposure
taking into account:
i. the possible correlations between the differ-
ent risk factors;
ii. the probability that the risk materializes;
iii. the impact of the risk on the company’s
operations;
iv. the overall impact of the risk.
The internal control and risk management system
relating to the nancial reporting process (adminis-
trative and accounting procedures used to draft the
separate and consolidated annual nancial state-
ments and the other economic and/or nancial re-
ports and disclosures prepared in accordance with
the law and/or regulations, as well as ensuring cor-
rect implementation) coordinated by the Chief -
nancial ocer/Financial Reporting Ocer, is an in-
tegral and essential part of the De’Longhi Group’s
Internal Control and Risk Management System.
The Director of Internal Audit - who is in charge of
verifying that the internal control and risk manage-
ment system works eciently and effectively - pre-
pares a work plan each year that is presented to the
Board of Directors for approval, subject to the posi-
tive opinion of the Control and Risks, Corporate
Governance and Sustainability Committee and
after having consulted with the Board of Statutory
Auditors and the Director in Charge of the Internal
Control and Risk Management System, based also
on the comments made by the Chief nancial of-
cer/Financial Reporting Ocer, as well as pursu-
ant to Legislative Decree 262/05. Discusses the
steps taken to resolve any problems, to make the
improvements agreed upon, as well as the results
of the testing activities with the Control and Risks,
Corporate Governance and Sustainability Commit-
tee. Provides the Chief nancial ocer/Financial
Reporting Ocer, as well as the administrative
body assigned, with a summary report based on
which they can assess the adequacy and applica-
tion of administrative procedures to be used to pre-
pare the nancial statements.
Description of main characteristics
The Company uses a system of risk management
and internal control for the nancial reporting pro-
cess that is part of the wider system of internal
controls as required under art. 123-bis par. 2 (b) of
TUF.
For the purposes of ensuring reliable internal con-
trols over its nancial reporting, the Company has
implemented a system of administrative and
accounting procedures and operations that include
an accounting policies manual, updating in order to
comply with the law and changing accounting
standard, rules for consolidation and interim nan-
cial reporting, as well as coordination with subsidi-
aries as needed.
The central corporate functions are responsible for
managing and communicating these procedures
to other Group companies.
The assessment, monitoring and continuous up-
dating of the internal control system relating specif-
ically to nancial reporting is carried out in accord-
ance with the COSO model and, where applicable,
Law 262/2005. Critical processes and sub-pro-
cesses relating to the principal risks have been
identied in order to establish the principal controls
needed to reduce such risks. This has involved
identifying the strategically important companies,
based on quantitative and qualitative nancial pa-
rameters (i.e. companies that are relevant in terms
of size and companies that are relevant just in
terms of certain processes and specic risks).
Having identied these companies, the risks have
been mapped and assessed and the key manual
and automatic controls have been identied and
rated as high/medium/low priority accordingly;
these controls have then been tested.
The perimeter of the companies included in the
mapping for the purposes of Law 262/2005 has
changed over the years to reect the changes in the
Group, both quantitative and qualitative, and this
perimeter was also considered for the denition of
companies viewed as strategic.
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Risk management and internal control system
relating to the nancial reporting process
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De’ Longhi Group
The general managers and administrative heads of
each Group company are responsible for maintain-
ing an adequate internal control system and, given
their roles, must certify that the internal control
system works properly.
Internal Audit must also include verication of the
internal controls through the use of a self-assess-
ment check list in its Audit Plan.
With regard to compliance with Consob Regulation
20249 of 28 December 2017 relating to market reg-
ulations (“Regolamento Mercati”), De’Longhi S.p.A.
controls, directly or indirectly, seven companies
formed and regulated by the law of countries that
are not part of the European Union considered rele-
vant pursuant to art. 151 of the issuer regulations
(“Regolamento Emittenti”).
With reference to the requirements of art. 15 of the
Market Regulations, it is reported as follows:
• in the issuer’s opinion, these companies have
suitable accounting and reporting systems for
regularly providing management and the audi-
tors of De’Longhi S.p.A. with all the nancial in-
formation needed to prepare the consolidated -
nancial statements and perform the audit of the
accounts;
• these companies provide the auditors of
De’Longhi S.p.A. with the information needed to
audit the parent company’s interim and annual
nancial statements;
• the issuer keeps the articles of association of the
aforementioned companies and details of their
company ocers and related powers, which are
constantly updated for any changes in the same;
• the nancial statements of such companies, pre-
pared for the purposes of the De’Longhi Group’s
consolidated nancial statements, have been
made available in the manner and terms estab-
lished by existing law. Please note that the identi-
cation and analysis of the risk factors contained
in this report were carried out including in light of
the change in strategic companies as resolved
by the Board of Directors.
In order to identify and manage the Company’s
main risks, with regard particularly to corporate
governance and compliance with the law and regu-
latory standards (including the Corporate Govern-
ance Code for Listed Companies), the Issuer under-
took a project for the development and monitoring
of a structured ERM model in order to effectively
manage the main risks to which the Issuer and the
Company are exposed.
During 2021, activities for implementing this Enter-
prise Risk Management (ERM) project continued.
ERM is aimed at streghtening the risk control and
management system by mapping the main risks to
which the Company is exposed on the basis of the
Group value chain, identifying the inherent and of
the related residual risk and assessing and imple-
menting action plans for their elimination/mitiga-
tion. Furthermore, the Internal Audit Director and
the Ocer Responsible for Preparing the Compa-
ny’s Financial Reportes continued the work for spe-
cically and analytically governing the ERM risk
management system, through some additional
activities.
In 2021 this activity continued by updating existing
risks, the main strategic risks identied by the Chief
Executive Ocer, the analysis of the perimeter of
the Group’s strategically important foreign branch-
es, as well as mapping the risks perceived by the
Managers of audited branches.
Preparation for the roll out of the new ERM plat-
form also continued. This platform will provide
more structured and ecient ERM management in
the coming years.
Risk factors
The risk factors and uncertainties that could mate-
rially affect the Company’s business are discussed
below.
These risk factors also take in to account the above
mentioned ERM project and the assessments car-
ried out in prior years including through more in
depth analysis shared with the Control and Risks,
Corporate Governance and Sustainability Commit-
tee and Company’s Board of Statutory Auditors.
With reference to the main risks, highlighted below,
the Company monitors and places continuous at-
tention to any situations and developments in the
macroeconomic, market and demand trends in
order to be able to implement any necessary and
timely strategic actions.
It should also be noted that in addition to the risk
factors and uncertainties identied in this report,
other risks and uncertain events not currently fore-
seeable, or which are currently thought unlikely,
could also inuence the business, the economic
and nancial conditions and prospects of the
Company.
1 - Risks relating to macroeconomic trends:
the Company’s economic performance and
nancial position are also aected by macro-
economic trends.
The global health crisis, the economic scenario and
the diculties in anticipating economic cycles,
energy prices (oil, above all), the prices and scarcity
of raw materials (plastic and copper), the ongoing
political crises and conicts (particularly the situa-
tion in Ukraine/Russia which has worsened consid-
erably in the last few days), the decided increase in
transportation costs, the political and economic
changes in the United States and Great Britain
(Brexit) could, together with the other factors re-
ferred to in this section, have a signicant impact
on the Company’s results and nancial position.
The Company periodically monitors these econom-
ic trends in order to quickly take strategic action as
needed.
The Group is also subject to the risks connected to
the spread of epidemics or serious health issues in
the main reference markets which could interrupt
or limit activities in these markets (in relation to
production, the supply chain and/or the sale of
products, as well as all the back oce activities).
The Company cannot predict these phenomena
but, leveraging on past experience, it is able to react
and implement all the measures needed to limit the
consequences (as was the case in 2020/2021
when, because of the global health crisis, the Com-
pany had to face an unprecedented level of market
uncertainty).
The persistence of these situations, however, could
interrupt and/or limit the Group’s activities which
would have an impact on economic and nancial
results.
2 - Exchange rate uctuation risks: the Com-
pany does business in many foreign markets
and is exposed to the risk of uctuations in
currencies.
For the purposes of protecting its income state-
ment and statement of nancial position from such
uctuations, the Company adopts a suitable hedg-
ing policy and tools, free from speculative
connotations.
Hedging is carried out centrally by a special team
on the basis of information obtained from a de-
tailed reporting system, using instruments and pol-
icies that comply with international accounting
standards.
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De’ Longhi Group
The main currencies to which the Company is ex-
posed are the US dollar, the HK dollar and the Brit-
ish pound.
Despite the Company’s effort to minimize the
abovementioned risk, sudden currency uctuations
could have an adverse impact on the Company’s
results and business prospects.
3 - Risks relating to human resources man-
agement: the Company’s success largely de-
pends on the ability of its executive directors
and other members of management to eec-
tively manage the Company and the individ-
ual areas of business and on the profession-
alism of the human resources that it has been
able to attract and develop.
The principal risks relating to human resources are
linked to the Company’s ability to attract, develop,
motivate, retain and empower staff who have the
necessary talent, values, and specialist and/or
managerial skills to satisfy the Company’s chang-
ing needs.
The loss of such individuals or other key employees
without adequate replacement, or the failure to at-
tract and retain new qualied resources could
therefore adversely affect the Company’s business
prospects, as well as its economic performance
and/or nancial position.
In terms of being able to attract quality resources,
the Company not only have specialist qualied pro-
fessional human resources teams, but they also
plan actions to improve the quality of working envi-
ronment for its employees and staff as well as the
Company’s external image (communication, con-
tact with schools and universities, testimonials, in-
ternships, etc.), in some cases using the services of
specialist professional rms with a proven track
record.
In terms of motivating and developing personnel,
actions taken include the strengthening of mana-
gerial, specialist, business and regulative compe-
tencies, with initiatives that involve managers and
staff from different areas of the business.
The salary review process also includes reward sys-
tems for employees at various levels in the organiza-
tion - from the staff through to top management and
key people - which are linked to the achievement of
short-term and/or medium/long term targets.
The health crisis proved critical for human resourc-
es and determined the course of 2020/2021.
In the face of a health crisis (similar to what hap-
pened with the Covid-19 pandemic described above)
the Company denes and implements an important
series of actions aimed at ensuring the maximum
security and safety of its employees, while, at the
same time, guaranteeing business continuity.
4 - Risks relating to IT systems: the informa-
tion systems of a complex international group
are an important and delicate part of the
company’s processes.
The risks involved include events that could jeop-
ardise the ability to provide continuous service, the
safekeeping of data, obsolescence of telecommu-
nications and data processing technologies.
The Company has taken the steps needed to limit
the above mentioned risks which include the stand-
ard security devices used to protect systems and
hardware (from the use of back-up devices to out-
sourcing with specialized companies). Continuous
technological updates are assured by the prevalent
use of the SAP platform.
While the Company has taken all the steps needed
to minimize these risks, catastrophic events that
could compromise the information systems
cannot be excluded.
5 - Liquidity, nancing and interest rate risks:
the liquidity risk possibly faced by the Com-
pany is the risk of not having the funds need-
ed to full payment obligations arising from
operating and investment activities and from
the maturity of nancial instruments. e
Company holds assets and liabilities that are
sensitive to interest rate changes and that are
necessary to manage its liquidity and nan-
cial needs.
It is the Company’s policy to maintain a suciently
large portfolio of counterparties of international
repute for the purposes of satisfying its nancing
and hedging needs.
The Company uses specic policies and proce-
dures for the purposes of monitoring and manag-
ing this risk, including the centralized cash man-
agement (nancial debt and cash management,
the raising of medium and long-term nance on
capital markets and the obtaining of short-term
credit lines that allow wide room for manoeuvre
when managing working capital and cash ows).
The Company has short-term bank credit lines (typi-
cally renewed on an annual basis), which are used to
nance working capital and other operating needs.
About the interest rate risk, at 31 December 2021
the Company’s net nancial position is positive and
nancial debt is medium-long term, in order to take
advantage of the favourable market conditions
characterized by very low interest rates.
This risk is managed centrally by the same team
that manages currency risks. Nevertheless, sudden
uctuations in interest rates could have an adverse
impact on the Company’s business prospects, as
well as on its economic performance and/or nan-
cial position.
At the date of this report, the Company has three
hedging contracts to protect two medium/long
term loans from the interest rates uctuation risk.
6 - Compliance and corporate reporting risks:
A. Financial reporting: risks associated with the
reliability of nancial reporting, particularly that
the information contained in the annual and inter-
im nancial reports might not be correct, warrant
particular attention, especially for a listed
company.
In 2021, effective implementation of the system of
managing nancial reporting risks was monitored
on a continuous basis and periodically evaluated
under the guidance of the functions in charge.
For the purposes of ensuring reliable internal con-
trols over its nancial reporting, the Group has im-
plemented a system of administrative and ac-
counting procedures and operations that include:
• an accounting policies manual;
• accounting policy instructions and updates;
• other procedures for preparing the consolidated
nancial statements and periodic nancial
reports.
The Company’s central “Corporate” functions are
responsible for managing and communicating
these procedures to other Group companies. The
control bodies (internal and external) carry out the
related audit within their own authority.
Possible deciencies in maintaining adequate pro-
cesses and administrative-accounting and man-
agement checks may result in errors in Company’s
corporate reporting.
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De’ Longhi Group
B. Risks relating to the administrative liability of
legal: in compliance with EU directives, Decree
231/2001 has introduced into Italian law special
rules applying to the liability of entities for certain
offences, where “entities” mean limited liability
business enterprises, partnerships or associa-
tions, including those without legal status.
Under this legislation and amendments and addi-
tions thereto, the Company has adopted, in accord-
ance with art. 6 of Decree 231/2001, the “Model of
organization, management and control” suitable
for avoiding the occurrence of such liability at their
own expense and the related “Ethical code”, intend-
ed to apply not only to the Group’s Italian compa-
nies but also, as far as applicable, to its foreign
subsidiaries, since the Company is also answera-
ble, under art. 4 of Decree 231/2001, for offences
committed abroad.
Therefore, the company’s administrative liability
under Decree 231/2001 could exist when this is ef-
fectively established as a result of an action
brought against one of the Group companies, in-
cluding the foreign subsidiaries; in such a case, it is
not possible to exclude, in addition to the resulting
application of penalties, adverse consequences for
the Company’s operations, economic performance,
assets and liabilities and nancial position.
7 - Related parties: the Company has had and
continues to have transactions of a commer-
cial nature with related parties. Such trans-
actions carry conditions that are in line with
market ones.
The Company adopted a new set of procedures to
govern transactions with related parties, in compli-
ance with the standards set by the supervisory au-
thorities in CONSOB Regulation 17221 dated 12
March 2010.
The procedures identify those related party trans-
actions subject to specic examination and ap-
proval rules, which change according to whether
such transactions are above or below dened
thresholds. The procedures place particular impor-
tance on the role of the independent directors, who
must always issue a prior opinion on the proposed
transaction (if the transaction qualies as material,
this opinion is binding on the Board of Directors);
the independent directors must also be involved in
the preliminary examination of material transac-
tions prior to their approval.
