11 - florim · 8 2018 sustainability report giovanni lucchese pioneers the production of extruded...

2018Sustainability

Report

EDITION11

th

By Florim Ceramiche S.p.A.Financial Department - supervisionCommunications Department - editorial coordinationOur thanks to all contributing staff members.

Fiorano Modenese (Modena, Italy), May 2019

Cover - “Il Cavallo” by Mimmo Paladino

Contents

Letter to stakeholders

Our Sustainability Report

MADE IN FLORIM

Our history

Our locations

Our brands

Our design service

Design is our passion

GOVERNANCE

Code of Ethics

Management System Policy

Corporate bodies

Corporate structure

Stakeholders

Materiality analysis

Risk management

REPORTING

In brief

Our approach to sustainability

Economic Responsibility

Comments on the economic data

Economic Value Generated and

Distributed

Environmental Responsibility

Our “green” projects in figures

Certifications

Environmental management

Energy management

5

6

8

9

9

9

10

12

12

13

14

15

16

18

20

21

22

22

22

25

26

27

28

30

34

34

37

41

45

46

47

48

49

49

50

51

53

54

55

Social Responsibility

Employees & corporate welfare

Corporate welfare projects

Local community & culture

THE PRODUCT

The “Made in Florim” product

Multiple design awards

Product responsibility

Customer focus

Management system

AEO Certification

The supply chain

Survey of suppliers' sustainability level

OUR COMMITMENTS

The promises we kept

The targets we set ourselves

COMMUNICATION

The 2018 figures

GRI CONTENT INDEX

2018 Sustainability Report4

CEDIT - Ceramiche d'Italia | Araldica Collection

2018 Sustainability Report 5

I would like to extend to you all my usual welcome to the Florim Sustainability Report, expanded this year to include new information in compliance with the GRI Standard guidelines, and make our business even more transparent.

2018 was a difficult year due to the unpredictability of the American market and the many and varied problems affecting the industry and the country where we mainly operate

However, the Florim Group rose to the challenge with its usual calm and clear-sighted pursuit of its objectives: first and foremost to produce materials constantly at the aesthetic and technological state of the art, to create positive effects for its surrounding area, to safeguard the environment, to support the local community and to promote its image beyond Italy's borders.

It is worth pointing out that the lion's share of technical investments were dedicated to completing the two large slab production and transformation factories, which are now two shining examples of leading-edge industry 4.0 technology and a source of pride for me and the entire workforce.

There was once again a rich program of events at the Gallery and in the flagship stores, ideal places for bringing together not only industry professionals but also people from different worlds and cultures, for occasions where the value of human relations was the overriding theme.

Although fully aware of the persistent problems facing ceramic covering producers, I am confident that the Florim Group will continue to play a key role, drawing strength from the quality of its employees, to whom I extend my sincere thanks, while urging them to continue to be inspired by our keywords:beauty - simplicity - humility.

Thank you for your attention; I hope you will enjoy reading the report

Claudio Lucchese

Letter to stakeholders


Our Sustainability Report

Methodological framework and reporting perimeter

Writing and distributing its Sustainability Report enables Florim to communicate with its stakeholders with transparency, describe the results achieved and set out future goals, in an approach based on engagement and continual improvement. It is in this spirit that we have always sought, year-on-year, to improve this document and ensure that it is concise and easy to read. This year, we have adopted the GRI Standards, published by the Global Reporting Initiative, as the guidelines for the structuring of our report. In line with the requirements of the GRI, Florim has taken the first step in a process of improvement which will involve the analysis of the various parts of the supply chain over the next few years. As the first phase of this analysis, a survey of its suppliers' level of sustainability was launched. Although there have been some changes to the guidelines, for reasons of continuity and clarity a subdivision into chapters similar to that used in previous years has been maintained. Two products have been prepared: a full version containing the data required by the GRI Standards, available online at www.florim.com/en/sustainability, and a short-form version available both online and on paper.The method adopted by Florim for the preparation of this document involved a team including the top management, led by the communication function assisted by an external agency of consultants. During the course of the project, a large number of company departments also made an active contribution within their areas of competence.This sustainability report was written in accordance with the principles of clarity, timeliness, accuracy, balance, comparability and reliability recommended by the GRI.• Clarity: by making information available in a manner that is understandable and accessible to all stakeholders• Timeliness: by presenting the sustainability report at the beginning of May, coinciding with the publication of the consolidated financial statements• Accuracy: by reporting the indicators required by the GRI Standards in the greatest possible detail• Balance: by highlighting both the organization's positive aspects and its negative areas where there is room for improvement• Comparability: by providing as many data as possible over a three-year period• Reliability: by involving all company departments in the collection of the data and submitting them for thorough checking by the BoD.

Page 15 provides the list of Florim's main stakeholders and the relative topics.

What's more, the Florim Sustainability Report is one of those chosen by Italian consumers for its clarity and effectiveness; starting with a list of 537 documents, readers selected just 40 as good examples of how they would like information to be presented to enable them to assess whether a producer deserves their business.Amongst these, the Florim Sustainability Report was considered to accurately describe a management approach which respects the future since it gives due importance to the common good, general interest and social cohesion.The survey was conducted on the initiative of the Consumerlab research center in association with Codacons.

Sustainable development goals

In September 2015, more than 150 international leaders met at the United Nations to contribute to global development, promote human well-being and protect the environment. The community of States approved the 2030 Agenda for sustainable development, the key constituents of which are the 17 Sustainable Development Goals (SDGs), which aim to end poverty, fight inequality and achieve social and economic development, as well as tackling climate change and building peaceful societies, by the year 2030. Achieving improvements for the attainment of the goals within a few years will be a major challenge, but we are all called upon to feel responsible for the planet and the living beings which inhabit it. In its approach to business the Florim Group has been committed to pursuing some of the SDGs for years now. They are listed below, and you will find them specifically discussed in the sections dealing with products and reporting.

http://www.florim.com/en/sustainability


Rex | Étoile de Rex Collection


Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is founded in the heart of the Sassuolo production district

Floor Gres is the first Italian manufacturer to produce single-fired white body tiles

The Swimming Pool Division is established within Floor Gres

Floor Gres is one of the first companies in the world to start the manufacture of porcelain stoneware tiles

Claudio Lucchese, son of the founder, takes over the reins at Floor Gres after his father's untimely death

Floor Gres acquires Cerim Ceramiche

Floor Gres and Cerim merge to create Florim

Florim acquires Rex Ceramiche Artistiche

The Project Division, forerunner of today's Florim Solutions, is created

Incorporation of Florim USA, a production and distribution company destined to become a leader on the North American market

Florim acquires Casa dolce casa and Casamood

The first Florim Flagship store opens in the Brera district, in the heart of Milan

The Florim Gallery multi-functional center and Florim Logistics are built in FioranoThe Fondazione Ing. Giovanni Lucchese foundation is established

A Flagship Store opens in Moscow and the Health&Training Center is inaugurated in FioranoThe production of large slabs (up to 320x160 cm) begins

A Flagship Store opens in the center of New York

Florim relaunches CEDIT – Ceramiche d'Italia and opens the brand's first “Spazio” in MilanFLORIM stone, the Group's first worktop and countertop brand, is born

Production of large slabs begins at the new Industry 4.0 factory at Mordano Casa dolce casa and Casamood merge in a single brand

A new Industry 4.0 factory takes shape at Fiorano to process and handle the Group's large size coverings.

MADE IN FLORIM

Over 50 years of history | Over 1,400 employees | More than 400 million Euro of turnover

950 tons of CO2 not emitted in 2018 thanks to the photovoltaic system

It takes more than figures to define a company. Passion, innovation, a constant commitment to improvement and corporate social responsibility are the long-established guidelines of a new way of doing business: the MADE IN FLORIM way.

Our history 1962

1967

1976

1981

1984

1990

1992

1994

1995

2000

2005

2009

2013

2014

2015

2016

2017

2018

Watch the institutional

video

https://www.youtube.com/watch?v=KszGqMj8aq0


Our locations The map shows the headquarters, showrooms, production plants and logistic hubs. Florim Group products are sold in Italy (20%) and abroad (80%) by top retailers and international importers.

FLORIM USASite,

production plant and logistics hub

Clarksville, TN (USA)

Flagship StoreNew York, NY (USA)

Flagship Store, Spazio CEDIT and

Area MalpensaMilan (ITALY)

Flagship StoreMoscow (RUSSIA)

HeadquartersFiorano Modenese, Modena (ITALY)Production plantMordano, Bologna (ITALY)

OfficeSingapore (SINGAPORE)

The brand which serves architectural projects with materials that combine outstanding performances and aesthetic appeal

Through genuine designer slabs, this brand renews the idea of architectural space to express the style and art of Italian interior design

It presents a range with a contemporary look to suit the tastes of a wide market band

Inspired by an innate passion for beauty and design, Florim produces ceramic surfaces to meet all the needs of the construction, architecture and interior design sectors. It offers them to the market through its 7 commercial brands, all sharing the corporate payoff: “Design is our passion”.

Its mission is luxury, with surfaces inspired by the most exquisite natural materials with strong decorative content

It is the brand for interior designers constantly seeking refined elegance and creative harmony

The brand that brings together technical performances, convenience and good looks for the perfect customized worktops

The Made in USA brand that aims to satisfy the taste of the North American market with a typically Italian style

Our brands

More information on page 48.

Our design serviceAs well as the product itself, Florim offers technical support throughout the various design phases. From the feasibility study to the final installation, Florim Solutions works side by side with the architect, providing expertise and experience when the style and performance of porcelain tiles become fundamental to the project.

https://www.florim.com/en/floorgres/collections/

https://www.florim.com/en/casadolcecasa-casamood/collections/

https://www.florim.com/en/cerim/collections/

https://www.florim.com/en/florimstone/collections/

https://www.florim.com/en/cedit/collections/

https://www.milestonetiles.com/

https://www.florim.com/en/solutions/

https://www.florim.com/en/rex/collections/


Design is our passion

You can learn a great deal about a company by analyzing the product it creates, how it produces it and its workplaces. Florim's DNA contains a natural talent for art and beauty, which it integrates in a corporate sustainability project. All this is summarized in the Group's advertising payoff: Design is our passion.

The product

Historically relegated to a minor role as a functional floor and wall covering product, ceramics are increasingly becoming a key decorative and interior design feature. For Florim, giving form to “beauty” involves the meticulous development and production of products intended to improve the way people relate to their spaces. Florim implements this principle to evolve more and more innovative products, with a vision reaching beyond the confines of its industry and across all geographical barriers. In an inspirational dialogue between creativity and technology, the traditional 20x20 cm tile has now been transformed into a slab more than 3 meters long which can - if necessary - become a door, a table or a kitchen worktop - as well as its standard roles as floor or wall covering.This is how the company sees the future: dominated by creativity, which draws on state of the art technologies to shape new beauty. More information on page 45.

