EL.En. (ELN) Investor Update summary

Transaction overview

• Finalized sale of 59% (59.18%) of Penta Laser Zhejiang to YOFC for CNY 240 million (approx. EUR 30.5 million), valuing the company at CNY 405 million (approx. EUR 51.5 million), based on 2024 draft results.

• Ot-las retains a 19% (19.2%) stake, with a lock-up until 2027; YOFC will manage Penta Laser Zhejiang.

• The deal excludes Cutlite Penta and its Brazilian subsidiary due to customer and governance concerns, especially in the US, about foreign control.

• Sale proceeds will strengthen the group’s net financial position and primarily repay financing from El.En. to Ot-las.

• The agreement is subject to Italian Golden Power approval, regulatory approval, and includes customary co-sale, right of first refusal, and price adjustment clauses.

Deal structure and indemnities

• A 5% price reduction applies if Penta Laser Zhejiang misses certain financial targets in 2025 or 2027.

• Seller liability capped at 10% of received price for most due diligence findings, except for two cases with unlimited indemnity: the Baoyuan legal dispute and potential impairment of the KBF subsidiary.

• Ot-las can sell its remaining stake to YOFC in 2027 at 1.05x net asset value.

• Some US customers canceled orders in Q4 2024 due to concerns over Chinese control, but orders resumed after confirming Italian ownership.

• The divested activities will be excluded from El.En.'s consolidation perimeter after closing, expected within 90 days.

Financial impact and use of proceeds

• PLZ generated €81.8 million revenue and -€7.1 million EBIT in 2024, with a positive net financial position of €9.8 million.

• The sale is expected to generate a consolidated gross capital gain of about €6 million, subject to final adjustments.

• Sale proceeds will primarily repay financing from El.En. to Ot-las, strengthening the group’s net financial position.