These procedures are considered to represent an
additional guarantee of the transparency of the
Company’s operations.
Information on related party transactions is sum-
marized in Appendix 4 to the Explanatory Notes.
More information about the company’s risk man-
agement can be found in the Explanatory notes.
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De’ Longhi Group
N
T
Number and value of shares
Treasury shares
At 31 December 2020 share capital comprised 150,548,564 ordinary shares with a par value €1.5 each, for a
total of €225,823 thousand.
In 2021, 347,528 options assigned under the “Stock Option Plan 2016-2022” were exercised at an exercise
price of €20.4588, and consequently, the same number of ordinary shares with a par value of €1.5 each were
subscribed.
The share capital at 31 December 2021, therefore, comprised 150,896,092 ordinary shares with a par value
of €1.5 for a total of €226,344 thousand.
In the period 1-15 January 2021 no other stock options assigned under the same plan were exercised.
At 31 December 2021 the Company held 895,350 treasury shares for a total of €14,534 thousand, pur-
chased pursuant to the buyback program approved during the Ordinary Shareholders’ Meeting held on 30
April 2019 and subsequently renewed on 22 April 2020 - after revoking the previous authorization granted by
shareholders, for the unexecuted part - for a period of up to a maximum of 18 months (namely through 22
October 2021).
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statements
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R
Related party transactions
The Company exercised, jointly with the consolidator DeLonghi Industrial S.A., the option to adhere to group
taxation, referred to as “Domestic Tax Consolidation”, as permitted under articles 117 - 129 of the Consoli-
dated Income Tax Act (TUIR) as per Presidential Decree n. 917 of 22 December 1986, and the Decree of the
Ministry of Economy and Finance of 9 June 2014, for the three-year period 2019-2021.
Related party transactions fall within the normal course of the company business.
Information on related party transactions is summarized in Appendix 4 to the Explanatory Notes.
T
Tax consolidation
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statements
De’ Longhi Group
A
Alternative performance indicators
In addition to the information required by IFRS, this
document presents other nancial measures
which provide further analysis of the Company’s
performance. These indicators must not be treated
as alternatives to those required by IFRS.
More in detail, the non-GAAP measures used
include:
• EBITDA: the Company uses these measure as
nancial targets in internal presentations (busi-
ness plans) and in external presentations (to an-
alysts and investors), since it is a useful way of
measuring operating performance besides EBIT.
EBITDA is an intermediate measure that derives
from EBIT after adding back depreciation, amor-
tization of property, plant and equipment and in-
tangible assets. EBITDA is also presented net of
non-recurring items, which are reported sepa-
rately on the face of the income statement.
• Net working capital: this measure is the sum of
inventories, trade receivables, current tax assets
and other receivables, minus trade payables, cur-
rent tax liabilities and other payables.
• Net capital employed: this measure is the sum
of net working capital, intangible assets, proper-
ty, plant and equipment, equity investments,
other non-current receivables, and deferred tax
assets, minus deferred tax liabilities, employee
severance indemnity and provisions for contin-
gencies and other charges.
• Net nancial debt/(Positive net nancial posi-
tion): this measure represents gross nancial li-
abilities less cash and cash equivalents and
other nancial receivables; the net nancial posi-
tion with banks, net non-banking items, is also
reported. The individual line items in the state-
ment of nancial position used to determine this
measure are analysed later in this report.
The gures contained in the present document, in-
cluding some of the percentages, have been round-
ed relative to their full Euro amount. As a result,
some of the totals in the tables may differ from the
sum of the individual amounts presented.
164
Report on operations on separate nancial
statements
De’ Longhi Group
N
S
Non-nancial statement
Subsequent events
Based on Legislative Decree n.254/2016, in implementation of the Directive 95/2014 or “Barnier Directive”,
large public interest undertakings are required to publish a Non-Financial Statement (NFS) as of FY 2017.
For further information refer to the Consolidated Annual Report on Operations.
After 31 December 2021 through the date on which this annual report was approved, no events occurred
that would have had a signicant impact on the nancial and economic results recorded, as per IAS 10 -
Events after the reporting period.
With regard to the international scenario, in the rst few months of 2022 the European geopolitical situation
gradually took a turn for the worse. The rapid escalation of the tensions between Russia and Ukraine has
given rise to concerns, rst of all, about the safety of everyone, all the employees and their families and,
secondly, the economic situation in these markets.
The Company is carrying out a series of assessments in order to estimate the possible economic and nan-
cial impact of a scenario that today is entirely uncertain.
Other than the above, no other signicant events occurred after the close of the year.
165
Report on operations on separate nancial
statements
De’ Longhi Group
P
Proposed resolutions for the
Annual General Meeting
1) Proposed resolution relating to item 1.1 of the
Agenda for the Annual General Meeting convened
on 20 April 2022 (“Annual Report at 31 December
2021: presentation of the nancial statements at
31 December 2021, together with the Directors’
Report on Operations, the Board of Statutory Audi-
tors’ Report, the External Auditors’ Report and the
Certication of the Financial Reporting Ocer.
Related and consequent resolutions”).
Dear Shareholders,
in submitting the De’Longhi S.p.A.’s Annual Report
at 31 December 2021 to you for approval during the
Annual General Meeting, we propose that you ap-
prove the following resolution:
“The Shareholders of De’ Longhi S.p.A., having ex-
amined the draft nancial statements at 31 Decem-
ber 2021 of De’Longhi S.p.A., the Board of Directors’
Report on Operations, the Board of Statutory Audi-
tors’ Report, the External Auditors’ Report and the
other documentation called for under the law
resolve
to approve the Board of Directors’ Report on Opera-
tions and the nancial statements at 31 December
2021 of De’Longhi S.p.A.”.
2) Proposed resolution relating to item 1.2 of the
Agenda for the Annual General Meeting convened
on 20 April 2022 (“Annual Report at 31 December
2021: proposed allocation of the net prot for the
year and distribution of the dividend. Related and
consequent resolutions”).
Dear Shareholders,
with regard to the allocation of the net prot for the
year closed on 31 December 2021, which amount-
ed to €107,098,783, we propose that you approve
the following resolution:
“The Shareholders of De’Longhi S.p.A., having ac-
knowledged the net prot for the year shown in the
Annual Report at 31 December 2021 and the Direc-
tors’ Report on Operations
resolve
1. to allocate €101,259 of the net prot for the year
to the legal reserve, in accordance with art. 2430
of the Italian Civil Code, which represents one
fth of the share capital subscribed at the date of
this Annual General Meeting;
2. to distribute a gross ordinary dividend of €0.83
for each of the shares outstanding with dividend
rights at the record date, as per art. 83-terdecies
of Legislative Decree 58/98, using the net prot
for 2021 after the allocation referred to in item 1
above has been made and the extraordinary
reserve;
3. to establish that the payment of the dividend, on
each share entitled to receive a dividend, will take
place on 25 May 2022, with shares going ex-div
on 23 May 2022, in accordance with Borsa Italia-
na’s calendar, based on the record date set in ac-
cordance with art. 83-terdecies of Legislative
Decree n. 58/98 of 24 May 2022”.
Treviso, 10 March 2022
On behalf of the Board of Directors
The Chief Executive Ocer
Massimo Garavaglia
De’Longhi S.p.A. -
Separate nancial
statements
Income statement
Statement of comprehensive
income
Statement of nancial position
Statement of cash ow
Statement of changes in net
equity
Separate
annual
report and
nancial
statements
167De’ Longhi Group
Separate annual report and nancial statements -
Separate nancial statements
Income statement
(Amounts in Euro) Notes 2021 of which non-recurring 2020 of which non-recurring
Revenues 1 14,547,102 8,846,877
Total revenues 14,547,102 8,846,877
Raw and ancillary materials, consumables and goods 2 (50,630) (52,143) (7,600)
Materials consumed (50,630) (52,143)
Payroll costs 3 (19,656,283) (83,079) (14,482,499) (71,588)
Services and other operating expenses 4 (20,974,778) (9,013) (16,194,925) (187,246)
Amortization 5 (560,969) (776,980)
EBIT (26,695,558) (22,659,670)
Net nancial income (expenses) 6 128,062,180 106,713,731
Prot (loss) before taxes 101,366,622 84,054,061
Income taxes 7 5,732,161 4,656,327
Net prot (loss) 107,098,783 88,710,388
Appendix 4 reports the effect of related-party transactions on the income statement, as required by CONSOB resolution 15519 of 27 July 2006.
168De’ Longhi Group
Separate annual report and nancial statements -
Separate nancial statements
Statement of comprehensive income
(Amounts in Euro) 2021 2020
Net prot (loss) 107,098,783 88,710,388
Other components of the comprehensive income:
- Change in fair value of cash ow hedges and nancial assets available for sale 1,340,138 (1,379,568)
- Tax effect on change in fair value of cash ow hedges and nancial assets available for sale (321,633) 331,096
Total other comprehensive income will subsequently reclassied to prot (loss) for the year 1,018,505 (1,048,472)
- Actuarial valuation funds (27,775) 1,856
- Tax effect of actuarial valuation funds 6,666 (445)
Total other comprehensive income will not subsequently reclassied to prot (loss) for the year (21,109) 1,411
Other components of comprehensive income 997,396 (1,047,061)
Total comprehensive income 108,096,179 87,663,327
169De’ Longhi Group
Separate annual report and nancial statements -
Separate nancial statements
Statement of nancial position
ASSETS
(Amounts in Euro)
Notes 31.12.2021 31.12.2020
Non-current assets
Intangible assets 102,154 209,500
- Other intangible assets 8 102,154 209,500
Tangible assets 1,195,522 1,284,781
- Other tangible assets 9 161,975 59,579
- Right of use assets 10 1,033,547 1,225,202
Equity investments and other nancial assets 567,944,179 567,635,133
- Equity investments 11 567,516,127 567,516,127
- Receivables 12 112,325 119,006
- Other non-current nancial assets 13 315,727 -
Total non-current assets 569,241,855 569,129,414
Current assets
Trade receivables 14 1,271,103 3,418,293
Current tax assets 15 796,240 -
Other receivables 16 16,102,280 11,587,406
Current nancial receivables and assets 17 885,925,998 577,570,404
Cash and cash equivalents 18 20,466,996 43,511
Total current assets 924,562,617 592,619,614
Total assets 1,493,804,472 1,161,749,028
Appendix 4 reports the effect of related-party transactions on
the statement of nancial position, as required by CONSOB res-
olution 15519 of 27 July 2006.
170De’ Longhi Group
Separate annual report and nancial statements -
Separate nancial statements
Statement of nancial position
NET EQUITY AND LIABILITIES
(Amounts in Euro)
Notes 31.12.2021 31.12.2020
Net equity
Net equity 605,379,485 567,416,687
- Share capital 21 226,344,138 225,822,846
- Reserves 22 271,936,564 252,883,453
- Net prot (loss) 107,098,783 88,710,388
Total net equity 605,379,485 567,416,687
Non-current liabilities
Financial payables 615,673,373 460,126,144
- Bank loans and borrowings (long-term portion) 23 357,456,781 330,012,179
- Other nancial payables (long-term portion) 24 257,455,550 129,160,366
- Lease liabilities (long-term portion) 10 761,042 953,599
Deferred tax liabilities 25 1,196,014 713,187
Non-current provisions for contingencies and other charges 5,878,911 6,348,036
- Employee benets 26 5,878,911 6,348,036
Total non-current liabilities 622,748,298 467,187,367
Current liabilities
Trade payables 27 5,864,825 4,344,718
Financial payables 243,171,419 110,030,772
- Bank loans and borrowings (short-term portion) 23 220,608,775 86,554,815
- Other nancial payables (short-term portion) 24 22,285,217 23,198,691
- Lease liabilities (short-term portion) 10 277,427 277,266
Current tax liabilities 28 - 122,019
Other payables 29 16,640,445 12,647,465
Total current liabilities 265,676,689 127,144,974
Total net equity and liabilities 1,493,804,472 1,161,749,028
Appendix 4 reports the effect of related-party transactions on
the statement of nancial position, as required by CONSOB res-
olution 15519 of 27 July 2006.
171De’ Longhi Group
Separate annual report and nancial statements -
Separate nancial statements
(Amounts in Euro) Notes 2021 2020
Net prot (loss) 107,098,783 88,710,388
Income taxes for the period (5,732,161) (4,656,327)
Income for dividends receipt (133,327,104) (110,949,329)
Amortization 560,969 776,980
Net change in provisions and other non-cash items 3,064,873 5,839,720
Cash ow absorbed by current operations (A) (28,334,640) (20,278,568)
Change in assets and liabilities for the period:
Trade receivables 2,147,191 (428,924)
Trade payables 1,520,107 (2,009,087)
Other changes in net working capital 5,377,629 3,410,174
Payment of income taxes (917,747) (319,921)
Cash ow generated by changes in working capital (B) 8,127,180 652,242
Cash ow absorbed by current operations and changes in working capital (A+B) (20,207,460) (19,626,326)
Investment activities:
Investments in intangible assets (124,429) (10,155)
Investments in tangible assets (136,086) (64,926)
Investments in leased assets (103,850) (202,216)
Other cash ow from tangible assets 16,393 -
Dividends receipt 139,727,104 104,549,329
Cash ow generated by investment activities (C) 139,379,132 104,272,032
Cash ow by operating activities (A+B+C) 119,171,672 84,645,706
Purchase of treasury shares - (14,533,855)
Exercise of stock option 7,110,006 21,452,361,00
Dividends paid (80,671,312) (80,476,578)
New loans 450,000,000 200,000,000
Payment of interests on loans (3,797,558) (3,749,587)
Repayment of loans and other net changes in source of nance (471,389,323) (207,388,145)
Cash ow absorbed by changes in net equity and by nancing activities (D) (98,748,187) (84,695,804)
Cash ow for the period (A+B+C+D) 20,423,485 (50,098)
Opening cash and cash equivalents 18 43,511 93,609
Increase (decrease) in cash and cash equivalents (A+B+C+D) 20,423,485 (50,098)
Closing cash and cash equivalents 18 20,466,996 43,511
Statement of cash ow
Appendix 2 reports the statement of cash ows in terms of net
nancial position.