Non-production activities

A company's task does not end with its industrial and commercial operations; the organization must reach beyond the dictates of business alone to embrace overall corporate sustainability and ethics. In this area, the Group's activities extend in many directions: from minimizing environmental impact to supporting the Peggy Guggenheim collection in Venice, with its artistic legacy of extraordinary beauty.

Workplaces

Key amongst the company's latest investments are two large plants at Fiorano (Modena) and Mordano (Bologna). Two facilities similar in appearance, which have the same concentration of the very latest technologies and both hold Industry 4.0 certification. They were designed with a strong focus on workplace quality, to create locations which would be attractive to look at and above all to work in. This philosophy led the company, in 2018, to install two sculptures by well known contemporary artists at its headquarters at Fiorano Modenese: “Il Cavallo” by Mimmo Paladino in the main entrance and “Percorso Amoroso” by Giuseppe Gallo on the west side of the new Industry 4.0 factory.

Il Cavallo | Mimmo Paladino Percorso Amoroso | Giuseppe Gallo


GOVERNANCE

Code of EthicsThe Group's governance plays a central role in the responsible development of its business, ensuring ethical, transparent management of its operations with its stakeholders' interests always in mind.

After approving the Governance Model which is compliant with the provisions of Italian Legislative Decree 231/2001, the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016), which has become an integral part of Florim's operations and is accepted by every new employee, supplier and business partner.To guarantee the application of and compliance with its contents, a Supervisory Board is in operation to detect any breaches of its provisions. All stakeholders can also contact the Supervisory Board, ([email protected]) for further explanations regarding the interpretation and application of the corporate Code of Ethics, as described on the corporate website.The following is an extract from the rules of conduct which govern the way we do business:

Download the Code of Ethics

Our mission

To manufacture ceramic tiles and materials for multiple uses and offer the most appropriate solutions for both interior design and architecture. To constantly prioritize environmental sustainability, attempting to satisfy the needs of customers and to create value for shareholders, employees and the local community, in compliance with the ethical principles and rules of conduct set out in the Code of Ethics.

Our vision

To be at the cutting edge of technical and design innovation in ceramics, by developing materials and production methods that position us as a constant benchmark for customers, architects and competitors.

Our values

Honesty and Respect: all internal and external relationships must be based on honesty and respect for rules and dignity of the individual.

Corporate Social Responsibility: corporate social responsibility must be promoted through measures and practices adopted to support the local environment and community.

Individual Responsibility: everyone must be aware of the worth and consequences of their own actions.

Quality and Innovation: excellence must be pursued by improving products, processes and skills to promote corporate success.

Transparency: intentions and positions must be expressed openly and clearly, without misunderstandings or misrepresentation, to build lasting relationships based on trust both inside and outside the company.

Courage: a moral strength which enables us to undertake and deal with changes, difficulties and challenges to benefit from all the opportunities they offer.

Feeling of Belonging: feeling proud to be a part of one big team, made up of the company, associates, customers and suppliers.

Management System Policy

To achieve greater and greater transparency in its reporting, the company has drawn up guidelines for its quality, environment, safety and energy management system. Read more

mailto:[email protected]

https://www.florim.com/en/sustainability/governance/

https://www.florim.com/en/florim-quality-system/


Corporate bodiesFlorim Ceramiche S.p.A. is a family-owned business with fully subscribed, paid-up share capital consisting of 50,000,000 ordinary shares with a face value of 1 Euro each. The capital is 100% owned by the holding company FinFloor S.p.A., with registered office in Fiorano Modenese, which is in turn indirectly owned by the Lucchese family through FinTwin S.p.A.

The Florim Board of Directors is the body which holds the widest powers for the ordinary and extraordinary management of the Company, except for the matters assigned exclusively to the General Meeting by law or the articles of association. The current Board of Directors has 10 members, and only 4 of them do not occupy active roles within the company's organization. The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements.

Members:

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

BREAKDOWN BY GENDER

Male 70%

Female 30%

The three-member Board of Statutory Auditors monitors compliance with the law and the articles of association, and with the principles of correct administration. Its members are appointed for a period of three financial years and may be re-elected. The current Board of Statutory Auditors consists of three regular and two alternate auditors, whose mandate will end on the date of the General Meeting called to approve the 2018 Financial Statements.

The Legal Audit of the Company's Accounts is performed by an external firm. The financial statements of Florim S.p.A., and the consolidated financial statements of FinFloor S.p.A. and FinTwin S.p.A., are audited and certified by Deloitte & Touche S.p.A., while the Legal Audit of the Accounts of the group's American companies is performed by Cherry Bekaert LLP.

The Supervisory Body, confirmed in post on 6 December 2018, consists of three members who will serve until 16 December 2021. The Supervisory Body reports to the Board of Directors annually on its operations, intended to prevent the commission of the offences covered by Italian Legislative Decree 231/2001 (as supplemented/amended) by verifying the adequacy of the Model of Governance and Code of Ethics adopted by the Company, and by verifying compliance with their provisions.

The General Data Protection Regulation (GDPR) is the new European data protection law which supersedes the previous European directive. As well as designating a specific team and an external DPO (Data Protection Officer), during 2018 and early 2019 Florim organized a number of informative sessions for all its Italian head office departments with regard to the correct processing of data and the broader topic of Cyber Security in general.

<30 | 10%

30-50 | 30%

>50 | 60%

BREAKDOWN BY AGE

Composition of the Board of Directors:


KRONOS 2 CERAMICHE S.p.A.Share capital € 2,500,000

Fondazione Ing. G. LuccheseEndowment € 60,000

I.T. S.r.l. in liquidazione (in liquidation)Share capital € 10,000

EDILFLOOR s.u.r.l.Share capital € 98,126.81

ISABELLA s.r.l.Share capital € 100,000

FI HOLDING, Inc.Share capital USD 50,000

100%

10%

100%

30%

96.67%

33.75%

1% 99%

100%

100%

FIN TWIN S.p.AShare capital € 540,800

FINFLOOR S.p.A.Share capital € 10,500,000

54.2810%

FLORIM CERAMICHE S.p.A.a socio unico (single shareholder company)

Share capital € 50,000,000

100%

FLORIM USA, Inc.Share capital USD 51,865,541

FLORIM SOLUTION Inc.Share capital USD 845,943

FLORIM FAR EAST PTE Ltd.Share capital S$ 10,000

100%

MORDANO 4 s.r.l.Share capital € 100,000

85%

FLORIM Deutschland GmbHShare capital€ 100,000

100%

IMMOBILIARE SAN BIAGIO s.r.l.Share capital € 100,000

100%

000 FLORIM RUSShare capital 100,000 Roubles

Former Isla Tiles S.p.A.

Italian companies

Foreign companies

Corporate structureThe changes from the previous year are the sale of Florim Brasil and the incorporation of Florim Deutschland GmbH.


StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a company's operations in terms of policies, products and working processes: shareholders, employees, customers and consumers, suppliers, local government, the local community, banks and trade unions.

Employees and Trade Unions

Florim makes the following commitments to its employees:

• to guarantee equal opportunities, fair pay and professional growth

• to reward its human resources on the basis of transparent, meritocratic criteria

• to create safe working environments and processes

• to guarantee transparency and clarity in contract conditions

• to encourage dialogue and internal communications

Customers and Consumers

In dealing with its (retail) customers, Florim is committed to:

• creating a relationship of trust as a stable basis for business

• guaranteeing clarity in contracts and prices

• guaranteeing the reliability of its products and developing customer service

• offering, innovative, safe, environmentally sustainable products

• providing a diversified offering with services with high value added

The overall aim is also to satisfy the expectations and demands of the final consumer

Developers, architects and interior designers

To meet the needs of developers, Florim is committed to:

• offering environmentally sustainable solutions constantly at the technological and design state of the art

• establishing and fostering relationships with partner professionals

• providing consulting and technical experience from the project concept through to installation

• supplying turnkey solutions on request, where feasible

Local Communities and Local Government

In its relationships with local communities and local institutions, Florim is committed to:

• guaranteeing dialogue, cooperation and transparency

• giving value back to the local communities in the areas where it operates

• continually improving the environmental performances of processes

• researching, developing and using the most sustainable technologies

• making an economic contribution to local sporting and social projects for children and young people

Suppliers

When selecting its suppliers Florim pays close attention to companies' CSR practices. Florim's relationships with its suppliers are based on compliance with the values of its Code of Ethics; otherwise, contracts are automatically terminated. Florim also guarantees certainty in payment times and compliance with contract terms, provided the goods and services contracted are delivered as agreed.


The updating of the mapping of Florim's main stakeholders did not reveal any changes compared to the findings of the studies performed in previous years on the company's organization, its activities (not just business) and the entire value chain.

Stakeholder engagement

Florim has been engaged for years on programs to foster listening to and dialogue with some of its principal stakeholders, to establish mutual trust and bear in mind their main interests and expectations.

In line with the requirements of the GRI-Standard guidelines, this year Florim has launched an improvement process involving its first ever survey of its suppliers' level of sustainability. The aim for the future is to involve the whole supply chain via questionnaires, focus groups and projects which engage with all the stakeholders concerned. The results are provided on page 51.

Materiality analysisIn 2015, the company began an internal analysis process based on the materiality principle, in order to identify the sustainability issues of relevance both for the Group (including Florim USA) and for all stakeholders.Materiality is the threshold above which a topic becomes sufficiently important to be included in this document. Relevant topics and indicators are those which impact economic, environmental and social issues or influence stakeholders' decision-making. In compliance with the new GRI Standard guidelines, Florim has analyzed and identified “relevant” topics, which were assessed by the working team which drafted the Sustainability Report on the basis of discussions with the main stakeholders.The findings which emerged were supported by a qualitative survey external to the company's context, examining: an analysis of the press gallery, competitors' Sustainability Reports, the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document – “Sustainability Topics for Sector: What do Stakeholders want to Know?”

