Italian Sustainability Week 2020 di Borsa Italiana - Intervista a ALDO FUMAGALLI ROMARIO

Yes, I would say that Borsa Italiana has made an excellent choice in focusing these meetings on the theme of presenting companies to the investor community but with a sustainable growth perspective, clearly a 360‑degree view. So not only environmental sustainability, but everyone now takes for granted that when we talk about sustainability we also talk about the need for sustainability of society, economic development, the company, and how the company relates to the territory and all stakeholders. We have noticed that both Italian and foreign investors — and I am also happy about Italian investors, because perhaps in the Anglo‑Saxon world this attention to sustainability started earlier — but today all Italian investors are increasingly sensitive. So it is a pleasure as a company to better tell our story under this light of how we interpret sustainability in the company and what we do to try to be more sustainable. As SOL, I would say we have it in our DNA. We have been compiling a sustainability report for more than ten years; by the way, I was also president of the Sustainable Development Commission of Confindustria in the first decade of the 2000s. So it is a topic that concerns not only me but all of our 4,500 collaborators in 29 countries. We had 4,320, but we are growing, also because of many acquisitions in 2019. Indeed, part of the increase in our personnel is due to acquisitions, but net of acquisitions we grew by 3% year‑on‑year. I would also say that this is another sign of our company's sustainability: I am proud that in the last 30 years our group has not only increased the number of its collaborators every year, both women and men, but has also increased them in Italy. We are proud to be an Italian company with our heart and brain; our headquarters is in Italy. We have only 1,300 collaborators in Italy, the rest are in the world. But the international growth of the group, which is certainly still strong, also drives the growth of our collaborators in Italy.

Because we wrote that letter logically in preparation for the annual report in March. We remember well what was happening in Italy in March, in Lombardy, in Bergamo, Brescia, and many areas hit hard by the pandemic. Our employees were present every day in hospitals, present in our plants that never stopped. We didn't have a single plant that shut down during those months except in India, because the lockdown in India was truly harsh and still is. Otherwise our plants continued to produce, among other things, medical oxygen, which is a drug for hospitals. Our nurses and technical employees continued to go to patients' homes. We have 500,000 patients in the countries where we operate with home care. We go to their homes to provide life‑saving services: oxygen therapy certainly, but also many other services, and we cannot interrupt. So often our employees came into contact with people, hospital wards, equipment like cylinders that were potentially infected. Knowing that our people never once reduced their work, never said 'I'm afraid, I refuse because it's too risky', but on the contrary felt part of helping the country, of a social responsibility. It was very beautiful, very strong, and it was right to thank them. In Italy, to give a number: out of 1,300 people, 660 continued to work every day, because they were more exposed for the reasons I said, and often worked 24/7, including weekends when cylinders needed to be delivered to Bergamo, Brescia, and hospitals regardless of hours. The other 550 were in smart working, but they too wanted to be present in rotation at our offices to help coordinate back‑office support.

We also had the issue of all our employees abroad: what was happening in Italy in March was not known in European countries. They saw shocking images and numbers in the newspapers, but it seemed like an Italian problem. We knew well that it would become their problem too, so we had to, on one hand, make all our foreign colleagues understand that in Italy we were continuing to work and doing our job well, and that we wanted them to prepare as best they could because they would likely face similar situations. And so it was. We created not only a crisis committee in Italy on February 24, but a few days later we also created a crisis committee in every foreign company, with a coordination committee. This was also very beautiful because the exchange of help, support, and experiences allowed us to develop very rapid procedures to interface with our patients and institutions in all countries, contributing socially, I believe, to reducing the worst effects of COVID in countries outside Italy. Italy, in this sense, was a bit of a guinea pig, but the experience of Italy helped many others to be less affected.

I believe this depends on the fact that the company is a healthy company, first of all, but above all that it has found a way to express itself that looks to the medium‑long term, to the sustainability also of its own economic development over time. For 30 years we have increased our revenues every year, even in 2009‑2010, probably also this year. I have even dared to say that in 2020 we will have an increase in revenue compared to 2019, while maintaining profitability with growth trends consistent with revenue growth. We always keep a close watch on our financial position. We try to do as our parents taught us: it's a family company that went public, but I am the grandson; the Annoni family founded the company in '27, my father, my uncle, and two sons together carried forward the strong development of the company as second generation. Now five of us from the third generation work in the company. They taught us to go forward having in mind a Latin word: 'paulatim' (little by little), step by step, never take a step longer than your leg. This principle is also the basis of good results, the ability to generate value over the long term, resilience, and the ability to respond to the needs of stakeholders, which are our shareholders, our collaborators because if you grow as collaborators it means more families can benefit from opportunities and have the right reward for their work. Then we have the fortune and beauty that in our work we often interact with people who suffer, both in the hospital side and especially in home care. We enter the homes of 500,000 people every day who have big problems and we help them. This makes the work even more gratifying, feeling protagonists in making people's and families' lives more sustainable.

Absolutely yes. It was born at the end of the 1980s as long‑term oxygen therapy, because a disease was discovered: chronic obstructive pulmonary disease (COPD), for which you could die in a few months unless you could breathe oxygen for at least 15 hours a day. But you couldn't stay at home tied to a 60 kg cylinder; otherwise life ended there. Then technology came to the rescue and allowed liquid oxygen to be put in portable containers like thermoses that can be carried over the shoulder. With these devices inside, a person can breathe oxygen for 7‑8‑9 hours and walk around. At home there are larger units where they can refill. That was the beginning, but then we expanded to bring other respiratory services to patients. For example, people whose lungs can no longer breathe due to damage or terrible diseases like ALS need external respiratory support. So we install mechanical ventilators, provide maintenance, help the family. Another therapy is for sleep apnea. Then we expanded to other services like enteral and parenteral nutrition for people who cannot eat by mouth, and more complex care like palliative care and pain therapy, integrated home care for those with multiple chronic conditions. We try to solve the last‑mile problems to go from doctor, hospital, prescriptions to medications, all in the patient's home.

We invest on average about 16% of our revenue. So if you turn over one billion, that's 160 million per year. Since we turned over 900 million, 16% puts us in good shape. The vast majority of these are investments for organic growth. We also use a part of the resources we generate to make acquisitions or joint ventures around the world. In the last twenty years we have done more than 60 acquisitions or joint ventures, maybe not very large companies, but companies that are doing well and integrate well with us, which embrace our project. Often an entrepreneur comes in with us, continues to work, may sell the majority but continues to grow further with us, maybe more, and creates new value. We try to find collaborators and partners on our path to develop further growth that embrace our projects.