172De’ Longhi Group
Separate annual report and nancial statements -
Separate nancial statements
(Amounts in Euro) Share capital
Share
premium
reserve
Legal reserve
Extarordinary
reserve
Treasury
share reserve
Fair value and
cash ow
hedge
reserve
Stock option
reserve
Actuarial
evaluation
reserve
Prot (loss)
carried
forward
Prot (loss)
for the period
Total
Balance at 31 December 2019 224,250,000 162,545 42,573,131 144,537,886 - 123,477 10,078,239 (114,721) 10,441,324 119,094,082 551,145,963
Allocation of 2019 result as per AGM
resolution of 22 April 2020 and AGM
resolution of 15 December 2020
- distribution of dividends (80,812,736) (80,812,736)
- allocation to reserves 2,276,869 116,817,213 (119,094,082) -
Fair value stock option 2,501,627 2,501,627
Exercise of stock otion 1,572,846 25,674,980 (5,795,465) 21,452,361
Treasury shares purchase (14,533,855) (14,533,855)
Movements from transactions with
shareholders
1,572,846 25,674,980 2,276,869 36,004,477 (14,533,855) - (3,293,838) - - (119,094,082) (71,392,603)
Prot (loss) after taxes 88,710,388 88,710,388
Other components of comprehensive
income
(1,048,472) 1,411 (1,047,061)
Comprehensive income (loss) - - - - - (1,048,472) - 1,411 - 88,710,388 87,663,327
Balance at 31 December 2020 225,822,846 25,837,525 44,850,000 180,542,363 (14,533,855) (924,995) 6,784,401 (113,310) 10,441,324 88,710,388 567,416,687
Balance at 31 December 2020 225,822,846 25,837,525 44,850,000 180,542,363 (14,533,855) (924,995) 6,784,401 (113,310) 10,441,324 88,710,388 567,416,687
Allocation of 2020 result as per AGM
resolution of 21 April 2021
- distribution of dividends (80,821,552) (80,821,552)
- allocation to reserves 317,569 7,571,267 (7,888,836) -
Fair value stock option 3,578,166 3,578,166
Exercise of stock otion 521,292 8,462,413 (1,873,700) 7,110,005
Movements from transactions with
shareholders
521,292 8,462,413 317,569 7,571,267 - - 1,704,466 - - (88,710,388) (70,133,381)
Prot (loss) after taxes 107,098,783 107,098,783
Other components of comprehensive
income
1,018,505 (21,109) 997,396
Comprehensive income (loss) - - - - - 1,018,505 - (21,109) - 107,098,783 108,096,179
Balance at 31 December 2021 226,344,138 34,299,938 45,167,569 188,113,630 (14,533,855) 93,510 8,488,867 (134,419) 10,441,324 107,098,783 605,379,485
Statement of changes in net equity
Explanatory notes
Separate
annual
report and
nancial
statements
174De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
E
Explanatory notes
Company business
De’ Longhi S.p.A., a company with its registered
oce in Treviso whose shares are listed on the Eu-
ronext Milan run by Borsa Italiana, is the parent
company of the De’ Longhi Group and performs
holding company activities involving the manage-
ment and supply of centralized services to its sub-
sidiaries and the management of subsidiary
undertakings.
Accounting standards
The nancial statements of De’Longhi S.p.A. at 31
December 2021 have been prepared on the basis
of the international accounting and nancial report-
ing standards issued by the International Account-
ing Standards Board (IASB), including the SIC and
IFRIC interpretations, as endorsed by the European
Commission (at the date of 31 December 2021),
pursuant to EC Regulation 1606 of 19 July 2002.
The following documents have been used for inter-
pretation and application purposes even though
not endorsed by the European Commission:
• Framework for the Preparation and Presentation
of Financial Statements (issued by the IASB in
2001);
• Implementation Guidance, Basis for Conclu-
sions, IFRIC and other documents issued by the
IASB or IFRIC to complement the accounting
standards;
• Interpretations published by the Italian Accounting
Board relating to how to apply IAS/IFRS in Italy.
The accounting policies and measurement bases
used for preparing the nancial statements at 31
December 2021 are the same as those used for
preparing the nancial statements at 31 December
2020; the new amendments and accounting stand-
ards, described below, had no signicant impacts
on the present nancial statements.
The nancial statements at 31 December 2021
comprise the income statement, the statement of
comprehensive income, the statement of nancial
position, the statement of cash ows, the state-
ment of changes in net equity and these explanato-
ry notes.
The statement of nancial position has been pre-
pared on a basis that distinguishes between cur-
rent and non-current items.
The income statement has been presented on the
basis of the nature of expense, being a suitable
structure for faithfully representing the company’s
performance.
The statement of cash ows has been prepared
using the “indirect method” allowed by IAS 7.
The present nancial statements and notes are
presented in Euro (the company’s functional cur-
rency) with all amounts in nancial statements pre-
sented in Euro, as required by the Italian Civil Code,
while amounts in explanatory notes are rounded to
thousands of Euro, unless otherwise indicated.
The nancial statements have been prepared on
the historical cost basis, adjusted as required for
the valuation of certain nancial instruments, and
under the assumption of going concern. Even
though the unpredictability of the epidemic’s poten-
tial impact is the source of considerable uncertain-
ty, the Company, in light of its nancial stability, the
actions taken to limit risks and its business model,
as well as the good results obtained in 2021, be-
lieves that there are no elements which could com-
promise the business as a going concern as per
paragraph 25 of IAS 1. Furthermore, at the date of
this Report there are no elements, connected to the
health crisis, to report that had a direct and signi-
cant impact on the gures in the nancial
statements.
The risks and uncertainties relating to the business
are described in a specic section of the Report on
operations. The methods used by the company to
manage nancial risks are described in note 33.
Risk management of the present Explanatory
notes.
International accounting standards adopted
by the Company for the rst time
A few amendments were applicable for the rst
time as of 1 January 2021 which did not have a ma-
terial impact on the Group’s report.
The Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4
and IFRS 16 Interest Rate Benchmark Reform -
Phase 2, endorsed on 13 January 2021 relate to the
effect that the interest rate benchmark reform and
its substitution with alternative benchmark rates
could have on nancial reporting.
The Amendments to IFRS 4 - Insurance contracts -
deferral of IFRS 9, endorsed on 15 December 2020,
175De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
which allow insurance companies to defer applica-
tion of IFRS 9, are not relevant for the Company.
With Regulation 1424/2021 of 30 August 2021 the
European Commission endorsed the document
issued by IASB, Covid-19-Related Rent Conces-
sions beyond 30 June 2021 (Amendments to IFRS
16) which extends the period of application of the
amendment to IFRS 16 issued in 2020. The amend-
ment introduced a practical expedient which sim-
plies the accounting of any concessions on
leases, like the temporary discounts or exemptions
from payments, received by tenants during the pan-
demic. The amendment took effect as of 1 April
2021 and did not have any impact on the Compa-
ny’s nancial statements.
International nancial reporting standards
and/or not yet applicable
On 14 May 2020 IASB published amendments, ef-
fective as of 1 January 2022, relating to several
standards, namely Amendments to IFRS 3 Busi-
ness Combinations, Amendments to IAS 16 Prop-
erty, Plant and Equipment, Amendments to IAS 37
Provisions, Contingent Liabilities and Contingent
Assets.
As part of the annual improvements, changes were
also made to IFRS 1 - First-time Adoption of Inter-
national Financial Reporting Standards, IFRS 9 - Fi-
nancial Instruments, IAS 41 - Agriculture and the il-
lustrative examples accompanying IFRS 16
- Leases.
With Regulation 2036/2021 of 19 November 2021
the European Commission adopted IFRS 17 - Insur-
ance contracts which will substitute the current
IFRS 4. The new standard establishes rules for the
recognition, measurement, presentation and dis-
closure of insurance contracts; it will be applied to
all insurance contracts using an accounting model
based on the discounted cash ow method, adjust-
ed for risk, and a Contractual Service Margin (CSM).
The new standard will be applicable as from 1 Jan-
uary 2023.
In February 2021 IFRS: Denition of Accounting Es-
timates - Amendments to IAS 8 and Disclosure of
Accounting Policies - Amendments to IAS 1 and
IFRS Practice Statement 2, applicable as of 1 Janu-
ary 2023, were issued. The purpose of these
amendments is to improve the disclosure of ac-
counting policies in order to provide investors and
other primary users of the nancial statements
with more useful information, as well as help com-
panies distinguish between the changes in ac-
counting estimates from changes in the account-
ing policy.
On 7 May 2021 IASB published Deferred Tax related
to Assets and Liabilities arising from a Single
Transaction - Amendments to IAS 12 which speci-
es how deferred tax in relation to leases and de-
commissioning obligations should be accounted
for. The amendments are effective for annual re-
porting periods beginning on or after 1 January
2023. Early adoption is permitted.
The date for rst time application of the Amend-
ments to IFRS 10 and IAS 28 - Sale or Contribution
of Assets between an Investor and its Associate or
Joint Venture has yet to be determined. The pur-
pose of the amendments is to clarify how to ac-
count for the loss of control of a business (gov-
erned by IFRS 10), as well as downstream
transactions (governed by IAS 28) if the object of
the transaction was or was not a business, as de-
ned in IFRS 3.
Disclosure by operating segments
Segment information is reported only with refer-
ence to the consolidated nancial statements, as
allowed by IFRS 8.
Principal accounting policies
Intangible assets
Other intangible assets
Other intangible assets purchased or internally
generated are recognized as assets in accordance
with IAS 38 Intangible assets, when it is probable
that the future economic benets attributable to
their use will ow to the company and when the
cost of the asset can be reliably measured.
These assets are valued at purchase or production
cost and amortized, if they have a nite life, on a
straight-line basis over their useful life, generally
estimated in 4 years.
Property, plant and equipment
Land, property, plant and machinery
Property, plant and equipment owned by the Com-
pany are recorded at purchase or production cost
and systematically depreciated over their residual
useful lives.
The cost of assets qualifying for capitalization also
includes the borrowing costs directly attributable to
the acquisition, construction or production of the
asset itself.
Subsequent expenditure is capitalized only if it in-
creases the future economic benets owing to the
enterprise.
Ordinary and/or routine maintenance and repair
costs are directly expensed to the income
statement when incurred. Costs relating to the ex-
pansion, modernization or improvement of owned
or leased assets are capitalized to the extent that
they qualify for separate classication as an asset
or part of an asset under the component approach,
whereby every component whose useful life and
related value can be autonomously assessed must
be treated individually.
All other costs are expensed to income as
incurred.
The useful lives, estimated by the Company for its
various categories of property, plant and equip-
ment, are as follows:
Industrial and commercial
equipment
1 year
Other 4 - 8 years
Right-of-use assets
In accordance with IFRS 16 the right-of-use asset is
valued at cost plus the present value of future pay-
ments (discounted at the incremental borrowing
rate, namely the interest rate that the lessee must
pay over the term of the loan and similar guaran-
tees), the initial costs incurred directly by the
lessee, and any advance lease payments made.
The asset value is systematically depreciated.
Impairment of non-nancial assets
The Company tests, at least once a year, whether
the book value of intangible assets and property,
plant and equipment reported in the nancial state-
ments has suffered any impairment loss. If there is
evidence of impairment, book value is written down
to the related recoverable amount.
176De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
If it is not possible to estimate the recoverable
amount of an individual asset, the Company as-
sesses whether the cash-generating unit to which it
belongs is impaired.
Financial instruments
Financial assets
Upon initial recognition, nancial assets are classi-
ed based on the measurement methods used in
one of the three categories found in IFRS 9. The
classication depends on the nature of the contrac-
tual cash ows and the business model the com-
pany uses to manage them.
The business model refers to the way in which the
cash ows are generated which can be from the
collection of contractual cash ows, the sale of
assets or both.
A nancial asset is classied among the assets
valued at amortized cost if held as part of a busi-
ness model where the objective is collecting con-
tractual cash ows represented solely by payments
to be made on certain dates, principal and interest.
The valuation is made based on the effective inter-
est rate.
A nancial asset is classied among the assets
valued at fair value with changes passing through
the comprehensive income statement if held as
part of a business model where the objective is col-
lecting contractual cash ows and selling the
assets and the cash ows contemplated under the
contract refer solely to payments of principal and
interest made on predetermined dates. For the
assets included in this category, the interest receiv-
able, the foreign exchange differences and losses
in value are recognized in the income statement for
the reporting period; other changes in fair value are
recognized in the comprehensive income state-
ment. Upon elimination, the cumulative change in
fair value recognized as other comprehensive
income is released to the income statement.
During the initial recognition phase, equity instru-
ments may be included in the category of assets
measured at fair value with changes recognized in
the comprehensive income statement.
The category of assets valued at fair value with
changes recognized in the income statement in-
clude assets held for trading, namely acquired to be
sold in the short-term, and the assets designated
as such.
Upon initial recognition, equity instruments not
held for trading may be included in the category of
nancial instruments measured at fair value with
changes recognized in the comprehensive income
statement. This choice may be made for each
asset and is irrevocable.
The trade receivables without a signicant nanc-
ing component are valued at the transaction price
determined in accordance with IFRS 15.
Financial liabilities
Financial liabilities refer mainly to loans valued at
amortized cost based on the effective interest rate.
Financial liabilities are derecognized when the un-
derlying obligation is extinguished, cancelled or
fullled.
Lease liabilities
Lease liabilities equal the present value of the pay-
ments payable and not yet paid at the date of the
nancial statements discounted at the interest rate
implicit in the lease, if easily determined, or alterna-
tively, at the incremental borrowing rate which is
the rate that the lessee would pay on a loan with a
similar duration and conditions. In the event the
lease term, purchase options, the residual value
guaranteed, or variable payments based on indices
or rates, are redetermined, the lease liability is
restated.
Derivatives
Derivatives are used solely for hedging purposes, in
order to reduce exposures to currency and interest
rate risk. As allowed by IFRS 9, derivatives may
qualify for special hedge accounting only when, at
the inception of the hedge, the following conditions
are satised:
• there is a formal designation that the instrument
is a hedging one;
• there is formal documentation of the hedging re-
lationship, which is expected to be highly
effective;
• the effectiveness of the hedge can be reliably
measured;
• the hedge is highly effective throughout the dif-
ferent nancial reporting periods for which it was
designated.
In accordance with IFRS 9, all derivatives are meas-
ured at fair value.
If nancial instruments qualify for hedge account-
ing, the following treatment applies:
Fair value hedge - If a derivative instrument is des-
ignated as a hedge of the exposure to changes in
the fair value of a recognized asset or liability that is
attributable to a particular risk that will affect prot
or loss, the gain or loss from remeasuring the hedg-
ing instrument at fair value should be recognized in
the income statement. The gain or loss on the
hedged item attributable to the hedged risk adjusts
the carrying amount of the hedged item and is rec-
ognized in the income statement.
Cash ow hedge - If a derivative instrument is des-
ignated as a hedge of the exposure to variability in
cash ows attributable to a highly probable fore-
cast transaction which could affect prot or loss,
the effective portion of the gains or losses on the
hedging instrument is recognized directly in the
statement of comprehensive income. The effective
portion of the cumulative gains or losses are re-
versed from net equity and reclassied to prot or
loss in the same period in which the hedged trans-
action is reported in the income statement. Gains
or losses associated with a hedge or part thereof
that has become ineffective are reclassied to the
income statement. If a hedging instrument or
hedging relationship is terminated, but the transac-
tion being hedged has not yet occurred, the cumu-
lative gains and losses, recorded up until then in the
statement of comprehensive income, are reported
in the income statement at the same time that the
hedged transaction occurs. If the hedged transac-
tion is no longer expected to occur, the unrealized
gains or losses reported directly in net equity are
immediately reclassied to the income statement.