List of relevant topics:

Main topics Impact boundary Impact type

Economic performance Group Caused by the group

Market share Group Caused by the group and its activities

Indirect economic impacts Group and community Caused by the group and its activities

Development of human resources and training Group employees Caused by the group

Environment and safety Group employees Caused by the group

Diversity and equal opportunities Group employees Caused by the group

Regulatory compliance Group Caused by the group

Transparency of financial and other information Group and suppliers Caused by the group

Investments in its community and civic welfare

Community Caused by the group and its activities

Ethical supplier management Group and suppliers Caused by the group

Energy efficiencyGroup and energy suppliers

Caused by the group and its various activities

Water savingGroup and water suppliers


Direct and indirect environmental impactsGroup and community


Raw materials Group and suppliers Caused by the group

Sustainable transport management Group, community Caused by the group

Quality of the products offered to customersCustomers


Protection of Human RightsGroup employees



ENVIRONMENT

COMMUNITY

EMPLOYEES/ASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

Imp

ort

ance

fo

r st

akeh

old

ers

Importance for Florim

re

leva

nt

ver

y re

leva

nt

relevant very relevant

Indirecteconomicimpacts

Sustainable transport

management

Environment and safety

Watersaving

Energy efficiencyRaw

materials

Diversity and equal opportunities

Ethical supplier management

Investmentsin the localcommunity

and social welfare

Direct and indirect environmental

impacts

Green products and services

Economic performance

Quality of products offered to customers

Regulatory compliance

Development of human resources

and training

Market share

Transparency of financial and other

information

Protection of Human

Rights

Materiality approach

In the chart below, the topics in the bottom left-hand corner are considered “less relevant” because they are easy for both the stakeholders and the organization to manage and no problems have ever been reported over the years. With regard to the protection of human rights, Florim complies strictly with all the provisions of the National Employment Contract.


Risk managementAlthough it does not have a Corporate Risk Model as such, with the consequent risk mapping and risk scoring methods, Florim still implements control to identify the company's priority risks, in order to assess their potential negative effects in advance and undertake the appropriate actions to mitigate them. Information about the main risks to which Florim is considered to be exposed is provided below.

Of the risks to global growth, those deriving from the international context and the trend on the financial markets continue to be significant. The specific risks considered are those concerning supplier relations and changes in price, interest rate risks and credit risk. The process risks identified relate to its own production activities and to IT and cyber security. The liquidity risk, default risk and debt convenant risk are all relevant.Development investments and contingency funds have been identified as strategic and policy risks. Below we discuss environmental risks, risks relating to the failure to respect human rights, those concerning the failure to safeguard occupational health and safety, and active and passive corruption risks.

Environmental risk

Risks of an environmental nature are identified on the basis of analysis of the context, of the relevant standards, of the life cycle of products and services, and the condition of the environment and infrastructure.The risks identified relate to poor water resource and waste management, risks linked to the possibility of industrial accidents which may generate an environmental impact, the risk of failure to satisfy the expectations of the supervisory authorities and the community, risks related to the poor management of natural resources on the part of suppliers, and the risk of poor management of energy resources.Florim adopts specific policies for the performance of environmental protection activities on the basis of the relevant legal requirements, the regulations issued by the local authorities, and its own awareness of these issues.

Risk of failure to respect human rights

In this section, Florim discusses all the risks related to the violation of human rights, such as discrimination, workers' rights or the failure to guarantee workers' rights of free association. Although no problems relating to these issues have ever been reported in Italy, Florim gives great importance to the management of human rights and any violations which might occur along the supply chain. In 2011 it introduced a Code of Ethics in order to share its principles, values and standard of behavior within the Group and with its stakeholders.

Risk of failure to safeguard occupational health and safety

This section includes the risk relating to the occurrence of workplace accidents in relation to the activities performed, the locations and the working equipment used. In Italy, a health and safety management system compliant with the BS OHSAS 18001 standard was developed and has been certified since 2010, and the equivalent is currently being introduced in the USA, with the aim of achieving certification in 2020.

Active and passive corruption risk

Risks relating to failure to comply with the regulatory framework with regard to the prevention of bribery and corruption throughout the value chain.Florim has adopted its Model of Governance pursuant to Italian Legislative Decree 231/01 for all companies.

Integrity and compliance

Florim undertakes to have its Code of Ethics signed by and/or distribute it to all employees, associates and suppliers, and it is always available for consultation online in Italian at www.florim.com/it/sostenibilita/codice-etico/ and in English at www.florim.com/en/sustainability/governance


REX | Étoile de Rex Collection


REPORTING

FinFloor consolidated (in thousands of €) 2014 2015 2016 2017 2018

Net earnings 329,533 374,094 406,759 424,826 408,154

EBIDTA 84,395 98,115 107,186 123,081 102,003

Gross cash flow 83,274 97,268 109,148 121,788 103,363

Net profit 36,433 43,324 49,347 57,808 55,424

(Negative)/positive net financial position (54,524) (27,326) (12,508) 19,155 4,951

Final inventory 90,283 92,795 96,721 106,557 123,601

Net shareholders' equity 276,916 332,721 369,937 393,600 444,009

Total investments 41,584 34,215 53,531 103,015 75,602

In brief

Economic profile

2018

Kg of CO2 not emitted thanks to photovoltaic panels 950,000

Total water consumption (m³) / finished product (m²) 0.01%

Recycling of industrial greenware waste 100%

Recycling of water from the production process 100%

Proportion of the electricity consumed which is produced in-house (Italy) 78%

Environmental profile*

2018

Number of employees at 31/12 1,409

Total number of training hours 8,512

Number of workplace injuries 75

Workplace injury rate 3.6%

Social profile*

*For the first time, the data in this year's environmental and social profile include all the group's plants.Therefore, reporting only covers 2018.


Our approach to sustainabilityThe company's general approach to sustainability intersects with its business strategy, not as an abstract concept but as real actions embracing the three areas of responsibility: economic, social and environmental.For Florim, acting responsibly means developing and creating a very high quality, sustainable product. This impacts the entire supply chain, from raw material selection to the definition of the design of the product, carefully developed to give people a good quality of life in the spaces they inhabit.Acting responsibly also means a focus on people, in terms of both its staff and their families. Even during the most difficult economic times, the Group has decided to keep investing in its historic locations, supporting its employees and maintaining job numbers. Anyone working for Florim works in a safe place that is attractive to look at and spend time in, and benefits from a generous corporate welfare package that also extends to their family members. Last but not least, acting responsibly means protecting the environment through improvements to processes and products to reduce environmental and energy impact. It means not only generating profit to be reinvested in the local economy but also providing direct, genuine support to families in need and the district's charities. It means opening the company's doors to involve the local community in cultural and health-related events, promoting a culture of prevention and correct lifestyles. This report itself, published voluntarily for 11 years, is tangible proof of the company's sustainable approach, as it communicates the results achieved and its future objectives to its stakeholders in a clear, transparent way.


Economic ResponsibilityThe Florim Group belongs to one of the world's most famous production districts for the production of ceramic floor and wall coverings. The entire district, which bridges the provinces of Modena and Reggio Emilia, is home to a large number of companies and corporate groups which have ceramics as their core business. Florim is one of the leading corporate groups in “Italian Made” ceramics, with products completely conceived in Italy, in which innovation, sustainability and beauty come together to offer customers a luxury product of the highest quality. The Group has solid bonds to its local community and environment, constantly aware of its economic responsibility in relation to stakeholders, maintaining if not increasing local employment rates by choosing local suppliers and launching countless social responsibility projects, in order to create long-term shared value for the surrounding community. Through this sustainability reporting, Florim has been committed for 11 years now to the transparent disclosure of its financial and other data to its main stakeholders.

Comments on 2018 economic data

Consolidated turnover for 2018 was just over Euro 408 million, a fall of 4% compared to the previous year.In spite of the excellent performance of the Italian brands , which once again achieved impressive growth in volumes and sales, the American organization experienced a slowdown due in particular to external factors such as increased competition.

There was noticeable impact on EBITDA, which fell in absolute terms and as a percentage of turnover, with a figure of 25% compared to 29% for 2017.

In terms of capital reserves, the net financial position was again positive by about Euro 5 million, in spite of investments of over 75 million Euro.

Investments

Of the 75 million Euro invested during 2018, over 50 million concerned the Fiorano location, with the new factory building of 48,000 m², with its photovoltaic plant on the roof, complete with slab processing plants.In Florim USA the restructuring works on the body mix department were completed at a cost of about Euro 6 million, while at the Italian locations about 12 million Euro was spent on improvements to existing plants. To conclude, about 4 million Euro was spent on the purchase of land.

Economic Value Generated and Distributed ITALY USA

Revenues 354,591 94,677

Direct economic value generated 354,591 94,677

Operating costs 195,622 52,986

Employee wages and benefits 68,643 20,697

Payments to providers of capital 18,211 12

Payments to government 2,912 2,029

Community investments 296 11

Economic value distributed 285,684 75,735

Economic value retained 68,907 18,942

Economic Value Generated and Distributed


The new Industry 4.0 factory, an example of the technological state of the art, occupies an area of 48 thousand square meters (next to the corporate headquarters) and houses large slab processing and logistics operations. Sophisticated software is used to automatically control and manage the plants, humanoid robots and LGVs (Laser Guided Vehicles) at this factory, and the one built at Mordano (Bologna) in 2017, to ensure complete order traceability. This communication system is designed to improve the quality of customer service and to reduce material delivery times. Constructed with the company's usual strong focus on beauty and design, the building incorporates 26,000 m² of photovoltaic panels which, combined with the existing plants, will make Florim almost completely self-sufficient in energy.

New Industry 4.0 factory | Fiorano

The Pambianco Magazine and Barclays survey-award, which highlights the companies which best represent Italian manufacturing, was published in 2018. The Florim Group won first prize in the DESIGN/FINISHINGS sector. Businesses were assessed on the basis of their financial statement figures for the last 3 years, as well as on their brand notoriety, their distribution strength and the market band in which they operate. The absolute winners in the four categories (fashion, beauty, design/home and design/finishings) were elected on the basis of these factors. A ranking of the 500 companies examined, including all the various sectors, was also drawn up to identify Italy's 80 best-performing businesses. Florim was in seventh place in this overall table.The “leQuotabili” title identifies companies which have everything required for stock market listing or which are outstanding on the Italian scene with regard to the factors stated above.

“leQuotabili” Award


Environmental ResponsibilityThe green “L” in the Florim logo reflects the company's determination to protect the environment of the area where it originated and is still based today. Years of research and investment have made it a unique benchmark in environmental protection. This is proven by its figures, its certifications and the awards obtained.

The company's commitment with regard to a sustainable footprint is not limited to compliance with current legal requirements, but sets itself objectives for continual improvement of its product, its process and, also, the management of its supply chain. The Group controls and monitors its raw material suppliers via a specific software program - used at the 3 production plants - for the recording of data such as quarry location, distance from the factory, recycled content declaration and technical safety data sheets.

The Florim product is therefore produced with “ingredients” that are carefully selected with regard to both quality and their sustainable approach. Natural raw materials, which are then blended and transformed into a material that is sustainable in its turn, confirmed by the various product environmental certifications. In fact, all production greenware waste and process water is recycled at the Group's plants, and there is a strong focus on waste management and overall energy impact.

These factors have enabled the company to achieve unique milestones, summarized in the pages which follow, and confirmed by international certifications. Florim was the world's first ceramic covering manufacturer to achieve EN ISO 50001 certification for its effective energy management policy. Not to mention EN ISO 14001 for environmental management, and certification of its ISO 9001 quality management system.

Florim | headquarters and view of photovoltaic panels (Fiorano Modenese, Modena, Italy)


2highly-regarded process

certifications:ISO 14001 (ENVIRONMENT)

and ISO 50001 (ENERGY) EPD

2 departments

(marketing and communications) engaged on digitizing

advertising toolsin both Italy and the USA

10,537 tonsof CO2 not emitted

since the photovoltaic plantwent into service in 2011

CO2

100%is the recycling percentage

of the water usedat the production plants

in Italy and the USA

45,000 m²the photovoltaic panels

cladding the surfaceof the Florim headquarters

78%is the proportion of the electricity consumed at the Italian locations

which is produced in-house

24trucks of wooden pallets recovered and recycledat the American location

in 2018

2cogeneration

plants

1laboratory for the development

of contemporary design projectswith a specific focus

on the materials' green content

100%the recycling of industrial

greenware wastein the production processat all the Group's locations

102,080the number of disposable

water bottles not usedthanks to good internal practices

at the American location

162,706 Kgof shrink-wrap plastic

recycledat the three locations

Our “green” projects in figures


Certifications

System and process certifications:

EN ISO 14001TÜV has awarded Florim Italian plants the highly-regarded EN ISO 14001 voluntary certification, which confirms the compliance with a series of internally certified procedures intended to improve the internal environmental management system. The decision to seek this certification springs from the desire to reconcile quality with efficiency and productivity while protecting the environment and community in which the company operates.The American location has set itself the goal of obtaining certification during 2019.

EN ISO 50001Thanks to a careful energy management policy and aided by the latest investments in the production area also intended to improve energy efficiency, Florim was the world's first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System.

Environmental management

Florim's operations have always been oriented towards optimization of the impact on the local community and the environment. Thanks to the work of its research laboratories, the support of all staff and continuous investment, tangible results have been achieved. In 2018, the Group was not fined for any breaches of environmental regulations or laws.The pages which follow report the main environmental responsibility indicators, from the raw materials used in the production process through to the packagings used.

Florim | internal view of Industry 4.0 factory – Plant 2 (Fiorano Modenese - Modena, Italy)


Florim recycles and optimizes, within the production process, all greenware scraps, dust residues from filters and sludge from the process wastewater treatment system. Moreover, the company is able to recycle almost 99% of total waste, internally or externally.As well as the waste from its own production process, the company also reuses waste produced by third parties in both its Italian and United States plants.

Waste

WASTE BY TYPE AND DISPOSAL METHOD IT US

Total waste recycled (t) 40,117 1,107

_of which hazardous waste (t) 18 0

Total waste disposed of (t) 507 2,512

_of which hazardous waste (t) 360 0

Hazardous waste as a percentage of total waste (%) 0.93 0

Water resources

Virtually no environmental impact of wastewater discharges is specified since all the water from the production cycle at the group's locations is 100% reused. All other effluents comply with legal requirements.

In order to optimize the use of water resources, Florim is trialing innovative dry rectifying lines which enable the company to eliminate the physical/chemical treatment of the water used in the rectification process.

Fiorano has also installed a rainwater collection tank which recovers rainwater and optimizes its use by feeding it into the production process. The only water not recycled is that utilized for the company's washrooms and kitchens.

TOTAL WATER WITHDRAWAL IT US

total water consumption (m³) 307,194 111,990

_of which from wells (m³) 150,249 0

_of which from water main (m³) 23,500 111,990

_of which industrial (m³) 133,445 0

Total recycled and used water (m³) 283,694 184,783

Total water consumption (m³) / finished product (m²) 0.016% 0.012%

The method used to calculate hazardous waste in the United States is different from that implemented under European regulations.


All packaging used for Florim materials is made from recycled paper and parts of the coverings used to protect pallets of finished products consist of recycled plastic. What's more, all the packaging used (boxes, cardboard, shrink wraps, pallets, etc.) can be completely recycled by the end user. The investments made at the Italian locations include a new type of packaging machine which cuts the cardboard packaging to the dimensions needed for the tile size being packed, completely eliminating waste due to leftover inventory and saving significant amounts of cardboard. During the year under consideration, 162,706 kg of shrink-wrap plastic was recycled at the three production locations.

Packaging and coverings

As the materiality assessment states, Florim plants have no significant impacts on the biodiversity of its local area since the company is located inside the Fiorano Modenese ceramics manufacturing district, at least 5 Km from the nearest nature reserve at Salse di Nirano. Moreover, the Mordano location is more than 10 km from the nearest nature reserves. Great care is taken over the choice of the suppliers of the raw materials used for tile body mixes, each of which is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir. 79/409/EEC) and habitats (EU Dir. 92/43/EEC) and the United Nations Convention on the protection of biodiversity. The American location also has no significant impact on the biodiversity of the local area. The facility is in an industrial park surrounded by farmland, and impact assessment has revealed that the area has no species at risk of extinction or critical habitats. Almost all raw materials are quarried within 500 miles of the plant. It has also introduced a software program - used at the 3 production plants (Italy and the USA) - for the management of data on the origin of raw materials, such as quarry location, distance from the factory, recycled content declaration, technical, safety and radioactive content data sheets and the expiry of the quarrying permit issued by the government.

Raw Materials and Biodiversity

Florim | Industry 4.0 Factory - Plant 2 at Mordano (Imola, Bologna)


Energy management

There is no disputing that large amounts of energy are required to power the production processes of ceramic tile plants, with consequent direct and indirect impacts on the local area and the environment. All the Group's locations have state-of the-art plants with low energy impact, in order to optimize the use of resources. With two cogeneration plants and 19,000 m² of photovoltaic panels already operational, the company certainly sets a new benchmark for the entire ceramic tile industry.

In 2018 the energy self-generation plants in Italy achieved the following targets:

In 2017 a new cogeneration plant with power of 8.3 MW went into operation at the Mordano location to optimize energy consumption by producing energy and also exploiting the heat energy produced within the production cycle. Thanks to these plants, the Group is able to self-generate over 78% of the energy consumed by its Italian locations.In 2018 the amount of electricity self-generated by Florim would have been able to supply the energy needs of about 42,000 homes. This figure was obtained by dividing the MWh generated by the average electricity consumption of an Italian home (Istat figure for 2012 - the latest year available on the website).Below we report the Florim Group's energy consumption and fuel consumption from non-renewable resources.

78%self-generated electricity

as a proportion of consumption

96.5Gigawatt hours (GWh)

of power self-generated

Energy consumption

TOTAL ENERGY CONSUMED WITHIN THE ORGANIZATION 746,351

of which:

from non-renewable fuels GWh (Natural gas, diesel, ...) (GWh) + 713,996

from renewable fuels (bio gas, ...) (GWh) + 0

electricity, heating, cooling and steam purchased for consumption (GWh) + 28,549

electricity, heating, cooling and steam generated on-site and not consumed (GWh) + 2,921

electricity sold (GWh) - 0,885

ELECTRICITY CONSUMPTION 30,585

of which:

Electricity purchased (MWh) + 28,549

Electricity produced by photovoltaic panels (not including turbines) (MWh) + 2,921

Electricity sold (MWh) - 885

CONSUMPTION OF FUEL FROM NON-RENEWABLE SOURCES 2,566,785

of which:

Natural gas consumed in production, by turbines and heating (GJ) + 2,544,752

Diesel fuel consumed by company cars (GJ) + 6,050

Diesel fuel consumed by company logistics and production vehicles (GJ) - 15,983

Year 2018 - Italian data


Photovoltaic plant

kWp2 kWh produced kg of CO2 not emitted

2,698.92 22,302,845 10,573,860

The Fiorano Modenese headquarters have more than 45,000 m² of photovoltaic panels, which help the company to generate clean energy and avoid the emission of CO2 into the environment. The last 26,000 m² of these, installed at the end of 2018 and covering the roof of the new factory (about 48,000 m²), will come on stream during 2019. The first plant dates from 2011 and its figures since it went into production are as follows:

(The values used for the 2018 calculation refer to ISPRA - Italian Environmental Protection Institute publication no. 280/2018)

Good practice

In addition to issuing and distributing the energy saving handbook for its offices, the company is also trying to maximize savings on the raw materials which they use, and specifically the use of paper. Internally, the company only purchases reams of paper which carry environmental certification and used paper is collected separately for proper disposal. Externally, most of the merchandising tools the company distributes are made from recycled paper, and it is encouraging their gradual digitization. All catalogues are available in digital format on the Group's website and from the main dealers, who are provided with a touchscreen tool containing the collection catalogues in .pdf format and other tools for final consumers.At its Clarksville location, the company has eliminated the use of disposable water bottles, replacing them with individual reusable bottles provided by the company and a series of fill-up stations. About 34,200 bottles are removed from the waste cycle every year. In Italy, more than 890 kg of plastic bottles and 2,150 kg of glass were collected and recycled in 2018.

Florim USA is also a member of the Clarksville-Montgomery Green County certification program. The company's staff actively participate in the program, which aims to help other local organizations to promote and implement best practices with regard to safeguarding the environment and environmental resources.

Florim has also introduced a new payslip distribution procedure, introducing an online processing system. This tool has introduced new functions with greater flexibility for employees, and the company no longer prints out payslips every month. In Italy, the project initially included all office staff and was subsequently expanded to cover factory workers. During the year under consideration, 56% of Italian employees joined the scheme, while in the USA the take-up rate was 100% of staff.

Transport

The materiality study reveals that transport is a significant factor for both stakeholders and Florim itself. The company is not able to measure the impact of transportation of finished product on the local area since all shipments are ex-works. However Florim, which has been introducing electric vehicles to replace its oldest, most obsolete unleaded petrol forklifts for years now, has optimized the handling of materials thanks to the new, highly-automated logistics hub created at the via Canaletto location. In 2018 about 64% of all production and logistics vehicles used at the Fiorano and Mordano locations were electric, with no direct greenhouse gas emissions. In America, 40% of vehicles used in indoor areas were electric.


Atmospheric emissions

The industrial facility emits greenhouse gases, basically carbon dioxide (CO2), from the following main sources:• combustion, from the burning of fossil fuels (such as natural gas)• processes, from the minerals in the raw materials, any organic matter in the clays used, and any organic additives in tile body mixes.