If hedge accounting cannot be applied, the gains or
losses arising from the fair value measurement of
the derivatives are transferred immediately to the
income statement.
Net investment hedge - Hedges of a net invest-
ment in a foreign operation, including a hedge of a
monetary item that is accounted for as part of the
net investment, are accounted for in a way similar
to cash ow hedges. Gains or losses on the hedg-
ing instrument relating to the effective portion of
the hedge are recognized in the statement of com-
prehensive income, while any gains or losses relat-
ing to the ineffective portion are recognized in the
statement of prot or loss. On disposal of the for-
eign operation, the cumulative value of any such
gains or losses recorded in equity is transferred to
the statement of prot or loss.
177De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
Employee benet
Pension and other incentive plans
Net obligations relating to employee benet plans,
chiey the provision for severance indemnities (for
the portion retained in the company) and pension
funds, are recorded at the expected future value of
the benets that will be received and which have
accrued at the reporting date. The Company’s obli-
gation to nance dened benet pension funds and
the annual cost reported in the income statement
are determined by independent actuaries using the
projected unit credit method.
Equity based compensation
The Company grants additional benets to the
Chief Executive Ocer, a limited number of execu-
tives and key resources under the form of stock
options. Based on IFRS 2 Share-based payment,
the current value of the stock option determined on
the grant date is recognized on a straight-line basis
in the income statement as a payroll cost in the
period between the grant date and the date on
which the rights granted to employees, executives
and others who routinely provide services to one or
more Group companies parties fully vest, with a
corresponding increase in equity.
At each reporting date the Company will revise esti-
mates based on the number of options that are ex-
pected to vest, independent of the fair value of the
options. Any differences with respect to the original
estimates will be recognized in the income state-
ment with a corresponding increase in equity.
Once the stock option is exercised, the amounts re-
ceived by the employee, net of transactions costs,
will be added to the share capital in the amount of
the nominal value of the shares issues. The remain-
der will be recognized in the share premium
reserve.
The fair value of the stock options is determined
using the Black-Scholes model which takes into
account the conditions for the exercise of the right,
the current share price, expected volatility, a risk
free interest rate, as well as the non-vesting
conditions.
The fair value of the stock options is included
within the Stock option Reserve.
Provisions for contingencies and other charges
The Company recognizes provisions for contingen-
cies and charges when (i) it has a present obliga-
tion (legal or constructive) to third parties (ii) it is
probable that the company will need to employ re-
sources to settle the obligation and (iii) a reliable
estimate can be made of the amount of the obliga-
tion. Changes in these estimates are reected in
the income statement in the period in which they
occur (also see the comments in the paragraph on
“Estimates and assumptions”).
Where the effect of the time value of money is ma-
terial and the date of extinguishing the liability can
be reasonably estimated, provisions are stated at
the present value of the expected expenditure,
using a discount rate that reects current market
assessments of the time value of money and the
risks specic to the liability.
An increase in the amount of the provision for the
time value of money is accounted for in interest ex-
pense. Contingencies for which the probability of a
liability is remote are disclosed in the notes but no
provision is recognized.
Recognition of revenues
The item “Revenues” includes the consideration re-
ceived for services rendered.
Revenues represent the consideration owed in ex-
change for the transfer of services to the customer,
excluding amounts received on behalf of third par-
ties. The Company recognizes the revenue when
contractual obligations are fullled, namely when
control of the service is transferred to the
customer.
Based on the ve-step model introduced in IFRS 15,
the Company recognizes revenue after the follow-
ing requirements have been met:
a. the parties have approved the contract (in writ-
ing, orally or in accordance with other common
commercial practices) and are committed to
fullling the respective performance obliga-
tions; an agreement between the parties which
creates rights and obligations regardless of the
form of the agreement has, therefore, been
created;
b. the rights of each of the parties in relation to the
services to be transferred can be identied;
c. the payment terms for the goods or services to
be transferred can be identied;
d. the contract has commercial substance;
e. it is probable that the Company will receive the
consideration to which it is entitled in exchange
for the services transferred to the customer.
If the consideration referred to in the contract has a
variable component, the Company will estimate the
amount of the consideration it will be entitled to in
exchange for the services transferred to the
customer.
Costs and expenses
Costs and expenses are accounted for on an accru-
al basis.
Dividends
Dividend distributions represent a movement in net
equity in the period in which they are declared by
the shareholders in general meeting.
Dividends received are reported when the Compa-
ny is entitled to receive the payment.
Income taxes
Income taxes include all the taxes calculated on the
Company’s taxable income. Income taxes are re-
corded in the income statement, except for those
relating to items directly debited or credited to net
equity, in which case the associated tax is recog-
nized directly in net equity.
Deferred taxes are provided on the basis of global pro-
vision for the liability. They are calculated on all the tem-
porary differences emerging between the tax base of
an asset or liability and their book value, except for dif-
ferences arising from investments in subsidiaries
which are not expected to reverse in the foreseeable
future. Deferred tax assets on the carry forward of
unused tax losses and tax credits are recognized to the
extent that it is probable that future taxable prot will be
available against which these can be recovered. Cur-
rent and deferred tax assets and liabilities may be
offset when the income taxes are charged by the same
tax authority and when there is a legal right of set-off.
Deferred tax assets and liabilities are calculated at
the tax rates that are expected to apply to the period
when the asset is realized or the liability settled.
Deferred taxes on reserves of distributable earn-
ings in subsidiaries are recognized only if it is prob-
able that such reserves will be distributed.
Any uncertainty regarding tax treatments is consid-
ered in the tax calculation in accordance with the
recommendations of IFRIC 23 Uncertainty over
Income Tax Treatments.
178De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
Estimates and assumptions
These nancial statements, prepared in accord-
ance with IFRS, contain estimates and assump-
tions made by the Company relating to assets and
liabilities, costs, revenues and contingent liabilities
at the reporting date. These estimates are based
on past experience and assumptions considered to
be reasonable and realistic, based on the informa-
tion available at the time of making the estimate.
The assumptions relating to these estimates are
periodically reviewed and the related effects re-
ected in the income statement in the same period;
actual results could therefore differ from these
estimates.
The following paragraphs discuss the principal as-
sumptions used for estimation purposes and the
principal sources of uncertainty, that have a risk of
causing material adjustment to the book value of
assets and liabilities in the future; details of book
value can be found in the individual explanatory
notes.
Employee benets
The cost of dened benet pension plans is deter-
mined using actuarial valuations, based on statisti-
cal assumptions regarding discount rates, expect-
ed returns on investments, future salary growth
and mortality rates.
The Company believes the rates estimated by its
actuaries to be reasonable for the year-end valua-
tions, but cannot rule out that large future changes
in rates could have a material impact on the liabili-
ties recognized in the nancial statements.
Recoverability of deferred tax assets
Deferred tax assets could include those relating to
carry forward tax losses to the extent that there is
likely to be sucient future taxable prot against
which such losses can be recovered.
Management must use their discretion when deter-
mining the amount of deferred tax assets for rec-
ognition in the nancial statements. They must es-
timate the likely timing of reversal and the amount
of future taxable prot, as well as the future tax
planning strategy.
Provisions for contingencies
The company makes several provisions against
disputes or risks of various kinds relating to differ-
ent matters falling under the jurisdiction of different
countries. The determination, probability and quan-
tication of these liabilities involve estimation pro-
cesses that are often very complex, for which man-
agement uses all the available information at the
date of preparing the nancial statements, includ-
ing with the support of legal and tax advisors.
179De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
C
Comments on the
income statement
1. Revenues
These are analyzed as follows:
2021 2020 Change
Gain on xed assets disposal 16 - 16
Damages reimbursed 9 30 (21)
Out-of-period gains 9 23 (14)
Other income 14,513 8,794 5,719
Total 14,547 8,847 5,700
“Other income” includes €14,443 thousand in revenue from related parties, as reported in Appendix 4. These
revenues refer primarily to costs charged back to subsidiaries for services rendered.
2. Raw and ancillary materials, consumables and goods
These are analyzed as follows:
2021 2020 Change
Other purchases 51 52 (1)
Total 51 52 (1)
3. Payroll costs
The gures relating to the provisions made by the Company relative to severance and long-term benets are
summarized in note 26. Employee benets.
This item includes the fair value of the stock option plan which amounted to €3,578 thousand in the report-
ing period (€2,502 thousand at 31 December 2020); please refer to nota 22. Reserves for more information.
In 2021 this item also includes non-recurring costs of €83 thousand relative to the special bonus paid to
employees.
4. Services and other operating expenses
These are analyzed as follows:
2021 2020 Change
Consulting services 6,050 3,919 2,131
Directors' emoluments 5,004 4,290 714
Global marketing costs 2,920 2,643 277
Insurance 2,784 2,524 260
Travel and entertaining 267 158 109
Statutory auditors' emoluments 144 146 (2)
Rentals and leasing 117 117 -
Telecommunication costs 32 31 1
Advertising and promotional activities 6 7 (1)
Other sundry services 3,331 1,970 1,361
Total services 20,655 15,805 4,850
Sundry taxes 134 225 (91)
Other 186 165 21
Total other operating expenses 320 390 (70)
Total services and other operating expenses 20,975 16,195 4,780
“Cost of services” includes the costs incurred by the Company to carry out its activities as a holding compa-
ny and a few centralized costs shared by several Group companies (global marketing costs) that are subse-
quently charged back to the subsidiaries.
“Costs for the use of third-party assets” includes the operating costs for contracts that are not or do not contain
leases (€102 thousand; €97 thousand at 31 December 2020), as well as the costs for leases of less than twelve
months (€15 thousand; €20 thousand at 31 December 2020); for more information, please refer to note 10. Leases.
“Services and other operating expenses” include €2,034 thousand in costs from related parties, as reported
in Appendix 4 and €9 thousand in non-recurring costs related to reorganization of the Group’s structure
(€187 thousand at 31 December 2020).
180De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
5. Amortization
These are analyzed as follows:
2021 2020 Change
Amortization of intangible assets 232 497 (265)
Depreciation of property, plant and equipment 34 9 25
Depreciation of right of use assets 295 271 24
Total 561 777 (216)
For further information on amortization and depreciation, please see the tables showing changes in intangi-
ble assets, property, plant and equipment, and leases.
6. Financial income (expenses)
Net nancial income and expenses are broken down as follows:
2021 2020 Change
Dividends 133,327 110,949 22,378
Financial income (expenses) from equity
investments
133,327 110,949 22,378
Gains (losses) on currency hedging transactions 10 (73) 83
Exchange gains (losses) (48) 74 (122)
Exchange gains (losses) (38) 1 (39)
Interest income from loans 808 514 294
Bank interest income 3 3 -
Financial income 811 517 294
Interest expenses on long-term loans and
borrowings
(1,774) (1,562) (212)
Interest expenses on bonds (3,628) (2,527) (1,101)
Interest expenses on short-term loans and
borrowings
(1) (1) -
Financial expenses (5,403) (4,090) (1,313)
Interest for leasing (13) (15) 2
Other sundry income (expenses) (622) (648) 26
Other nancial income (expenses) (635) (663) 28
Financial income (expenses) 128,062 106,714 21,348
“Financial income (expenses)” includes €134,089 thousand in income from related parties, as reported in
Appendix 4.
Dividends relate primarily to amounts declared by the subsidiaries De’Longhi Appliances S.r.l., DeLonghi
Benelux S.A., De’Longhi Kenwood Gmbh, E-Services S.r.l. e De’Longhi Capital Services S.r.l..
For more information on leases, please see note 10. Leases.
181De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
7. Income taxes
These are analyzed as follows:
2021 2020 Change
Current tax assets 5,902 4,077 1,825
Advanced (deferred) taxes (170) 579 (749)
Total 5,732 4,656 1,076
The Company exercised, jointly with the consolidator DeLonghi Industrial S.A., the option to adhere to “Do-
mestic Tax Consolidation”, as permitted under articles 117 et seq of Presidential Decree n. 917/86 for the
three-year period 2019-2021.
“Deferred income tax liabilities (assets)” report the taxes calculated on the temporary differences arising
between the carrying amount of assets and liabilities and the corresponding tax base, and the distributable
earnings of subsidiaries.
More information on deferred taxes can be found in note 25. Deferred tax liabilities.
The actual and theoretical tax charge are reconciled as follows:
2021 % 2020 %
Prot before taxes 101,367 100.0% 84,054 100.0%
Theoretical taxes (24,328) (24.0%) (20,173) (24.0%)
Permanent tax differences
(dividends, net of disallowable
costs) and other effects
30,060 29.7% 24,829 29.5%
Actual taxes 5,732 5.7% 4,656 5.5%
182De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
C
Comments on the statement
of nancial position: assets
Non-current assets
8. Intangible assets
These are analyzed as follows:
31.12.2021 31.12.2020
Gross Net Gross Net Change
Patents 2,244 102 2,119 210 (108)
Total 2,244 102 2,119 210 (108)
The following table reports movements during 2021:
Patents
Net opening balance 210
Additions 124
Amortization (232)
Net closing balance 102
The increases refer to the purchase of software during the year.
9. Other tangible assets
These are analyzed as follows:
31.12.2021 31.12.2020
Gross Net Gross Net Change
Industrial and commercial
equipment
19 - 19 - -
Other 246 162 220 60 102
Total 265 162 239 60 102
The following table reports movements during 2021:
Other
Net opening balance 60
Additions 136
Depreciation (34)
Net closing balance 162
10. Leases
The Company’s current leases refer primarily to property and automobiles leased for operational purposes.
The right-of-use recognized for leased goods and the changes in 2021 are detailed below:
Land and buildings Other Total
Net opening balance 1,061 164 1,225
Additions 34 70 104
Depreciation (206) (89) (295)
Net closing balance 889 145 1,034
183De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
In 2021, subsequent to the application of the new IFRS 16 Leases, €295 thousand of depreciation were rec-
ognized in the income statement and €13 thousand of interest payable and while € 310 thousand of costs
represented by the lease payments made were eliminated.
Financial liabilities for leases amounting to €1,038 thousand (of which €761 thousand expiring beyond 12
months) were recognized at 31 December 2021.
The nancial liabilities for leases include amounts owed associates of €810 thousand (of which €634 thou-
sand expiring beyond 12 months) as shown in Appendix 4.
The maturities of the undiscounted lease liabilities are shown below:
Undiscounted
ows at
31.12.2021
Payable in one
year
Payable in 1-5
years
Payable in more
than ve years
Lease payables 1,062 288 774 -
11. Equity investments
These are analyzed as follows:
31.12.2021 31.12.2020 Change
DeLonghi Benelux S.A. 266,737 266,737 -
De’Longhi Appliances S.r.l. 242,678 242,678 -
De’Longhi Deutschland GmbH 40,800 40,800 -
De’Longhi Capital Services S.r.l. 6,005 6,005 -
E-Services S.r.l. 5,264 5,264 -
De’Longhi Romania S.r.l. 3,078 3,078 -
De’Longhi Kenwood GmbH 2,900 2,900 -
Clim.Re S.A. 54 54 -
De’Longhi Polska Sp.Zo.o. - - -
Total 567,516 567,516 -
The list of equity investments and the related movements during 2021 can be found in Appendix 3.