In order to comply with Directive 2003/87/EC (ETS - Emission Trading Scheme), Florim Italia has been reporting and certifying its CO2 emissions of its Italian plants since 2013.

CO2 EMISSIONS 2016 2017 2018

CO2 emissions (t) 132,960 138,994 145,384

CO2 emissions (t) / Finished product (t) 0.35 0.34 0.36

EMISSIONS FROM THE PRODUCTION CYCLE 2016 2017 2018

Particulate material (g/m² finished product) 1.18 1.28 1.06

Lead (g/m² finished product) 0.00 0.00 0.00

Fluorine (g/m² finished product) 0.12 0.04 0.11

The absolute increase in CO2 emissions can be imputed to the increase in output. On the other hand, the ratio between CO2 emissions and tons of finished product produced increased slightly, because in 2018 the sale of spray-dried material to other companies rose (+24%) compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product).

The figures for the American location are not included in the table, since the calculation methods are substantially different, and no comparison is possible. However, all parameters comply with the relevant regulatory framework.

COMPANY'S DIRECT EMISSIONS | SCOPE 1

Greenhouse gas emissions from CO2 CH4 N2O HFCs PFCs SF6 NF3 CO2equivalents

Stationary combustion (t)* 79,389 1.4 0.1 0 0 0 0 79,467

Mobile combustion (t)* 1,633 0 0 0 0 0 0 1,633

Cogeneration plants (t)* 56,677 1.0 0.10 0 0 0 0 56,732

Calculation of HFCs and PFCs (t)* 0 0 0 0 0 0 0 0

Total 137,700 2.4 0.2 0 0 0 0 137,832

Gases included in the calculation: CO2, CH4, N2O, HFCs, PFCs, SF6, NF3. Year 2018 - Italian data. *Source - 2014 IPCC Fifth Assessment Report.

Gases included in the calculation: CO2, CH4, N2O. The gases not included in the calculation are: HFCs, PFCs, SF6, NF3. Year 2018 - Italian data.

EMISSIONS FROM THE USE OF ELECTRICITY PURCHASED BY THE COMPANY| SCOPE 2

Greenhouse gas emissions from CO2 CH4 N2O HFCs PFCs SF6 NF3 CO2equivalents

Purchasedelectricity (t)

8,665 17 43 0 0 0 0 8,725

The greenhouse gas emission factors are those listed on page 36 - Table 2.12 of the “ISPRA - Fattori di emissione atmosferica di gas a effetto serra e altri gas nel settore elettrico nr. 280/2018” [ISPRA - Greenhouse Gas and other Gas Atmospheric Emissions Factors in the Electricity Industry no. 280/2018] and refer to 2016.


REX | Esprit de Rex Collection


Social ResponsibilityThe Group's Social Responsibility is reflected in a high degree of attention to the needs of the people who work for the company, their families and the local community.As well as specific measures to support incomes and jobs, even during the hardest economic times, Florim has decided to invest in its workforce in order to constantly increase their sense of belonging and improve the quality of teamwork.Passion, innovation, and a constant commitment to improvement are the strategic principles underlying the Group's approach to business, and support/accompany its personnel in the achievement of shared objectives. Although large and with a complex structure, the company has made every effort to keep internal relationships and communication simple at all levels. What's more, anyone working at Florim works in a safe, clean, well lit, attractive location that is a good working environment, even in the production departments where less attention is generally paid to conditions.The large number of corporate welfare projects demonstrate the care the company dedicates to its workforce, especially a particularly strong awareness of health issues. Thanks to a unique partnership with the local hospital, Italian employees enjoy discounts and shorter waiting times for specialist medical examinations. Specific meetings on health and wellness topics are also organized for all employees and their families.Florim also shows a particularly strong commitment to the local community. This is expressed through the activities of the Fondazione Ing. Giovanni Lucchese and the Health&Training Center. Other community welfare actions include the company's decision to open its doors to the Sassuolo ceramics district, with the aim of creating beneficial synergies. By organizing cultural events, congresses, training sessions, awards and lots more, the Group annually hosts thousands of people living locally, free of charge. To enable this, in 2013 the company inaugurated the Florim Gallery: a location of 9,000 meters specifically for hospitality and the presentation of its products. Large spaces, light and simple, symmetrical lines are the keys to the character of this modern, elegant location, which has established itself in recent years as the ceramic district's cultural hub, winning the Emilia-Romagna Region's “special prize for culture”.

Employees & corporate welfare

The pages which follow provide an overview of the activities and projects run by the Group for its employees during the last few years.

Below we summarize some of the programs run for Italian employees: • agreement with Sassuolo Hospital enabling Florim employees and their family members to enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basis • special agreements with local health facilities • tax advice at special rates• discounts on the purchase of Florim products for employees' homes • free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family members • free provision of water and mineral salts in the plants during the summer • distribution of fuel vouchers to employees for the Christmas holidays.

In the USA, full-time staff are provided with:• Health and dental care insurance• Vision insurance• Life insurance (supplemental life insurance for employees and families available optionally) • Short-term and long-term disability support • Employee retirement plan• Discounts on the purchase of Milestone products for employees’ homes• Free provision of water year round.


Florim's people

In 2018 there were 1,409 Florim people worldwide. This number includes the employees of Florim Italia, Florim USA and the other international locations.The following is the approximate subdivision of employees by location and type of contract.

ITALY USA TOTAL

Men Women Men Women

Permanent 653 394 216 89 1,352

Temporary 35 18 2 2 57

TOTAL 688 412 218 91 1,409

ITALY

Managers Executives Office workers and apprentices

Office ancillaries

Factory workers and apprentices

Agency staff/interns

Total

Men 20 27 144 74 401 22 688

Women 3 2 175 15 203 14 412

TOTAL 23 29 319 89 604 36 1,100

USA

Managers Executives Office workers and apprentices

Office ancillaries

Factory workers and apprentices

Agency staff/interns

Total

Men 5 21 28 0 163 2 219

Women 0 9 17 0 62 2 90

TOTAL 5 30 45 0 225 4 309

<30; 9%

30-50; 55%>50; 36%

ITALY

AGE-RANGEThe graphs which follow illustrate the group's employees subdivided by age-range and working location.

<30; 21%

30-50; 50%

>50; 29%

USA


NEW EMPLOYEE HIRES AND EMPLOYEE TURNOVER ITALY USA

New employee hires 44 61

Positive turnover percentage (%) 4.17 18.77

Positive turnover by age-range (%)

>30 1.89 8.92

30-50 1.70 8.92

>50 0.57 0.92

Positive turnover by nationality (%)

Italy 4.07 Data not available for Florim USAVenezuela 0.09

Positive turnover by gender (%)

Men 2.65 12.31

Women 1.52 6.46

Total turnover (%) 7.76 25.40

Total turnover by age-range (%)

<30 2.32 5.47

30-50 3.03 17.04

>50 2.41 2.89

Total turnover by nationality (%)

Italy 7.31

Venezuela 0.18

Switzerland 0.09

France 0.09

Poland 0.09

Total turnover by gender (%)

Men 5.44 18.73

Women 2.32% 6.67%

The calculation of the employees who have left the company includes those leaving for all reasons, including resignation, sacking, retirement and contract expiry, and all types of workers, thus including agency staff and interns. The total turnover percentages were calculated by dividing the total personnel joining and leaving the company over the period by the average total employees for the same period, multiplied by 100. With regard to the minimum periods of notice required for operating changes, the National Collective Employment Contract (NCEC) regulates the period of notice and establishes the trade union rights and the issues for negotiation. The Company also issues an annual schedule of regular meetings with trade union representatives, apart from any emergencies which may arise.The company guarantees compliance with national legal and contractual requirements regarding trade union membership, and its workforce is represented by a number of national trade unions (CGIL, CISL and UIL) with which the Company cooperates to reach agreements for its employees' benefit.Current company policies were not found to include any risk factors with regard to the safeguarding of human rights requiring any policy changes.


USA employee welfare activities

In the USA in 2018 the company held its annual picnic for employees, offering them a wide variety of foods, games, activities and live shows, in an event which provided an unforgettable day's enjoyment. Various prizes were awarded during the event, including a holiday for two. The employees' anniversary dinner, during which awards were made to employees with 5, 10, 15 and 20 years' seniority, was also held during the year. The employee of the year Joepet Garcia also received his award, in the presence of the Chairman, the CEO and other top executives.

Summer play schemes

In 2018 the free summer play schemes for the children of employees at Fiorano and Mordano were continued for the seventh consecutive year. Six different centers, across the area between Modena and Bologna, hosted 102 children; the company paid the fee for two weeks' attendance.

Internal communications and training

Internal communications were strengthened during 2018 by the Florim HUB project, which encouraged the sharing of information and corporate values between departments and businesses. The project created the first communication system accessible to all Group employees, whatever their working location. The organization maintained its strong focus on in-house training, seen as a key factor in the company's development, and a tool for stimulating and fulfilling the potential of its human resources.More than 8,500 hours of training took place at the Group’s locations during 2018.

Corporate welfare projects

HOURS OF TRAINING (AVERAGE) ITALY USA

Women 8 7

Men 8 7

Factory workers 8 7

Office workers 9 7

Executives 5 7

Managers 4 7

Average hours of general training 9 1

Average hours of safety training 7 1


Health and safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health & Safety Assessment Series) certification from TÜV; this international standard certifies the implementation of an internal management system oriented towards occupational health and safety. This award, received by both Italian locations, confirms the company's constant commitment to the well-being of its employees. The objectives for 2019 (2020 for America) include ISO 45001 certification, superseding BS OHSAS 18001. Every year, in addition to plant inspections and maintenance, hours of safety and environment training are organized to raise awareness among workers and supervisors. With support from Sassuolo Hospital, the company also organizes free events open to the local community for the promotion of a healthy lifestyle. BLSD refresher courses are ongoing for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site. In 2018 two new defibrillators were purchased and installed in the new factories, alongside the 4 already in place.A health project targeting all employees was launched at the Clarksville location during 2018. A different initiative is featured every month, in order to raise awareness and promote the importance of prevention. Information sessions on the health and wellness benefits offered by the company were held during December.

TOTAL WORKPLACE INJURIES ITALY USA

Total workplace injuries 51 24

Of which during journey to work 3 0

Of which in the workplace 48 24

Fatal accidents 0 0

Working days lost 1,225 275

Hours worked 1,542,243 606,382

Possible working hours / /

Gravity (%) 7.94 4.54

Workplace injury rate (% frequency) 3.31 7,9*

*The workplace injury rate required by the USA Government uses an American calculation method, not comparable with that used in Italy.