Equity investments in subsidiaries are recognized at the acquisition or formation cost.
The impairment test carried out has not revealed any signicant evidence that equity investments are
impaired.
12. Non-current receivables
This balance is analyzed as follows:
31.12.2021 31.12.2020 Change
Receivables from subsidiary
companies
109 116 (7)
Security deposits 3 3 -
Total 112 119 (7)
Appendix 4 contains details of “Receivables from subsidiary companies”.
13. Other non-current nancial assets
Details are as follows:
31.12.2021 31.12.2020 Change
Fair value of derivatives 316 - 316
Total 316 - 316
More details on the fair value of derivatives can be found in note 33. Risk management.
184De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
Current assets
14. Trade receivables
These are analyzed as follows:
31.12.2021 31.12.2020 Change
Trade receivables due within
12 months
1,271 3,418 (2,147)
Allowance for bad debts - - -
Total 1,271 3,418 (2,147)
“Trade receivables” include €1,269 thousand in receivables from related parties, as reported in Appendix 4.
There were no changes in the allowance for doubtful accounts in the year.
Trade receivables do not include any amounts due beyond 12 months.
15. Current tax assets
These are detailed as follows:
31.12.2021 31.12.2020 Change
Direct taxes 796 - 796
Total 796 - 796
In 2021 the Company exercised the option to adhere to “Domestic Tax Consolidation” as permitted under
Title II Section of Presidential Decree n. 917/86, in order to optimize the nancial management of relation-
ships with the tax authorities.
16. Other receivables
These are analyzed as follows:
31.12.2021 31.12.2020 Change
VAT receivables 4,751 6,119 (1,368)
Advances to suppliers 184 151 33
Prepaid costs 93 37 56
Employees 12 2 10
Tax refunds requested - 2 (2)
Other 11,062 5,276 5,786
Total 16,102 11,587 4,515
In 2021 the Company exercised the option to adhere to “Group VAT liquidation” pursuant to Ministerial
Decree n. 13/12/1979; the item “VAT credits” reects the relative credit.
“Other receivables” includes €10,518 thousand in amounts due from related parties, as reported in Appendix
4, relating primarily to “Domestic Tax Consolidation”.
None of the other receivables is due beyond 12 months.
17. Current nancial receivables and assets
These are analyzed as follows:
31.12.2021 31.12.2020 Change
Financial receivables 885,926 577,570 308,356
Total 885,926 577,570 308,356
“Financial receivables” refers to receivables to the subsidiary company De’Longhi Capital Services S.r.l., re-
lating to the cash pooling agreement.
“Current nancial receivables and assets” includes amounts payable by related parties of €885,918 thou-
sand, as reported in Appendix 4.
None of the current nancial receivables is due beyond 12 months.
18. Cash and cash equivalents
This balance consists of surplus liquidity on bank current accounts.
185De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
C
Comments on the statement
of nancial position: net
equity and liabilities
Net equity
The primary objective of the company’s capital
management is to maintain a solid credit rating and
adequate capital ratios in order to support its busi-
ness and maximize value for shareholders.
During De’Longhi S.p.A.’s Annual General Meeting
held on 21 April 2021 shareholders resolved to dis-
tribute a total of €80,822 thousand as dividends, of
which €80,336 thousand was paid during the year.
Changes in net equity are reported as part of the -
nancial statements; comments on the main com-
ponents and their changes are provided below.
19. Treasury shares
At 31 December 2021 the Company held 895,350
treasury shares for a total of €14,534 thousand,
purchased pursuant to the buyback program ap-
proved during the Ordinary Shareholders’ Meeting
held on 30 April 2019 and subsequently renewed
on 22 April 2020 - after revoking the previous au-
thorization granted by shareholders, for the unexe-
cuted part - for a period of up to a maximum of 18
months (namely through 22 October 2021).
The exercise price shall be equal to the arithmetic
average of the ocial market price of the Compa-
ny’s shares recorded on the “Euronext Milan” man-
aged by Borsa Italiana S.p.A. 60 calendar days prior
to the date on which the Plan and the relative regu-
lations were approved by shareholders during the
Annual General Meeting.
The options may be exercised by the Beneciaries
- on one or more occasions - solely and exclusively
during the exercise period, namely during the fol-
lowing timeframes:
• between 15 May 2019 and 31 December 2022
(more specically, between either 15 May - 15 July;
1 September - 15 October; 15 November - 15 Janu-
ary), for up to a total maximum amount equal to
50% of the total options assigned each beneciary;
• between 15 May 2020 and 31 December 2022
(more specically, between either 15 May - 15
July; 1 September - 15 October; 15 November -
15 January) for the remaining 50% of the total
options assigned each beneciary.
Any option not exercised by the end of the exercise
period will be automatically expire and the bene-
ciary will have no right to any compensation or
indemnity.
All shares will have regular dividend rights and,
therefore, will be the same as all other shares out-
standing at their issue date, and will be freely trans-
ferrable by the beneciary.
Please refer to the Annual Report on the Remunera-
tion Policy and Compensation Paid for more infor-
mation on the Plan.
20. Stock option plans
During the Annual General Meeting held on 14 April
2016 shareholders approved the share-based in-
centive plan “Stock Option Plan 2016-2022”.
In order to service the plan, during the AGM share-
holders resolved to increase share capital against
payment by up to a maximum nominal amount of
€3,000,000 by 31 December 2022 through the
issue, including on one or more occasions, of a
maximum of 2,000,000 ordinary shares at a par
value of €1.5 each pari passu with all shares out-
standing at the issue date and with dividend rights.
The purpose of the plan is to maintain the loyalty of
the beneciaries by recognizing the contribution
that they make to increasing the value of the Group.
The plan has a duration of seven years and will, at
any rate, expire on 31 December 2022.
The beneciaries were identied by the Board of
Directors based on the proposal of the Remunera-
tion and Appointments Committee or the Chief Ex-
ecutive Ocer of the Parent Company De’Longhi
S.p.A., after having consulted with the Board of
Statutory Auditors.
The options were granted free of charge: the bene-
ciaries, therefore, were not expected to pay any
sort of consideration upon assignment. Converse-
ly, exercise of the option and the resulting subscrip-
tion of the shares is subject to payment of the exer-
cise price.
Each option grants the right to subscribe one share at
the conditions set out in the relative regulations.
For the purposes of valuation under IFRS 2 - Share-
based payments, two different tranches were de-
ned for each award which contain the same
number of options broken down equally into the
plan’s two exercise periods.
The fair value of the stock options at the assign-
ment date is determined using the Black-Scholes
model which takes into account the conditions for
the exercise of the right, the current share price, ex-
pected volatility, a risk-free interest rate, as well as
the non-vesting conditions.
Volatility is estimated based on the data of a
market information provider and corresponds to
the estimated volatility of the stock over the life of
the plan.
186De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
The assumptions used to determine the fair value of the options assigned are shown below:
2017 award 2016 award
First tranche fair value 7.6608 5.3072
Second tranche fair value 7.4442 5.2488
Expected dividends (Euro) 0.8 0.43
Estimated volatility (%) 28.09% 33.23%
Historic volatility (%) 31.12% 36.07%
Market interest rate Euribor 6M Euribor 6M
Expected life of the options (years) 2.142/3.158 2.51 / 3.53
Exercise price (Euro) 20.4588 20.4588
A total of 1,396,092 options have been exercised, of which 347,528 in 2021.
During the Annual General Meeting held on 22 April 2020, shareholders approved the stock-based incentive
plan “Stock Option Plan 2020-2027”.
In order to service the plan, during the AGM shareholders resolved to further increase share capital against
payment by up to a maximum nominal amount of €4,500,000 through the issue (if treasury shares are insuf-
cient), including on one or more occasions, of a maximum of 3,000,000 ordinary shares at a par value of
€1.5 each pari passu with all shares outstanding at the issue date and with dividend rights.
The purpose of the plan is to foster the loyalty of the beneciaries, incentivizing them to stay with the Group
by linking their compensation to the achievement of the company’s medium/long-term goals.
The plan has a duration of around eight years and will, at any rate, expire on 31 December 2027.
The beneciaries were identied by the Board of Directors based on the proposal of the Remuneration and
Appointments Committee or the Chief Executive Ocer of the Parent Company De’Longhi S.p.A., after
having consulted with the Board of Statutory Auditors.
The options are granted free of charge: the beneciaries, therefore, will not be expected to pay any sort of
consideration upon assignment. Conversely, exercise of the option and the resulting subscription of the
shares will be subject to payment of the exercise price.
Each option grants the right to subscribe one share at the conditions set out in the relative regulations.
The exercise price shall be equal to the arithmetic average of the ocial market price of the Company’s
shares recorded on the “Euronext Milan” managed by Borsa Italiana S.p.A. 180 calendar days prior to the
date on which the 2020-2027 Plan and the relative regulations were approved by shareholders during the
Annual General Meeting. This period of time is sucient to limit the impact that any volatility caused by the
Coronavirus crisis could have on the stock price.
187De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
Award (05.04.2020) Award (05.14.2020) Award (05.15.2020) Award (05.20.2020) Award (11.05.2020)
First tranche fair value 4.4283 4.591 4.4598 4.4637 12.402
Second tranche fair value 4.3798 4.536 4.4034 4.4049 12.0305
Expected dividends (Euro) 2.80% 2.80% 2.80% 2.80% 2.80%
Estimated volatility (%) 35.00% 34.00% 33.00% 32.00% 28.00%
Historic volatility (%) 37.00% 37.00% 37.00% 37.00% 37.00%
Market interest rate (0.2%) (0.2%) (0.2%) (0.2%) (0.2%)
Expected life of the options (years) 7.7 7.7 7.7 7.7 7.7
Exercise price (Euro) 16.982 16.982 16.982 16.982 16.982
The options may be exercised by the Beneciaries
- on one or more occasions - solely and exclusively
during the exercise period, namely during the fol-
lowing timeframes:
• between 15 May 2023 and 31 December 2027
for up to a total maximum amount equal to 50%
of the total options assigned each beneciary,
without prejudice to the black-out periods re-
ferred to in Art. 12 of the Regulations;
• between 15 May 2024 and 31 December 2027
for the remaining 50% of the total options as-
signed each beneciary, without prejudice to the
black-out periods referred to in art. 12 of the
Regulations.
Any option not exercised by the end of the exercise
period will be automatically expire and the bene-
ciary will have no right to any compensation or
indemnity.
All shares will have regular dividend rights and,
therefore, will be the same as all other shares out-
standing at their issue date, and will be freely trans-
ferrable by the beneciary.
Please refer to the Annual Report on the Remunera-
tion Policy and Compensation Paid for more infor-
mation on the Plan.
At 31 December 2020 stock options on 2,360,000
shares had been assigned; the number was un-
changed in 2021.
For the purposes of valuation under IFRS 2 - Share-
based payments, two different tranches were de-
ned for each award which contain the same
number of options broken down equally into the
plan’s two exercise periods. The fair value of each
tranche is different.
The fair value of the stock options at the assign-
ment date is determined using the Black-Scholes
model which takes into account the conditions for
the exercise of the right, the current share price,
expected volatility, a risk-free interest rate, as well
as the non-vesting conditions.
Volatility is estimated based on the data of a
market information provider and corresponds to
the estimated volatility of the stock over the life of
the plan.
The fair value of the options assigned on the date
of this Report and the assumptions made for its
evaluation are as follows:
21. Share capital
At 31 December 2020 share capital comprised
150,548,564 ordinary shares with a par value €1.5
each, for a total of €225,823 thousand.
In 2021, 347,528 options assigned under the “Stock
Option Plan 2016-2022” were exercised at an exer-
cise price of €20.4588, and consequently, the same
number of ordinary shares with a par value of €1.5
each were subscribed.
The share capital at 31 December 2021, therefore,
comprised 150,896,092 ordinary shares with a par
value of €1.5 for a total of €226,344 thousand.
In the period 1-15 January 2021 no other stock op-
tions assigned under the same plan were
exercised.
188De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
22. Reserves
These are analyzed as follows:
31.12.2021 31.12.2020 Change
Share premium reserve 34,300 25,838 8,462
Legal reserve 45,168 44,850 318
Other reserves:
- Extraordinary reserve 188,114 180,542 7,572
- Fair value and cash ow hedge reserve 93 (925) 1,018
- Stock option reserve 8,489 6,784 1,705
- Reserve for treasury shares (14,534) (14,534) -
- Actuarial evaluation reserve (134) (113) (21)
- Prot (loss) carried forward 10,441 10,441 -
Total 271,937 252,883 19,054
The “Share premium reserve” was set up following the public offering at the time of the parent company’s
listing on the Milan stock exchange, today Euronext, on 23 July 2001 which was subsequently reduced fol-
lowing the demerger transaction in favour of DeLclima S.p.A.. It amounted to €25,838 thousand at 31 De-
cember 2020 following the exercise of options assigned under the “Stock Option Plan 2016-2022”. In 2021
the reserve was increased by €34,300 thousand following further exercise of stock options under the same
plan of €8,462 thousand.
The “Legal reserve” has a balance of €45,168 thousand at 31 December 2021. The increase of €318 thou-
sand with respect to 31 December 2020 follows the allocation of prot for 2020, as approved by the AGM on
21 April 2021.
The “Extraordinary reserve” amounts to €188,114 thousand, showing an increase of 7,572 thousand against
31 December 2020 due to the allocation of the prot for 2020, as resolved during the AGM on 21 April 2021.
The “Fair value and cash ow hedge reserve” reports a balance of €93 thousand, net of €30 thousand in tax.
This amount reects the fair value of the cash ow hedge derivatives.
More details on the fair value of derivatives can be found in note 33. Risk management.
The “Stock option reserve” refers to the two share-based incentive plans described in note 20. Stock option
plans and at 31 December 2021 amounted to €8,489 thousand which corresponds to the fair value of the
options at the assignment date, recognized on a straight-line basis from the grant date through vesting.
A reserve of €2,983 thousand was allocated for the “Stock option plan 2016-2022”; the change with respect
to 31 December 2020 is explained by the exercise of 347,528 options for a total of €1,873 thousand.
A reserve of €5,506 thousand was allocated for the “Stock option plan 2020-2027”; the change with respect
to 31 December 2020 is explained by the notional cost of the plan accrued for €3,578 thousand.
The “Reserve for treasury shares” was negative for €14,534 thousand and corresponds to the amount of
treasury shares purchased pursuant to the buyback program.