Florim | entrance to Health&Training Center at the headquarters (Fiorano M.se - Modena, Italy)


Free cardiological and gynecological screening for all women in the Florim organization. This project was launched in 2018 as part of the Florim Health&Training Center activities.

The figures speak for themselves: in Italy, cardiovascular disease is the number one cause of death amongst women, and there are 7,700 new cases of uterine tumors every year. Prevention and early diagnosis are the crucial factors in overcoming this challenge.

With the “Florim mette una virgola rosa” [Florim Pink Comma] project the company, in partnership with Sassuolo Hospital, encourages all female employees to take up free screening to prevent the most common cardiovascular and gynecological diseases. The results achieved were impressive, with 372 screening sessions performed: 190 cardiological and 182 gynecological. These high figures reflect the importance of the project, run thanks to the invaluable assistance of Dr Marcella Camellini, Medical Director of the Cardiology Unit, and Dr Ivana Algeri, Medical Director of the Obstetrics and Gynecology Unit both at Sassuolo Hospital.

Project | Virgola rosa

In 2018 Florim launched a project targeting all Italian employees intended to improve internal processes and foster the feeling of belonging to the organization.

“But wouldn't it be better if we did it like this?” With these words, the company invited its workforce to send in ideas and suggestions for changes, with the aim of selecting the brightest proposals and putting them into practice.

4 different areas for suggestions were chosen:

PASSION - improving employees' feeling of belonging, or projects helping to achieve a better work-life balance

INNOVATION - in company products, processes and communication. New solutions in both offices and production areas, for improving the end product, the process by which it is produced and the way it is marketed

ENVIRONMENTAL SUSTAINABILITY - measures to reduce environmental impact in both the offices and production areas.

CUSTOMER SERVICE AND DISTRIBUTION STRATEGY - optimizing the service provided to customers, and identifying new distribution channels or sales approaches.

The best proposals will receive prizes at the Premio Lucchese 2019 awards.

Project | Officina delle idee


Salone del Mobile 2019 | Florim Installation. Focus on the new Policroma collection by CEDIT


Local community & culture

This chapter describes a number of programs Florim runs for the local community in the area where it operates.

Fondazione Ing. Giovanni Lucchese

In 2013, thirty years after the untimely death of the company's founder Giovanni Lucchese, to honor his memory his family established a Foundation in his name, which since then has funded organizations and associations that support families in need in the ceramics district. The Foundation also supports a variety of projects such as the summer play scheme for employees' children, the Premio Lucchese, the community projects run in the Florim Gallery, and the Florim Health&Training Center, described in more detail below. The Foundation's activities during 2018 included the opening of a new, state-of-the-art operating theatre at Baggiovara Hospital. The theatre, equipped with leading-edge radiology equipment, including a high-powered angiograph, is defined as a hybrid operating room. It is a single, high-tech location where different specialists can work as a team and, without moving the patient, can produce an immediate diagnosis and operate simultaneously with greater speed, precision and safety. In 2018 Florim also funded the “Opera Anziani” project, a building for the elderly at Mordano (Bologna) with both residential and outpatient areas.

Florim USA community welfare

With the active support of its employees, Florim USA undertook a number of projects to support its local community during 2018. These include the award of four scholarships to the most deserving students at Austin Peay State University, in memory of Giovanni Lucchese. The company also donated to the “Clarksville Association for Down Syndrome”, the local organization working to promote the social inclusion of people with Down Syndrome. After the large-scale destruction caused on Puerto Rico in 2017 by hurricanes Irma and Maria, in 2018 employees continued to offer their support by donating basic essentials. Last but not least, in 2018 the company supported the Lowe's - Swing for Charity foundation, which increases educational opportunities and supplies aid to disaster-hit communities.

Aziende Modenesi per la RSI

“Aziende Modenesi per la RSI”, an independent, open, inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility, was established on 30 September 2014, with Florim as a founder member.

Premio Lucchese

In 2018, the Premio Lucchese award was held for the thirty-first time. The award, established in memory of Giovanni Lucchese, consists of scholarships awarded to students at the “Alessandro Volta” Technical High School in Sassuolo who graduate with full marks. During the award ceremony, held every year at the Florim Gallery in association with Società Ceramica Italiana of Bologna, topics of current interest are discussed before an audience of eager young listeners.

Intrapresæ Collezione Guggenheim

As befits a company that combines the values of its local community and historic and artistic heritage with a flair for research and innovation, Florim recently launched a partnership with the Peggy Guggenheim Collection in Venice. Since its foundation, Florim has always had a unique ability to incorporate the true cultural significance of its industry in its business model, and by this project once again confirms its commitment to promoting art by supporting a collection of extraordinary beauty.

2018 Sustainability Report42 2018 Sustainability Report

The project, run jointly by Florim and Sassuolo Hospital, adopts a completely new model, combining industrial culture and healthcare in an original way to benefit the local and community in which the promoters operate. Florim Health&Training is the synthesis of this idea: an innovative center which promotes local training, health education and information, advanced medical simulation and research. The Santa Maria Nuova Hospital in Reggio Emilia joined the project in 2017.

The Center

On the main Florim site and opened on 16 April 2014, the Center is more than 600 square meters in area and contains a modular lecture theatre able to seat 100 people and a number of classrooms for seminars and lessons. At its heart is a state-of-the-art control room, crammed with technology that operates dummies capable of reproducing human functions of all kinds. An opportunity for maintaining the skills of emergency healthcare workers via advanced simulation. In 2018 Florim decided to donate two new state-of-the-art simulators to the Center, so there are now 4 latest-generation dummies for use by health care workers: infant, child, adult and the birth simulator.

Health meetings

Designed as a space for community use, the Center also aims to become a place where all sections of the population - workers, schoolchildren, parents, teachers, volunteers and even just members of the public - can learn about preventive health care and acquire first aid skills. After the distribution to Florim employees of a questionnaire surveying their training needs and preferences, a Center Scientific Committee of Sassuolo Hospital medical personnel was appointed and drew up a plan of quarterly “Health meetings”. All meetings are led by doctors with expertise in the various topics, who answer the many questions from the audience at the end of their talks. Between its opening and the end of December 2018, the Center hosted 21 meetings on a variety of topics.

Healthcare discounts for Florim employees

The project also includes a major welfare program for all Florim employees and their family members, entitling them to discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basis.

American Heart Association

The American Heart Association (AHA) is the oldest and most respected American not-for-profit voluntary organization with the mission of combating cardiovascular diseases such as heart attack and stroke. In 2015, the AHA, via the Simaid International Training Center, named the Florim Health&Training Center as an Authorized Training Center for basic and advanced cardiopulmonary resuscitation.

Florim Health&Training CenterWatch the

Heath&Training Center video

https://www.youtube.com/watch?v=GoRTUd90jos


In December 2018, the Emilia-Romagna Region awarded Florim Gallery its “special prize for culture”, citing it as: “A space embodying the generosity of a far-sighted entrepreneurial vision, which invests in the cultural growth and development of its local area by providing an innovative space of extraordinary beauty where the values of culture and work can meet”.

Since it was opened at the end of October 2013, the Gallery has hosted more than 100 events and welcomed more than 60,000 people.

Created by renovating old factory buildings, Florim Gallery is a multi-purpose space of 9,000 m² at the Fiorano Modenese headquarters. A versatile location for displaying products and hosting events which opens out to the local community, adopting a new industrial culture model. Large spaces, light and simple, symmetrical lines are the keys to the character of this modern, elegant location, in the heart of the Sassuolo ceramics district. The building - on two levels - displays the Group's products in several modular spaces, with a large events space in its center.

The Emilia-Romagna Region launched the “Premio ER.Rsi” Responsible Innovators Award in recognition of the projects making the greatest contribution in the area of Sustainability. Florim had already been an award-winner in 2016 for its - “Master in Florim” – in-house training school created to aid youth employment, and in 2015 for the “Health&Training” Center founded in partnership with Sassuolo Hospital.

Florim Gallery wins culture prize


CEDIT - Ceramiche d'Italia | Policroma Collection


The graphic below shows the ingredients of the Florim ceramic product, which consists of almost 90% choice quality natural raw materials. It is followed by finished product packagings, and other typical inputs of the porcelain stoneware production process.

The Florim ceramic product

Clays and kaolins 51%

Feldspars 38%

Sands 4%

Packagings 3%

Glazes 2%

Additives 0.7%

Whiteners 0.6%

Grinding mill balls 0.2%

Colorants 0.1%

Inks 0.04%

THE PRODUCT

The “Made in Florim” ProductThe “Made in Florim” Product is characterized by the constant search for new ways of embodying "beauty", the essence of the company's work and aspirations ever since 1962. Ceramics have come a long way since those days: the traditional 20x20 cm tile has now been transformed into a slab more than 3 meters in length, a genuine decoration and interior design product. For Florim, giving form to “beauty” involves the meticulous development and production of products intended to improve the way people relate to their spaces.Florim implements these principles to evolve more and more innovative products, with a vision also reaching beyond the confines of its own industry and across all geographical barriers, in a continuous fruitful dialogue between creativity and technology, in a vision of the future dominated by creativity, which generates new beauty with the aid of the most advanced technologies. DESIGN IS OUR PASSION is the message Florim aims to communicate through its commercial brands, underlining the attention to detail and sophisticated beauty that all its products share.As well as ensuring superlative raw material quality, Florim constantly delivers safety, high innovative content and user-friendliness. The people who produce them work in a safe place and in ethically sustainable conditions. Due to their nature, all the Group's products are guaranteed free from pollutant emissions, do not accumulate electrostatic charges, are frostproof and completely inert and are undamaged by contact with flames. The corporate websites and collection catalogues contain the technical data sheets which detail the product information (resistance to abrasion, stains, frost, etc.) for every collection, as well as its recycled material content, with the relative certificates. Every collection the Group offers is the outcome of a meticulous production process using latest-generation technologies to guarantee products of the very highest quality with low environmental impact. 100% of greenware waste from the production process and 100% of wastewater are recycled in every Florim plant. As required by the GRI, we hereby confirm that no incidents of violation of regulations and/or voluntary codes regarding the health and safety of the Group's products and regarding information and labelling occurred.


2018 was a year rich in many awards, presented for the outstanding design content of the Florim brands. Leading the way was CEDIT – Ceramiche d'Italia, the brand with a clear vocation for experimentation, offering collections styled by Italian designers of international fame.

This impressive collection of awards reflects great determination and an innate passion for beauty, which have driven the company to challenge common conceptions and successfully transform what we all call a tile from a functional to a design object.