The following table provides information on the permitted distribution of reserves:
Nature / Description: Amount Permitted use Available amount
Share capital 226,344
(1)
Capital reserves:
- Share premium reserve 34,300
(2)
A, B
- Treasury share reserve (14,534)
Earnings reserves:
- Legal reserve 45,168 B
- Extraordinary reserve 188,114 A, B, C 173,446
- Fair value and cash ow hedge reserve 93
- Stock option reserve 8,489
- Actuarial evaluation reserve (134)
- Prot (loss) carried forward 10,441 A, B, C 1,866
Total 498,281
(3)
175,312
(1)
There is a tax restriction over €2,853 thousand following a bonus increase in capital in 1997 using tax-suspended reserves. The
restriction was updated based on the gures from the 2021 tax return.
(2)
As allowed by art. 2431 of the Italian Civil Code, the full amount of this reserve may be distributed only if the legal reserve has
reached the amount established by art. 2430 of the Italian Civil Code.
(3)
There are tax restrictions relating to the realignment of tax and accounting values carried out in 2000 and 2005 as follows:
€54,031 thousand relating to share capital, €1,256 thousand relating to the legal reserve and €18,722 thousand relating to the
extraordinary reserve. The restriction was updated based on the gures from the 2021 tax return.
Key:
A: to increase share capital
B: to cover losses
C: distribution to shareholders
189De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
Liabilities
23. Bank loans and borrowings
Bank loans and borrowings are analyzed as follows:
Despite its sound, solid nancial situation, in 2021, as part of its strategy to extend the average maturity of
its debt and take advantage of the favorable market conditions, the Company decided to increase and diver-
sify nancial resources by signing agreements for three loans on 24 March (€100,000 thousand, duration of
5 years, repayable in quarterly instalments as of June 2022), 14 May (€50,000 thousand, duration of 5 years,
repayable in semi-annual instalments as of June 2022) and 19 May (€100,000 thousand, duration of 5 years,
repayable in semi-annual instalments), respectively, for a total of €250 million. The Company also renegoti-
ated the conditions of a term loan, reducing the overall cost and extending the nal maturity. An agreement
for a 1-year bullet loan of €50,000 thousand was also signed.
None of the nancial covenants in current loan agreements, based on the net nancial debt/net equity and
net nancial debt/EBITDA before non-recurring/stock option costs ratios (based on the consolidated nan-
cial statements), had been breached at 31 December 2021.
Most of the bank debt is oating rate; as a result of the hedges on a few of the medium/long-term loans, the
oating rate debt was swapped for xed rate debt. The fair value of the loans, calculated by discounting ex-
pected future interest ows at current market rates, does not differ signicantly from the amount of debt
recognized in the nancial statements.
Within one year One to ve years
Beyond ve
years
Balance
31.12.2021
Within one year One to ve years
Beyond ve
years
Balance
31.12.2020
Change
Overdrafts 50,004 - - 50,004 2 - - 2 50,002
Long-term loans (current portion) 170,605 - - 170,605 86,553 - - 86,553 84,052
Total short-term bank loans and borrowings 220,609 - - 220,609 86,555 - - 86,555 134,054
Long-term loans - 357,457 - 357,457 - 330,012 - 330,012 27,445
Total bank loans and borrowings 220,609 357,457 - 578,066 86,555 330,012 - 416,567 161,499
24, Other nancial payables
This balance, inclusive of the current portion, is made up as follows:
31.12.2021 31.12.2020 Change
Negative fair value of derivatives (short-
term portion)
265 707 (442)
Private placement (short‐term portion) 21,400 21,430 (30)
Other short-term nancial payables 620 1,062 (442)
Total short-term payables 22,285 23,199 (914)
Negative fair value of derivatives (one to
ve years)
- 611 (611)
Private placement (one to ve years) 85,661 85,672 (11)
Total long-term payables (one to ve
years)
85,661 86,283 (622)
Private placement (beyond ve years) 171,795 42,877 128,918
Total long-term payables (beyond ve
years)
171,795 42,877 128,918
Total 279,741 152,359 127,382
The bond loan refers to the issue and placement of €150 million in unsecured, non-convertible notes with
US institutional investors (the “US Private Placement”) completed in 2017.
190De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
The securities were issued in a single tranche, have a duration of 10 years, expire in June 2027, and an aver-
age life of 7 years. The notes will accrue interest from the subscription date at a xed rate of 1.65% per
annum.
The notes will be repaid yearly in equal installments beginning June 2021 and ending June 2027, without
prejudice to the Company’s ability to repay the entire amount in advance.
The securities are unrated and are not intended to be listed on any regulated markets. The notes are subject
to half-yearly nancial covenants in line with those contemplated in other existing loan transactions. At 31
December 2021 the covenants (ratio of the consolidated net nancial position to consolidated net equity,
ratio of consolidated net nancial position to consolidated EBITDA before non-recurring/stock option costs)
had not been breached. The issue is not secured by collateral of any kind.
On 7 April 2021 the issue of another €150 million tranche, maturing in 2041, of the USPP was nalized. It
was issued and underwritten by a leading US nancial group.
The notes were issued in a single tranche, maturing in April 2041, with a duration of 20 years and an average
life of 15 years. Interest matures on the private placement as from the subscription date at a xed annual
rate of 1.18%. The loan will be repaid annually on a straight-line basis. The rst repayment will fall due in April
2031 and the last in April 2041, without prejudice to the Company’s early repayment option.
The bonds issued are not rated and will not be traded on regulated markets.
This loan is subject to half-yearly nancial covenants, in line with those contemplated in other existing loan
transactions. At 31 December 2021 the covenants (ratio of the net nancial position to consolidated net
equity, ratio of EBITDA before non-recurring/stock option costs to the net nancial position) had not been
breached. The issue is not secured by collateral of any kind.
“Other short-term nancial payables” refers to the €133 thousand owed the subsidiary De’Longhi Capital
Services S.r.l. for nancial services rendered and remaining portion of the dividends distributed, but not paid
in the year, of €486 thousand.
More details on the fair value of derivatives, hedging both exchange rate and interest rate risk, can be found
in note 33. Risk management.
The balance includes €137 thousand in payables from related parties, as reported in Appendix 4.
Net nancial position
Details of the net nancial position are as follows:
31.12.2021 31.12.2020 Change
A. Cash 20,467 44 20,423
B. Cash equivalents - - -
C. Other current nancial assets 885,926 577,570 308,356
of which lease prepayments - - -
D. Cash, cash equivalents and other
current nancial assets (A + B + C)
906,393 577,614 328,779
E. Current nancial liabilities (72,302) (22,124) (50,178)
of which lease liabilities (277) (277) -
F. Current portion of non‐current nancial
liabilities
(170,604) (86,553) (84,051)
G. Current nancial liabilities (E + F) (242,906) (108,677) (134,229)
H. Current net nancial liabilities (D + G) 663,487 468,937 194,550
I.1. Other non-current nancial assets 109 116 (7)
I. Non-current nancial liabilities (358,218) (330,966) (27,252)
of which lease liabilities (761) (954) 193
J. Debt instruments (257,456) (128,549) (128,907)
K. Trade payables and other non-current
liabilities
- - -
L. Non-current net nancial liabilities (I +
I.1+ J + K)
(615,565) (459,399) (156,166)
M. Total nancial liabilities (H + L) 47,922 9,583 38,384
Fair value of derivatives and other
nancial non-bank assets/liabilities
51 (1,965) 2,016
Total net nancial position 47,973 7,573 40,400
Details of the net nancial position are shown in accordance with CONSOB Bulletin DEM/6064293 of 28.07.2006; in order to provide
a better representation, the other non-current nancial assets (item K1) are shown separately; for more information refer to note 12.
Non-current receivables.
Details of nancial receivables and payables with related parties are reported in Appendix 4.
For a better understanding of the changes in the net nancial position, refer to the statement of cash ows,
appended to these explanatory notes and the details provided in the Report on Operations.
191De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
25. Deered tax liabilities
“Deferred tax liabilities” include the taxes calculated
on temporary differences between the carrying
amount of assets and liabilities and their corre-
sponding tax base, and the distributable earnings
of subsidiaries.
Details are as follows:
31.12.2021 31.12.2020
Taxable
amount
Tax rate Total tax
Taxable
amount
Tax rate Total tax Change
Provisions for contingencies and other charges 35 24.0% 9 19 24.0% 5 4
Other temporary differences (7,334) 24.0% (1,760) (7,313) 24.0% (1,755) (5)
Total deferred tax assets recognized in the
income statement
(7,299) (1,751) (7,294) (1,750) (1)
Reserves distributable by subsidiaries 12,337 24.0% 2,962 11,631 24.0% 2,791 171
Total deferred tax assets/advance tax
recognized in the income statement
5,038 1,211 4,337 1,041 170
Fair value of cash ow hedge derivatives 123 24.0% 29 (1,217) 24.0% (292) 321
Actuarial valuation of provision according to IAS 19 (177) 24.0% (44) (149) 24.0% (36) (8)
Total temporary differences recognized in net
equity
(54) (15) (1,366) (328) 313
Net total 4,984 1,196 2,971 713 483
“Reserves distributable by subsidiaries” refer to the
deferred tax calculated on the accumulated re-
serves of subsidiaries that are potentially distribut-
able in the future.
There are no temporary differences or carry for-
ward tax losses for which deferred tax assets have
not been recognized.
192De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
26. Employee benets
These are analyzed as follows:
31.12.2021 31.12.2020 Change
Provision for severance indemnities 513 476 37
Long term benets 5,366 5,872 (506)
Total 5,879 6,348 (469)
The composition of the company’s workforce is analyzed in the following table:
31.12.2021 Average 2021 31.12.2020 Average 2020
White collars 39 36 34 33
Managers 19 19 18 18
Total 58 55 52 51
Provision for severance indemnities
The provision for severance indemnities includes amounts payable to the company’s employees and not
transferred to alternative pension schemes or the pension fund set up by INPS (Italy’s national social securi-
ty agency). This provision has been classied as a dened benet plan, governed as such by IAS 19 Employ-
ee benets. Severance indemnity, as an unfunded obligation, does not have any assets servicing it.
This plan is valued on an actuarial basis to express the present value of the benet payable at the end of
service that employees have accrued at the reporting date.
Movements in the year are summarized below:
Severance indemnity obligations 31.12.2021 31.12.2020 Change
Dened benet obligations 513 476 37
Net cost charged to income statement 31.12.2021 31.12.2020 Change
Interest cost on obligations 2 3 (1)
Total 2 3 (1)
Change in present value of obligations 31.12.2021 31.12.2020 Change
Present value at 1 January 476 486 (10)
Utilization of provision (3) (11) 8
Interest cost on obligations 2 3 (1)
Actuarial gain losses booked in the
statement of comprehensive income
28 (2) 30
Other 10 - 10
Present value at reporting date 513 476 37
The principal assumptions used for determining the obligations under the plan described are as follows:
Assumptions used Severance indemnity 2021 Severance indemnity 2020
Discount rate 0.9% 0.5%
Future salary increases 1.5% - 2.5% 0.5% - 1.5%
Ination rate 1.5% 0.5%
“Long-term benets” refers to the amount accrued for the incentive plan 2021-2023 in the reporting period.
This plan was approved by the Board of Directors for the Chief Executive Ocer of De’Longhi S.p.A. and a
limited number of Company executives and key resources. For further details please refer to the Report on
Remuneration.
27. Trade payables
The balance of €5,865 thousand refers to amounts payable to third parties and related parties for services
rendered. The amounts payable to related parties are broken down in Appendix 4.
Trade payables do not include any amounts due beyond 12 months.
193De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
28. Current tax liabilities
These are analyzed as follows:
31.12.2021 31.12.2020 Change
Direct taxes - 122 (122)
Total - 122 (122)
29. Other payables
These are analyzed as follows:
31.12.2021 31.12.2020 Change
Payables towards related parties 5,750 5,396 354
Employees 3,906 2,747 1,159
Withholdings payable 2,938 1,592 1,346
Social security institutions 1,399 498 901
Other 2,647 2,414 233
Total 16,640 12,647 3,993
The “Payables towards related parties” mostly refer to amounts owed as a result of the Company’s decision
to pay VAT on a group basis, under the Ministerial Decree dated 13 December 1979, as described in note 16.
Other receivables.
“Withholdings payable” relate to withholdings made by the company and payable to the tax authorities after
the reporting date.
“Social security institutions” include €1,124 thousand in payables to Italy’s principal social security agency
(INPS), and €275 thousand in payables to pension funds.
Details of payables with related parties are reported in Appendix 4.
There are no other payables due beyond 12 months.
30. Commitments
These are detailed as follows:
31.12.2021 31.12.2020 Change
Guarantees given for the benet of:
De’Longhi Capital Services S.r.l. 266,132 339,250 (73,118)
De’Longhi Australia PTY Ltd. 20,611 19,891 720
De’Longhi Kenwood A.P.A. Ltd. 18,181 17,936 245
De’Longhi LLC 7,231 6,675 556
De’Longhi Romania S.r.l. 5,809 5,367 442
NPE S.r.l.
(1)
5,000 5,000 -
De’Longhi Kenwood Korea Ltd. 1,571 1,617 (46)
De’Longhi Mexico S.a. 1,324 1,222 102
Elle S.r.l. 446 446 -
DeLonghi South Africa Pty Ltd. 374 374 -
De’Longhi Kenwood MEIA FZE 360 333 27
De’Longhi Japan Corp. 230 237 (7)
De’Longhi America Inc. 212 196 16
De’Longhi Appliances S.r.l. 166 5,238 (5,072)
De’Longhi Scandinavia A.B. 78 82 (4)
De’Longhi Canada Inc. 70 64 6
De’Longhi Polska Sp.Zo.o. 27 27 -
E-Services S.r.l. 11 11 -
DeLonghi Benelux S.A. 7 - 7
DL Chile S.A. 7 6 1
De’Longhi Brasil Ltda. - 4,155 (4,155)
Kenwood Limited Ltd. - 2,000 (2,000)
De’Longhi Ukraine LLC - 81 (81)
Dong Guan De’Longhi Kenwood Appliances Co. Ltd. - 8 (8)
Total De’Longhi Group companies and related parties 327,847 410,216 (82,369)
(1) This investment became a related party investment following the sale of 55% of NPE S.r.l.’s share capital by De’Longhi Applianc-
es S.r.l. to H&T Group.
The guarantees given in the interest of Group companies and related parties refer primarily to credit lines
which have been partially drawn down and to short-term loans.
In addition to the above:
• as part of its factoring of trade receivables without recourse, the total exposure for which amounted to
€185,181 at 31 December 2021 (€152,754 at 31 December 2020), the Company issued a surety and a
credit mandate in the interest of its subsidiaries and related parties involved;
• the Company also issued a guarantee in the interest of subsidiaries and related parties relative to curren-
cy hedging, the positive fair value of which amounted to €4,159 thousand at 31 December 2021 (negative
for €1,278 at 31 December 2020);
194De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
• the Company also issued third party guarantees
totalling €31 thousand.
No elements of risk as dened by IAS 37 have been
noted to date.
31. Classication of nancial assets and
liabilities
Financial assets and liabilities are classied below
in accordance with IFRS 7 using the categories
identied in IFRS 9.
(*) Interests in subsidiaries, associates and joint ventures are
not included (IFRS 9 - 2.1 a).
(**) Lease liabilities to which IFRS 16 Leases is applied (IFRS 9
- 2.1 b) are not included.
31.12.2021
Assets
Total value Amortized cost Fair value in Prot&Loss Fair value in OCI
Non-current assets
- Equity investments(*) -
- Receivables 112 112
- Other non-current nancial assets 316 316
Current assets
- Trade receivables 1,271 1,271
- Current tax assets 796 796
- Other receivables 16,102 16,102
- Current nancial receivables and assets 885,926 885,926
- Cash and cash equivalents 20,467 20,467
31.12.2021
Liabilities
Total value Amortized cost Fair value in Prot&Loss Fair value in OCI
Non-current liabilities
- Bank loans and borrowings (long-term portion) (357,457) (357,457)
- Other nancial payables (long-term portion)(**) (257,456) (257,456)
Current liabilities
- Trade payables (5,865) (5,865)
- Bank loans and borrowings (short-term
portion)
(220,609) (220,609)
- Other nancial payables (short-term portion)(**) (22,285) (21,845) (4) (261)
- Current tax liabilities - -
- Other payables (16,640) (16,640)
195De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
(*) Interests in subsidiaries, associates and joint ventures are
not included (IFRS 9 - 2.1 a).
(**) Lease liabilities under IFRS 16 (IFRS 9.-2.1b) and forward
contracts that will result in an acquisition to be considered
as a business combination within the scope of IFRS 3 Busi-
ness combination are not included (IFRS 9 - 2.1 f).
31.12.2020
Assets
Total value Amortized cost Fair value in Prot&Loss Fair value in OCI
Non-current assets
- Equity investments(*) -
- Receivables 119 119
- Other non-current nancial assets -
Current assets
- Trade receivables 3,418 3,418
- Current tax assets -
- Other receivables 11,587 11,587
- Current nancial receivables and assets 577,570 577,570
- Cash and cash equivalents 44 44
31.12.2020
Liabilities
Total value Amortized cost Fair value in Prot&Loss Fair value in OCI
Non-current liabilities
- Bank loans and borrowings (long-term portion) (330,012) (330,012)
- Other nancial payables (long-term portion)(**) (129,160) (128,549) (611)
Current liabilities
- Trade payables (4,345) (4,345)
- Bank loans and borrowings (short-term
portion)
(86,555) (86,555)
- Other nancial payables (short-term portion)(**) (22,552) (21,845) (2) (705)
- Current tax liabilities (122) (122)
- Other payables (12,647) (12,647)
196De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
32. Hierarchical levels of nancial instru-
ments measured at fair value
The following table presents the hierarchical levels
in which the fair value measurements of nancial
instruments have been classied at 31 December
2021. As required by IFRS 13, the hierarchy com-
prises the following levels:
• level 1: quoted prices in active markets for identi-
cal assets or liabilities;
• level 2: inputs other than quoted prices included
within Level 1 that are observable for the asset or
liability, either directly or indirectly;
• level 3: inputs for the asset or liability that are not
based on observable market data.
Financial instruments
measured at fair value
Level 1 Level 2 Level 3
Derivatives:
- derivatives with
positive fair value
51
There were no transfers between the levels during
the year.
33. Risk management
The Company is exposed to the following nancial
risks as part of its normal business activity:
• credit risk, mainly arising from the investment of
surplus cash;
• liquidity risk, arising from the need to have ade-
quate access to capital markets and sources of
nance to fund its operations, investment activi-
ties and the settlement of nancial liabilities;
• exchange rate risk, associated with the expo-
sure to currencies other than the Company’s
functional currency;
• interest rate risk, relating to the cost of the Com-
pany’s debt.
Credit risk
Credit risk consists of the company’s exposure to
potential losses arising from failure by a counter-
party to full its obligations.
Trade credit risk is associated with the normal
course of business and is monitored using formal
procedures to assess customers and extend them
credit, dene credit limits, as well as monitor ex-
pected inows, including with a view to credit
collection.
Positions are written down when there is objective
evidence that they will be partially or entirely uncol-
lected, bearing in mind that a signicant proportion
of receivables are covered by insurance policies
with major insurers.
This is not a material risk for the Company, whose
principal credit exposures are to Group companies.
As far as nancial credit risk is concerned, it is the
company’s policy to maintain a suciently large
portfolio of counterparties of high international
repute for the purposes of satisfying its nancing
and hedging needs.
Liquidity risk
Liquidity risk is the risk of not having the funds
needed to full payment obligations arising from
operating and investment activities and from the
maturity of nancial instruments.
The Company complies with specic group poli-
cies and procedures for the purposes of monitoring
and managing this risk, including:
• centralized management of nancial payables
and cash, supported by reporting and informa-
tion systems and, where possible, cash pooling
arrangements;
• raising of medium and long-term nance on
capital markets;
• diversication of the type of nancing instru-
ments used;
• obtaining of short-term credit lines such as to
ensure wide room for manoeuvre for the purpos-
es of managing working capital and cash ows;
• monitoring of current and forecast nancing
needs and distribution within the Group.
The Company has medium-term credit lines, linked
to current loans and described in this report, and
short-term credit lines (typically renewed on an
annual basis), for nancing working capital and
other operating needs (issue of guarantees, curren-
cy transactions etc.).
These credit lines, along with cash ow generated
by operations, are considered sucient to satisfy
the company’s annual funding requirements for
working capital, investments and settlement of
payables on their natural due dates.
Note 31. Classication of nancial assets and liabili-
ties presents the book value of nancial assets and
liabilities, in accordance with the categories identi-
ed by IFRS 9.
The following table summarizes the due dates of
nancial liabilities at 31 December 2021 and at 31
December 2020 on the basis of undiscounted con-
tractual payments.
With regard to lease liabilities in accordance with
IFRS 16, please refer to note 10. Leases.
Undiscounted
cash ows at
31.12.2021
Within one
year
One to ve
years
Beyond ve
year
Undiscounted
cash ows at
31.12.2020
Within one
year
One to ve
years
Beyond ve
year
Bank loans and borrowings (*) (579,378) (221,161) (358,217) - (420,211) (87,780) (332,431) -
Other nancial payables (**) (311,220) (25,763) (97,037) (188,420) (159,077) (24,142) (91,371) (43,564)
Trade payables (5,865) (5,865) - - (4,345) (4,345) - -
Current tax liabilities and other
payables
(16,640) (16,640) - - (12,769) (12,769) - -
Total (913,103) (269,429) (455,254) (188,420) (596,402) (129,036) (423,802) (43,564)
(*) The corresponding balance reported in the nancial statements is €578,066 thousand at 31 December 2021 and €416,567 thousand at 31 December 2020. See note 23. Bank loans and borrowings
(**) The corresponding balance reported in the nancial statements amounted to €279,476 thousand at 31 December 2021 (net of the fair value of derivatives of €264 thousand) and €150,394 thousand
at 31 December 2020 (net of the fair value of derivatives of €1,318 thousand and the variable consideration paid for the purchase of a minority interest of €647 thousand). For further details refer to
note 24. Other nancial payables.
197De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
Exchange rate risk
The Company is exposed to the risk of uctuations
in currencies (other than its functional one) in
which ordinary trade and nancial transactions are
denominated. For the purposes of protecting its
income statement and statement of nancial posi-
tion from such uctuations, the Company adopts a
suitable hedging policy that eschews speculative
ends.
Details of the policies, instruments and purpose of
hedging at Group level can be found in the notes to
the consolidated nancial statements.
Sensitivity analysis:
The potential impact, in terms of change in fair
value, of a hypothetical, sudden +/-5% change in
year-end exchange rates was estimated in light
solely of receivables/payables in unhedged curren-
cies insofar as the impact on the income statement
of the receivables/payables in hedged currencies is
mitigated or offset by the respective hedges. A
+/-5% change in year-end exchange rates of the
principal exposed currencies (USD, HKD and GBP)
is estimated to produce a change in fair value of
around +/- €6 thousand (+/- €4 thousand at 31 De-
cember 2020). As most of the receivables/paya-
bles in question are due beyond twelve months the
change in fair value would impact the income
statement of the following year.
The hedging transactions at 31 December 2021 are
described in the paragraph “Interest rate and cur-
rency exchange hedges at 31 December 2021”.
Interest rate risk
The Company is exposed to interest rate risk on
oating rate loans and borrowings. This risk is
managed centrally by the same team that manag-
es currency risks.
The purpose of interest rate risk management is to
x in advance the maximum cost (in terms of the
interbank rate, which represents the benchmark for
these borrowings) for a part of the debt.
At 31 December 2021 there were three Interest
Rate Swaps (IRS) hedging interest rate risk in loans
taken out by the Company.
Sensitivity analysis:
When estimating the potential impact of a hypo-
thetical, sudden material change in interest rates
(+/- 1% in market rates) on the cost of the Compa-
ny’s debt, only those items forming part of net -
nancial position which earn/incur interest have
been considered and not any others (meaning total
net assets of €540.6 million on a total of €48.0 mil-
lion in net debt at 31 December 2021 and total net
assets of €434.2 million on a total of €7.6 million in
net debt in 2020). In the absence of hedges, any
change in interest rates would directly impact the
cost of that portion of debt resulting in an increase/
decrease in nancial expenses.
A +/-1% change in interest rates would have an
impact of +/- €5.4 million before tax at 31 December
2021 recognized entirely in the income statement
(+/- €4.3 million before tax at 31 December 2020).
The existing interest rate swaps used to hedge in-
terest rate risk made it possible to exchange oat-
ing rate debt for xed rate debt. Any change, there-
fore, in interest rates would not impact the income
statement. In light, however, of the fact that the
hedges are measured at fair value and that the por-
tion relating to future interest ows is recognized at
net equity, at 31 December 2021 a change of +/- 1%
in rates would cause a change in the cash ow
hedge of +/- €1.4 million before tax (+/- € 1.4 mil-
lion before tax at 31 December 2020).
Please refer to the paragraph “Interest rate and cur-
rency exchange hedges at 31 December 2021” for
more information.
Interest rate and currency exchange hedges at 31
December 2021
The Company had a number of derivatives at 31
December 2021, hedging both the fair value of un-
derlying instruments and exposure to changes in
cash ow.
For accounting purposes, derivatives that hedge
changes in cash ow are treated in accordance
with hedge accounting as called for in IFRS 9.
Derivatives that hedge foreign currency payables
and receivables are reported as nancial assets
and liabilities held for trading with changes in their
fair value reported in the income statement. These
instruments offset the risk on the hedged item
(which is a recognized asset or liability).
The fair value of the outstanding derivatives at 31
December 2021 is provided below:
31.12.2021
Fair value
FX forward agreements (4)
Derivatives hedging foreign currency receivables/
payables
(4)
Derivatives hedging interest rate risk (IRS) 55
Derivatives covering expected cash ows 55
Total fair value of the derivatives 51
198De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
Hedges against foreign currency receivables and payables:
Currency
Notional amount (in thousands)
Fair value with Group
(in €/000)
Group Third parties
Asset Liability
Purchases Sales Total Purchases Sales Total
HKD/EUR (13,750) 13,750 - - - - - (4)
Total Fair Value - (4)
IRS (Interest Rate Swap) hedging interest rate risk on loans:
The fair value of the derivatives is calculated using the discounted cash ow method based on the swap
curve, not including the spread; at 31 December 2020 the fair value of the derivatives, which also takes into
account counterparty risk in accordance with IFRS 13 - Fair Value measurement, was positive for €55 thou-
sand and is recognized, for €316 thousand, under nancial receivables and, for €261 thousand, under
amounts payable to other lenders. As the hedge on future interest ows qualies as an effective hedge, at
31 December 2021 a positive cash ow hedge reserve of €123 thousand was reported in net equity, net of
the related tax effect of €30 thousand.
Details are as follows (the gures are shown before tax):
31.12.2021
Fair value (in €/000)
Interest Rate Swap (IRS) connected to the loan with notional amount equal
to € 78,000 thousand
174
Interest Rate Swap (IRS) connected to the loan with notional amount equal
to € 75,000 thousand
(89)
Interest Rate Swap (IRS) connected to the loan with notional amount equal
to € 9,500 thousand
(30)
Total fair value of the derivates 55
of which:
positive medium/long-term fair value 316
negative short-term fair value (261)
34. Transactions and balances with related parties
Appendix 4 contains the information concerning transactions and balances with group companies and re-
lated parties required by CONSOB Regulations 97001574 dated 20 February 1997, 98015375 dated 27 Feb-
ruary 1998 and DEM/2064231 dated 30 September 2002; all such transactions have fallen within the
Group’s normal operations, except as otherwise stated in these notes, and have been settled under arm’s-
length terms and conditions.
35. Subsequent events
After 31 December 2021 through the date on which this annual report was approved, no events occurred
that would have had a signicant impact on the nancial and economic results recorded, as per IAS 10 -
Events after the reporting period.
With regard to the international scenario, in the rst few months of 2022 the European geopolitical situation
gradually took a turn for the worse. The rapid escalation of the tensions between Russia and Ukraine has
given rise to concerns, rst of all, about the safety of everyone, all the employees and their families and,
secondly, the economic situation in these markets.
The Company is carrying out a series of assessments in order to estimate the possible economic and nan-
cial impact of a scenario that today is entirely uncertain.
Other than the above, no other signicant events occurred after the close of the year.
199De’ Longhi Group
Separate annual report and nancial statements -
Explanatory notes
36. Proposed resolutions for the annual
general meeting
1) Proposed resolution relating to item 1.1 of the
Agenda for the Annual General Meeting convened
on 20 April 2022 (“Annual Report at 31 December
2021: presentation of the nancial statements at
31 December 2021, together with the Directors’
Report on Operations, the Board of Statutory Audi-
tors’ Report, the External Auditors’ Report and the
Certication of the Financial Reporting Ocer.
Related and consequent resolutions”).
Dear Shareholders,
in submitting the De’Longhi S.p.A.’s Annual Report
at 31 December 2021 to you for approval during the
Annual General Meeting, we propose that you ap-
prove the following resolution:
“The Shareholders of De’ Longhi S.p.A., having ex-
amined the draft nancial statements at 31 Decem-
ber 2021 of De’Longhi S.p.A., the Board of Directors’
Report on Operations, the Board of Statutory Audi-
tors’ Report, the External Auditors’ Report and the
other documentation called for under the law
resolve
to approve the Board of Directors’ Report on Opera-
tions and the nancial statements at 31 December
2021 of De’Longhi S.p.A.”.
2) Proposed resolution relating to item 1.2 of the
Agenda for the Annual General Meeting convened
on 20 April 2022 (“Annual Report at 31 December
2021: proposed allocation of the net prot for the
year and distribution of the dividend. Related and
consequent resolutions”).