FEBRUARY | The Floor Gres brand's Flowtech collection receives the Wallpaper* Design Awards 2018 (UK)

FEBRUARY | Storie by CEDIT wins the Good Design Award, one of the most historic and most coveted International Design prizes (USA)

APRIL | Artwork by Casa dolce casa - Casamood is a finalist at the HD Awards in New York (USA)

MAY | The Rilievi collection designed by Zaven for CEDIT receives the NYCxDESIGN Award (USA)

NOVEMBER | The CEDIT Rilievi collection triumphs at the Archiproducts Design Awards 2018 (IT)

DECEMBER | The Rilievi collection was chosen by the Elle Decor Italia editorial board for the EDIDA - Elle Deco International Design Awards for design excellence (UK)

Multiple design awards


Florim product certifications

CE Marking guarantees the user that the materials purchased meet the requirements of the relevant regulations and that the characteristics concerned are virtually unchanged for all production lots. It is a declaration of conformity which safeguards the consumer's safety, and the presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements.

Ecolabel (EC Regulation 66/2010) is a certification granted to products which comply with ecological and performance criteria set at a European level, concerning raw material extraction, supplier selection, manufacturing processes, packaging, distribution, use and disposal.

Several ceramic tile collections bearing the Florim and Florim USA brands have earned certification from Bureau Veritas for their pre-consumer recycled material content. These articles are therefore fully eco-compatible and can meet the environmental sustainability requirements imposed by many international certifications.

Florim and Florim USA are members of the U.S. Green Building Council (USGBC), the most important association which promotes the reduction of buildings' negative impact on the environment. To allow the effective monitoring a project's level of sustainability, the USGBC has developed a certification procedure for the development of sustainable buildings, which assess and certifies the sustainability of a building in its entirety. Florim materials are able to help to gain “LEED” points in a number of areas (data available on the Florim brand websites).

Florim and Florim USA have achieved the prestigious Greenguard certification for all their products. Issued by the American body UL Environment, this certification aims to reduce indoor pollution, caused by interior design systems and materials. UL Environment thus aims to protect health by improving air quality and reducing people's exposure to chemicals and other pollutants. Florim has also achieved Greenguard Gold Certification, which imposes even stricter limits to confirm that a given product is suitable for use even in locations such as schools and health care facilities.

The EPD, or Environmental Product Declaration, is a document which defines the environmental impacts arising from production. In 2016 Florim participated in the study - certified by the German organization IBU - performed on the ceramics industry average data, which aims to raise international awareness of the excellence of the environmental standards achieved. Florim USA also achieved the EPD certification, issued by the NSF certification body.

FLORIM stone brand products have received NSF (National Sanitation Foundation - Food Equipment Materials) certification. This certification originated in the USA but has now become the worldwide benchmark for materials suitable for use as “solid surfacing for splash zone”.

Florim and Milestone products are also supplied complete with HPD - Health Product Declaration. This is a form of self-certification mainly used in the USA and comparable to the European safety data sheet. They are standard declarations for transparent communication on products' ingredients and the associated risks.

Product responsibilityHere we summarize the concept of “Made in Florim”, denoting a product that encapsulates the company's core values: passion, innovation, a constant commitment to improvement and corporate social responsibility.

EU Ecolabel: nr. IT/21/04


Customer focusAs well as its strong focus on its products, Florim concentrates its efforts on customer service.With 7 different commercial brands and a service brand, the Group offers its customers a broad spread of products and personalized support in the various phases of the material selection process. Every brand addresses different targets and has its own, easily recognizable identity. They are therefore complementary brands which, overall, are able to satisfy the tastes and demands of every market segment, from the biggest architectural projects to interior design.Florim is constantly developing new solutions for an optimal response to customers' needs. With this aim, it has recently built a new Industry 4.0 factory of 48 thousand m², to ensure an even higher level of customer service in both order management and material delivery times.

Our design service

The complexity of contemporary architectural projects implies careful selection of the building's coverings. This selection must give consideration to both the product's aesthetic impact and its technical properties.Florim Solutions reflects the Florim Group's determination to support architects with competence and experience in the selection of the right applicational and technological solutions for the success of their projects. The team of specialist engineers and architects is able to accompany the architect and client from the initial stage of choosing the concept to structural checks and the construction and installation stage, offering turnkey solutions.Stoneware ventilated facades, technical floorings, pools and spas are just some of the areas covered by Florim Solutions through a service offering high level assistance for every aspect of the project.


OBJECTIVE INDICATOR ITA USA

Continual improvement of control of the production process

Percentage of first grade product 95.8 95.2Quality rate 90.7 90.3Scrap rate 5.3 5.05

Productivity 20.3 20.3

Improvements in sales performance and customer satisfaction

Innovation rate 20.2 not measured% Coverage 85.9 not measured

Total portfolio available for shipment in 1 month (%)

92.3 not measured

Optimization of range and stocks% Obsolete stock 4.3 3.4

Stock turnover rate 1.3 2.6

Gradual elimination of disputes, complaints and claims concerning service

% m2 with genuine claims 0.38 0.6% complaints/order items 0.99 0.8

Percentage of first grade product: percentage ratio between the square meters of first grade products and the total square meters transferred to stock.Quality rate: percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the presses.Scrap rate: percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stock.Productivity: ratio between the square meters transferred to stock and the total hours worked in the plant.Innovation rate: ratio between square meters sold belonging to series designed in the last three years and total square meters sold. Florim uses this indicator to assess the effectiveness of its design process in terms of sales.Coverage: percentage ratio between square meters available for immediate shipment and the square meters on order.

Total portfolio available for shipment in 1 month (%): percentage ratio between the square meters which can be shipped in 30 days and the square meters on order.Obsolete stock: percentage ratio between the square meters of substandard / discontinued produce and the total square meters in stock.Stock turnover rate: ratio between the square meters sold and the square meters in stock.Square meters affected by complaints: percentage ratio between the square meters affected by complaints and the square meters sold.Complaints by number of order items: percentage ratio between the number of complaints and the number of items ordered.Employee turnover: percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year.

Management system

ISO 9001 certification of the quality management system

The current ISO 9001 standards define quality as the ability to satisfy explicit or implicit needs via a product or a service. A Quality System implies constant improvement of company processes in order to realize products that satisfy the customer's needs. Further to the recent audit (2016 for Italy and 2018 for USA), Florim obtained the renewal of its EN ISO 9001:2015 certification for the design, manufacture and sale of all categories of ceramic tile.

AEO CertificationIn addition to the various process certifications obtained by the production locations with regard to quality, the environment and safety, Florim also holds the coveted AEO – Authorized Economic Operator - certification.Further to a lengthy and demanding audit process by the Customs Authorities, in 2016 Florim was awarded AEO certification, the first ceramics manufacturer in the Province of Modena to receive this major form of approval. Authorized Economic Operator status guarantees the company's absolute compliance with customs and security requirements in its foreign trade. This certification, initially valid for 3 years, has already been renewed until 2022. The European Commission is also planning to introduce the figure of the Certified Taxable Person (CTP), a taxpayer recognized as reliable by definition by the tax authorities of all European Union Member States. All organizations which already hold AEO certification automatically meet the criteria for the award of CTP status and will be able to benefit from a number of simplifying regulations. Florim is thinking of its next step: the in-house performance of customs clearance procedures.


The supply chain

FREIGHT

PRODUCTIONAND PROCESSING

RESEARCH

USE

RAW MATERIALS

WATERSANDCLAY

FELDSPARS

FREIGHT

100% WATER RECYCLING

100% GREENWARE WASTE RECYCLING

78% IN-HOUSE ENERGY PRODUCTION

FLOOR COVERINGWALL COVERING

FURNISHINGS/INTERIOR DESIGN

STORAGE GRINDING ATOMIZATION

PRESSING

DRYING

GLAZINGFIRING

PACKAGING

FINISHEDPRODUCT


As part of the reporting processes, a survey of the level of sustainability of the company's chief suppliers was conducted. The aim is to involve the whole supply chain, with the objectives of analysis and improvement, in order to develop a product value chain more and more aware of the various issues monitored: economic, social and environmental.For this purpose, 43 suppliers were involved by means of a questionnaire intended to collect the essential data needed to assess both knowledge of the evaluation and implementation activities adopted by the supplier (certifications and tools for monitoring its performances) and the corporate social responsibility actions undertaken by Florim. This assessment and discussion process will not end with this year, and is intended to encourage a more effective exchange of knowledge between the company and its suppliers; it is also hoped to trigger a mechanism of greater knowledge and mutual encouragement in sustainability reporting practices.The survey's first finding is that 44% of Florim's suppliers have adopted a Code of Ethics, and almost 60% of these update it at least every two years. What's more, 40% of the companies interviewed implement a form of social, environmental and economic reporting. Specifically 35% of them produce a Sustainability Report or Integrated Report, 30% hold Environmental Certifications and 20% Social Certifications, and the other 15% other forms of certification.The survey also set out to verify suppliers' knowledge of the sustainability reporting activities undertaken by Florim. It emerged that more than 56% of suppliers are familiar with the company's Sustainability Report and 42% are also aware of the individual projects which it promotes, the best known including the Premio Lucchese, the activities of the Health&Training Center and environmental and energy impact reduction projects. On the basis of this initial study, it will be possible to plan a process of information exchange and growth amongst the supply chain members, with the aim of the "constant improvement" that is the underlying philosophy of the method used for this reporting, the Global Reporting Initiative Standard guidelines.

Survey of Florim suppliers' sustainability level

SUPPLIER BY TYPE OF PRODUCT OR SERVICE

Machinery 23.2%

Abrasives/treatments 18.6%

Bulk raw materials 18.6%

Paint/glaze manufacturers 11.6%

Packaging 9.3%

Services 9.3%

Chemicals and extraction systems 4.7%

Electrical systems 4.7%

FLORIM SUSTAINABILITY PROJECTS BEST KNOWN TO SUPPLIERS

Premio Lucchese 30%

Health&Training Center 30%

Projects intended to reduce environmental footprint 30%

Cultural events and activities at Florim 25%

Master in Florim 23%

Employee welfare 16%

Art and beauty awareness 7%

Activities and giving by the Fondazione 7%

KNOWLEDGE OF THE SUSTAINABILITY REPORT

Percentage of suppliers familiar with the Florim

Sustainability Report: 56%

ENVIRONMENTAL, SOCIAL AND ECONOMIC SUSTAINABILITYREPORTING TOOLS USED

Other certifications 15%

Sustainability/Integrated Report 35%

Environmental certifications 30%

Social certifications20%

SUPPLIERS WITH CODE OF ETHICS

Percentage of suppliers who have adopteda Code of Ethics: 44%

(60% of whom update it at least every two years).


_Ceramics as interior design feature


OUR COMMITMENTS

The promises we keptIn our last Sustainability Report, we committed to achieving a large number of objectives; the following are the outcomes we attained:

Economic Responsibility

Environmental Responsibility

Social Responsibility

Construction of a new Industry 4.0 factory at Fiorano for large slab processing and logistics

Construction of 2 roundabouts to improve traffic flows in Fiorano NOT ACHIEVED

Installation of whole tile polishing machines and other surface treatment equipment in the Fiorano factoryLaunch of the Florim HUB project, also including a new CRM and Marketing Automation system for the Fiorano headquarters departmentsContinuation of implementation of the “supplier portal” online project for the digital, automated management of purchase orders

Unification of the sales organization for multibrand management of the sales order cycle

Start of refurbishment of the Mordano office and shipping department building NOT ACHIEVED

Installation of a new kiln in the Mordano Industry 4.0 factory

Modernization of the glaze grinding department at Mordano with energy-saving plants connected to innovative software

New finished product store in the American factory NOT ACHIEVED

Rebranding operation for the American brand

Construction of a new 4MWp photovoltaic system at Fiorano

Installation of an industrial sludge recovery and reuse plant at Mordano

Continuation of replacement of the diesel forklift trucks with electric vehicles for use in indoor and outdoor areas at Mordano and FioranoExtension of the use of software for the computerized logging of maintenance work in the production departments at Mordano and Fiorano

Continuation of in-house training in the environment and safety at Mordano and Fiorano

Increase of recycling targets through constant awareness-raising amongst all staff and optimization of recycling facilities at Mordano and FioranoConstruction of an underground tank for the low energy storage of industrial wastewater at Mordano

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees' needs throughout the companyAdoption of the new European Personal Data Protection Regulation - GDPR (General Data Protection Regulation) Continuation of the health meetings for the local community in association with Ospedale di Sassuolo S.p.A.

Organization of new community events at Florim Gallery

Organization of a new event for Florim employees: The 2019 Christmas Party

Installation of two new defibrillators at the new Industry 4.0 factories at Fiorano and Mordano


The targets we set ourselvesWe aim to achieve the following objectives in 2019:

Economic area

Opening of a new Florim Flagship Store in Frankfurt

Opening of a new Florim Flagship Store in Singapore

Adoption of the new SAP S/4HANA business suite in Italy

Introduction of the new SAP S/4HANA business suite in the USA

Introduction of new vertical warehouses for the management of spare parts in the Mordano factories

Renovation of the administrative office building at the Clarksville location

Environment and safety area

Commissioning of the 26,000 m² of photovoltaic panels installed in the new Fiorano plant

Installation of control software for the LED lights at the new Fiorano plant

Creation of a new internal traffic network at the Florim headquarters and implementation of a tag system for pedestrian detection in the logistics area

At Fiorano, connection to the agricultural-industrial water main

Installation of a new post-combustion system with regenerative heat recovery at the Mordano location

Replacement of the Diesel vehicles used for handling materials at the Italian locations with electric vehicles

Introduction of new energy data analysis software in the Italian factories

New measures at the Italian factories to comply with the new ISO 45001 standard, which supersedes OHSAS 18001

Continuation of in-house training on the environment, energy and safety at the three locations

Achievement of ISO 14001 certification also at the USA location

Social area

Continuation of the “Officina delle Idee” project with realization of the winning idea

Launch of the “B. diritto alla bellezza” [B. right to beauty] project

Support for the realization of an innovative bilingual school with 3.0 teaching in the Modena area

Organization of a corporate welfare plan for the Mordano location

Hosting of new health promotion events organized in association with Sassuolo Hospital

Support for the realization of the new Vidas Casa Sollievo Bimbi children's hospice


CommunicationThe Communication Department is organized into three main areas (press - digital - external events) tasked with the transparent delivery of information to the various relevant stakeholders, both internal (employees) and external (press, architects/designers, suppliers, etc.). The three main areas work in synergy, cooperating on various issues and contents in order to put the company's messages across using multiple channels: digital and paper press, corporate website, social media channels, Intranet, etc.

Press office

36 press releases, covering both corporate issues and/or products

1,077 publications in Italian and international journals and/or online publications

462 corporate publications focusing mainly on social and corporate responsibility

234 Intranet news items

Digital

200,000 emails sent in the form of newsletters and event invitations

More than 1,260,000 website sessions (70% from search engines)

+ 122% Instagram followers

+ 69% LinkedIn followers

+ 18% Pinterest followers

+ 81% Facebook followers

1,037 posts on the 5 main social media channels (Instagram, LinkedIn, Facebook, Pinterest and WeChat)

More than 3,300,000 organic social media impressions

Events

• Art&Design (7 February, Valencia)

• Salone del Mobile (17-22 April, Milan)

• Ambienti (25 May-7 July, Venice)

• Guggenheim Intrapresæ Event (5-6 July, 22 June, Fiorano and Venice)

• Buon Natale Achille (11 December, Milan)

The 2018 figures


Your assessment

You are kindly requested to take a few minutes of your time to give us your assessment and any suggestions, to enable us to improve future editions of our Sustainability Report.

Click here to send us your opinion.

To keep up to date with our business:

www.florim.com

Florim USA headquarters | Clarksville, Tennessee

For any further information, please feel free to contact our communications department: [email protected]

www.milestonetiles.com

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Milestone

MilestoneTiles

Milestone_tiles

FLORIM USA

Florimusa

https://docs.google.com/forms/d/e/1FAIpQLSe8vznX-X8ECwU6IXIBJ7PhckAButZMJauJSNtAbtLJopRtsA/viewform

https://www.florim.com/

mailto:comunicazione%40florim.com?subject=

https://www.milestonetiles.com/en/about/

https://www.youtube.com/user/FlorimCeramiche

https://it-it.facebook.com/Florim4Architects/

https://www.instagram.com/florim_ceramiche/

https://www.linkedin.com/company/florim-s-p-a/

https://www.pinterest.it/florim/

https://www.youtube.com/channel/UCydZ9D-cFngWbzVJEtZBcvA

https://www.facebook.com/MilestoneTile/

https://www.instagram.com/milestone_tiles/

https://www.linkedin.com/company/florim-usa/

https://www.pinterest.it/florimusa/


GRI CONTENT INDEX

General indicators Pages of reference

102-1 Name of the organization 9

102-2 Activities and services 9 , 10

102-3 Location of headquarters 9

102-4 Location of operations 9

102-5 Legal form of organization 13 , 14

102-6 Markets served 9, 10

102-7 Scale of the organization 8 , 20

102-8 Information on employees and other workers 13, 35, 36

102-9 Supply chain 50

102-10 Significant changes to the organization none

102-11 Precautionary principle or approach 18

102-12External initiatives of an economic, social and environmental nature in which the organization is involved

38, 39, 40, 41, 42, 43, 44, 45, 46

102-13 Membership of industry or other associations 41

Strategy

102-14 Statement from the most senior decision-maker of the organization 5

Ethics and integ-rity

102-16 Values, principles, standards and norms of behavior 12

Governance

102-18 Governance structure 13, 14

Stakeholder engagement

102-40 List of stakeholders 15, 16

102-41 Collective bargaining agreements 35, 36

102-42 Identifying and selecting stakeholders 15, 16

102-43 Approach to shareholder engagement 15, 16

102-44 Key topics and concerns raised by stakeholders none

102-45 Entities included in the consolidated financial statements 20, 22

102-46 Defining report content and topic boundaries 6, 16

102-47 List of material topics 16

102-48 Restatements of information 6

102-49 Changes in reporting 6

102-50 Reporting period 6

102-51 Date of most recent report 2018 April

102-52 Reporting cycle annual

102-53 Contacts 56

102-54 Claims of reporting in accordance with the GRI Standards 6

102-55 External assurance not certified

GRI management approach

103-1 Explanation of the material topics and their boundaries 6 and 16

103-2 Management approach to material topics 21, 22, 25, 34

103-3 Evaluation of the management approach 21, 22, 25, 34


Specific indicators

201-1 Economic performance indicators 20 and 22

301-1 Materials used by weight and volume 26, 28, 45

301-2 Recycled input materials used 26, 29

302-1 Energy consumption within the organization 26, 30

303-1 Water consumption within the organization 28

304-1Operational sites managed adjacent to protected areas and areas of high biodiversity value

29

305-1 Direct (Scope 1) GHG emissions 32

305-2 Indirect (Scope 2) GHG emissions 32

307-1 Non-compliance with environmental laws and regulationsno non-compliance occurred

308-1 Supplier environmental assessment 308

401-1 New employee hires and employee turnover 36

403-1 Occupational health and safety 38

403-3 Medical services in the workplace 38

403-5 Worker training on occupational health and safety 37 and 38

403-6 Promotion of worker health 42 and 34

404-1 Training 37

405-1 Diversity and equal opportunities in governing bodies and employees 13 and 35

406-1 incidents of discrimination none

413-1 Operations with local community engagement 41, 42, 43

414-1 New suppliers that were screened using social criteria 51

416-1Assessment of the health and safety impacts of product and service categories

47, 49

417-1 Marketing and labelling 29, 46, 47

418-1Substantiated complaints concerning breaches of customer privacy and losses of customer data

none

419-1Non-compliance with laws and regulations in the social and economic area

none


DISCOVER THE FUTURE | Cersaie 2018 event | inauguration of the new Industry 4.0 factory (Fiorano Modenese - Modena)

DESIGN IS OUR PASSION | Florim event at the opera house in Valencia (Spain)

AMBIENTI | Florim event at the Peggy Guggenheim collection (Venice)


FLORIM CHRISTMAS PARTY | Event for employees at Florim Gallery (Fiorano Modenese - Modena)

IL BUON CIBO ITALIANO | One of the health meetings hosted at Florim Gallery (Fiorano Modenese (Modena)

IL NOVECENTO | Event with art historian Vittorio Sgarbi at Florim Gallery (Fiorano Modenese - Modena)


LEZIONI DI PACE | Social awareness event with Hafez Haidar (Fiorano Modenese - Modena)

MODENA 100 ORE | Event hosted at Florim Gallery (Fiorano Modenese - Modena)

PREMIO LUCCHESE | 31st edition of the Premio Lucchese at Florim Gallery (Fiorano Modenese - Modena)

Cover: north-west and north sides of the new Fiorano Modenese (Modena) plant


Florim Ceramiche S.p.A.Via Canaletto, 24 - 41042 Fiorano Modenese (Modena, Italy) - Tel. +39 0536 840111 - www.florim.com

11 - florim · 8 2018 sustainability report giovanni lucchese pioneers the production of extruded...

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