Dear Shareholders,
with regard to the allocation of the net prot for the
year closed on 31 December 2021, which amount-
ed to €107,098,783, we propose that you approve
the following resolution:
“The Shareholders of De’Longhi S.p.A., having ac-
knowledged the net prot for the year shown in the
Annual Report at 31 December 2021 and the Direc-
tors’ Report on Operations
resolve
1. to allocate €101,259 of the net prot for the year
to the legal reserve, in accordance with art. 2430
of the Italian Civil Code, which represents one
fth of the share capital subscribed at the date of
this Annual General Meeting;
2. to distribute a gross ordinary dividend of €0.83
for each of the shares outstanding with dividend
rights at the record date, as per art. 83-terdecies
of Legislative Decree 58/98, using the net prot
for 2021 after the allocation referred to in item 1
above has been made and the extraordinary
reserve;
3. to establish that the payment of the dividend, on
each share entitled to receive a dividend, will take
place on 25 May 2022, with shares going ex-div
on 23 May 2022, in accordance with Borsa Italia-
na’s calendar, based on the record date set in ac-
cordance with art. 83-terdecies of Legislative
Decree n. 58/98 of 24 May 2022”.
Treviso, 10 March 2022
De’Longhi S.p.A.
The Chief Executive Ocer
Massimo Garavaglia
Appendices
Separate
annual
report and
nancial
statements
201De’ Longhi Group
Separate annual report and nancial statements -
Appendices
A
Appendices
ese appendices contain additional information to that reported in the explanatory notes, of
which they form an integral part.
This information is contained in the following appendices:
1. Certication of the nancial statements pursuant to art. 81-ter of CONSOB Regulation 11971 dated 14
May 1999 and subsequent amendments and additions.
2. Statement of cash ows in terms of net nancial position.
3. List of subsidiary companies and changes in equity investments.
4. Transactions and balances with related parties:
a. Income statement and statement of nancial position
b. Summary by company
202De’ Longhi Group
Separate annual report and nancial statements -
Appendices
Certication of the nancial statements pursuant to
art. 81-ter of CONSOB Regulation 11971 dated 14 May
1999 and subsequent amendments and additions
(Appendix 1 to the Explanatory Notes)
The undersigned Massimo Garavaglia, Chief Exec-
utive Ocer, and Stefano Biella, as Ocer Respon-
sible for Preparing the Company’s Financial Report
of De’Longhi S.p.A., attest, also taking account of
the provisions of paragraphs 2, 3 and 4, art. 154-bis
of Decree 58 dated 24 February 1998:
that the accounting and administrative processes
for preparing the nancial statements during 2021:
• have been adequate in relation to the company’s
characteristics and
• have been effectively applied.
It is also certied that the nancial statements at
31 December 2021:
• have been prepared in accordance with the Inter-
national Financial Reporting Standards adopted
by the European Union under Regulation (EC)
1606/2002 of the European Parliament and
Council dated 19 July 2002 and with the meas-
ures implementing art. 9 of Decree 38/2005;
• correspond to the underlying accounting records
and books of account;
• are able to provide a true and fair view of the is-
suer’s statement of nancial position and results
of operations.
The report on operations contains a reliable ac-
count of performance and of the results of opera-
tions and of the situation of the issuer, together
with a description of the principal risks and uncer-
tainties to which they are exposed.
Massimo Garavaglia
Chief Executive Ocer
Stefano Biella
Ocer Responsible for Preparing the Company’s
Financial Report
203De’ Longhi Group
Separate annual report and nancial statements -
Appendices
Statement of cash ows in
terms of net nancial position
(Appendix 2 to the Explanatory Notes)
(Amounts in thousands of Euro) 2021 2020
Net prot (loss) 107,099 88,710
Income taxes for the period (5,732) (4,656)
Income for dividends receipt (133,327) (110,949)
Amortization 561 777
Net change in provisions and other non-cash items 3,065 5,840
Cash ow absorbed by current operations (A) (28,334) (20,278)
Change in assets and liabilities for the period:
Trade receivables 2,147 (429)
Trade payables 1,520 (2,009)
Other changes in net working capital 5,378 3,410
Payment of income taxes (918) (320)
Cash ow generated by changes in working capital (B) 8,127 652
Cash ow absorbed by current operations and changes in working capital (A+B) (20,207) (19,626)
Investment activities:
Investments in intangible assets (124) (10)
Investments in tangible assets (136) (65)
Investments in leased assets (104) (202)
Other cash ow from tangible assets 16 -
Dividends receipt 133,327 110,949
Cash ow generated by investment activities (C) 132,979 110,672
Cash ow by operating activities (A+B+C) 112,772 91,046
Purchase of treasury shares - (14,534)
Exercise of stock option 7,110 21,452
Dividends paid (80,822) (80,813)
Cash ow hedge reserve 1,340 (1,379)
Cash ow absorbed by changes in net equity (E) (72,372) (75,274)
Cash ow for the period (A+B+C+D+E) 40,400 15,772
Opening positive net nancial position (net nancial debt) 7,573 (8,199)
Cash ow for the period (A+B+C+D+E) 40,400 15,772
Closing positive net nancial position 47,973 7,573
204De’ Longhi Group
Separate annual report and nancial statements -
Appendices
List of equity investments in subsidiary
companies (art. 2427 of the Italian Civil Code)
(Appendix 3 to the Explanatory Notes) (*)
Company name Registered oce
Share capital Net equity
Latest reported
prot or (loss)
Interest held
(directly)
Book value
Subsidiary companies thousands
DeLonghi Benelux S.A.
(1)
Luxembourg Eur 181,730,990 Eur 293,608,096 Eur 46,792,213 100% 266,737
De’Longhi Appliances S.r.l. Treviso Eur 200,000,000 Eur 403,918,593 Eur 137,065,242 100% 242,678
De’Longhi Deutschland GmbH
(2)
Neu Isenburg Eur 2,100,000 Eur 41,056,505 Eur 9,384,673 100% 40,800
De’Longhi Capital Services S.r.l.
(3) (4)
Treviso Eur 53,000,000 Eur 60,988,646 Eur 5,288,677 11,32% 6,005
E-Services S.r.l. Treviso Eur 50,000 Eur 1,843,002 Eur 1,518,751 100% 5,264
De’Longhi Romania S.r.l.
(2) (4)
Cluj-Napoca Ron 140,000,000 Ron 532,509,204 Ron 78,122,700 10% 3,078
De’Longhi Kenwood GmbH
(2)
Wr. Neudorf Eur 36,336 Eur 4,226,507 Eur 1,429,732 100% 2,900
Clim.Re S.A.
(4) (5)
Luxembourg Eur 1,239,468 Eur 1,668,625 Eur - 4% 54
De’Longhi Polska Sp.Zoo
(2) (4)
Warszawa Pln 50,000 Pln 74,105,446 Pln 15,314,325 0,1% -
Total 567,516
(*) Statutory gures at 31 December 2021, unless otherwise specied.
(1) Statutory gures at 31 December 2019.
(2) Figures used for the purposes of consolidation at 31 December 2021.
(3) The articles of association, approved by the extraordinary shareholders’ meeting held on 29 December 2004, give special rights to De’Longhi S.p.A. (holding 89% of the voting rights) for ordinary resolutions (approval of nancial statements, declaration of dividends,
nomination of directors and statutory auditors, purchase and sale of companies, grant of loans to third parties); voting rights are proportional as far as other resolutions are concerned.
(4) The residual interest is held indirectly.
(5) Statutory gures at 31 December 2020.
205De’ Longhi Group
Separate annual report and nancial statements -
Appendices
Changes in equity investments
(Appendix 3 to the Explanatory Notes - cont’d)
Equity investments
(Amounts in thousands of Euro)
Book value at
31.12.2020
Acquisitions,
subscriptions and
recapitalizations
Demerger
Net impairment
losses and
reversals
Book value at
31.12.2021
Subsidiaries
DeLonghi Benelux S.A. 266,737 - - - 266,737
De’Longhi Appliances S.r.l. 242,678 - - - 242,678
De’Longhi Deutschland GmbH 40,800 - - - 40,800
De’Longhi Capital Services S.r.l. 6,005 - - - 6,005
E-Services S.r.l. 5,264 - - - 5,264
De’Longhi Romania S.r.l. 3,078 - - - 3,078
De’Longhi Kenwood GmbH 2,900 - - 2,900
Clim.Re S.A. 54 - - - 54
De’Longhi Polka Sp.Zo.o. - - - - -
Total equity investments 567,516 - - - 567,516
206De’ Longhi Group
Separate annual report and nancial statements -
Appendices
Transactions and balances with related parties
(Appendix 4 to the Explanatory Notes)
Income statement pursuant to CONSOB resolution 15519 of 27
July 2006
(Amounts in thousands of Euro)
Notes 2021
of which related
parties
2020
of which related
parties
Revenues 1 14,547 14,443 8,847 8,723
Total revenues 14,547 8,847
Raw and ancillary materials, consumables and goods 2 (51) (52)
Materials consumed (51) (52)
Payroll costs 3 (19,656) (14,483)
Services and other operating expenses 4 (20,974) (2,034) (16,195) (2,030)
Amortization 5 (561) (777)
EBIT (26,695) (22,660)
Net nancial income (expenses) 6 128,062 134,089 106,714 111,091
Prot (loss) before taxes 101,367 84,054
Income taxes 7 5,732 4,656
Net prot (loss) 107,099 88,710
207De’ Longhi Group
Separate annual report and nancial statements -
Appendices
Transactions and balances with related parties
(Appendix 4 to the Explanatory Notes - cont’d)
Statement of nancial position pursuant to CONSOB resolution
15519 of 27 July 2006
Assets
(Amounts in thousands of Euro)
Notes 31.12.2021
of which related
parties
31.12.2020
of which related
parties
Non-current assets
Intangible assets 102 210
- Other intangible assets 8 102 210
Tangible assets 1,196 1,285
- Other tangible assets 9 162 60
- Right of use assets 10 1,034 1,225
Equity investments and other nancial assets 567,944 567,635
- Equity investments 11 567,516 567,516
- Receivables 12 112 109 119 116
- Other non-current nancial assets 13 316 -
Total non-current assets 569,242 569,130
Current assets
Trade receivables 14 1,271 1,269 3,418 1,847
Current tax assets 15 796 -
Other receivables 16 16,102 10,518 11,587 4,583
Current nancial receivables and assets 17 885,926 885,918 577,570 577,570
Cash and cash equivalents 18 20,467 44
Total current assets 924,562 592,619
Total assets 1,493,804 1,161,749
208De’ Longhi Group
Separate annual report and nancial statements -
Appendices
Statement of nancial position pursuant to CONSOB resolution
15519 of 27 July 2006
Net equity and liabilities
(Amounts in thousands of Euro)
Notes 31.12.2021
of which related
parties
31.12.2020
of which related
parties
Net equity
Net equity 605,379 567,416
- Share capital 21 226,344 225,823
- Reserves 22 271,936 252,883
- Net prot (loss) 107,099 88,710
Total net equity 605,379 567,416
Non-current liabilities
Financial payables 615,674 460,127
- Bank loans and borrowings (long-term portion) 23 357,457 330,012
- Other nancial payables (long-term portion) 24 257,456 129,161
- Lease liabilities (long-term portion) 10 761 634 954 802
Deferred tax liabilities 25 1,196 713
Non-current provisions for contingencies and other charges 5,879 6,348
- Employee benets 26 5,879 6,348
Total non-current liabilities 622,749 467,188
Current liabilities
Trade payables 27 5,865 34 4,345
Financial payables 243,171 110,031
- Bank loans and borrowings (short-term portion) 23 220,609 86,555
- Other nancial payables (short-term portion) 24 22,285 137 23,199 81
- Lease liabilities (short-term portion) 10 277 176 277 172
Current tax liabilities 28 - 122
Other payables 29 16,640 5,750 12,647 5,396
Total current liabilities 265,676 127,145
Total net equity and liabilities 1,493,804 1,161,749
209De’ Longhi Group
Separate annual report and nancial statements -
Appendices
Transactions and balances with related parties
Summary by company
(Appendix 4 to the Explanatory Notes - cont’d)
Amounts in €/million Revenues
(1)
Materials
consumed and
costs for
services
(1)
Financial
income
(expenses)
Non-current
nancial
receivables
Current nancial
receivables
Other
receivables
(2)
Non-current
nancial
payables
Current nancial
payables
(3)
Other payables
Ultimate parent companies:
DE LONGHI INDUSTRIAL S.A. - - - - - 10.3 - - -
Total ultimate parent companies (a) 0.0 0.0 0.0 0.0 0.0 10.3 0.0 0.0 0.0
Subsidiary companies:
DE' LONGHI APPLIANCES S.R.L. 6.0 (0.1) 74.2 - - 0.8 (0.6) (0.2) (5.6)
DE'LONGHI US HOLDING LLC 3.9 - - - - 0.2 - - -
E-SERVICES S.R.L. 2.5 (0.5) 1.5 - - 0.3 - - (0.2)
DE'LONGHI KENWOOD A.P.A. LTD 1.5 - 0.1 0.1 - - - - -
DE'LONGHI HOUSEHOLD GMBH 0.1 - - - - 0.1 - - -
DE'LONGHI S.R.L. - ROMANIA 0.1 - - - - - - - -
KENWOOD LIMITED 0.1 (0.2) - - - - - - -
DE'LONGHI AMERICA INC. - (1.2) - - - - - - -
DE LONGHI BENELUX S.A. - - 55.0 - - - - - -
DE'LONGHI-KENWOOD GMBH - AUSTRIA - - 2.6 - - - - - -
DE' LONGHI CAPITAL SERVICES S.R.L. - - 0.7 - 885.9 - - (0.1) -
Total subsidiary companies (b) 14.2 (2.0) 134.1 0.1 885.9 1.4 (0.6) (0.3) (5.8)
Related companies:
GAMMA S.R.L. 0.1 - - - - - - - -
DL RADIATORS S.R.L. 0.1 - - - - 0.1 - - -
Total related companies (c) 0.2 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0
Total ultimate parent, subsidiary and related
companies (a+b+c)
14.4 (2.0) 134.1 0.1 885.9 11.8 (0.6) (0.3) (5.8)
(1) These mostly refer to dealings of a commercial nature and the supply of administrative services by company employees.
(2) These consist of €1.3 million in “Trade receivables” and €10.5 million in “Other receivables”.
(3) This item includes €0.1 million in “Other nancial payables” and €0.2 million in “Lease payables”.
Please refer to the yearly “Report on Remuneration” for information relating to the compensation of directors and statutory auditors.
External auditors’
report on the
separated nancial
statements
Separate
annual
report and
nancial
statements
Separate annual report and nancial statements -
External auditors’ report
211De’ Longhi Group
212De’ Longhi Group Separate annual report and nancial statements -
External auditors’ report
213De’ Longhi Group Separate annual report and nancial statements -
External auditors’ report
214De’ Longhi Group Separate annual report and nancial statements -
External auditors’ report
