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Sustainability Report 2016 9 th edition

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Page 1: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

SustainabilityReport

2016

9th edition

By Florim Ceramiche spaFinancial Department - supervision

Communications Department - editorial coordinationOur thanks to all contributing staff members

Fiorano Modenese (MO) - ITALY May 2017

Contents

5

6

8

9

9

10

11

13

13

14

14

15

16

17

18

18

19

Letter to Stakeholders

Our Sustainability Report

MADE IN FLORIM

Our History

Our Locations

Our Brands

Our Design Service

Our 2016

GOVERNANCE

Code of Ethics

Management System Policy

Corporate Bodies

Corporate Structure

Stakeholders

Materiality approach

REPORTING

In brief

Economic Responsibility

Comments on the Economic Data

Value Generated

21

22

22

24

27

27

30

32

33

35

36

37

38

40

43

43

44

Environmental Responsibility

Certifications

Environmental Management

Energy Management

Social Responsibility

Employees amp Corporate Welfare

Local Community amp Culture

Product Responsibility

Quality System

OUR COMMITMENTS

The promises we kept

The targets we set for ourselves

FLORIM USA

Profile and Economic Responsibility

Environmental Responsibility

Social Responsibility

Quality System

Other Activities

GRI International Sustainability Indicators SDGs

2016 Sustainability Report4

FLORIM stone Marble Statuario and Stone Black

2016 Sustainability Report 5

Welcome to the ninth edition of our Sustainability Report a document which is gaining wider and wider appreciation amongst those who follow the Florim Grouprsquos performance for its synthesis of the companyrsquos many activities in Corporate Social Responsibilities

During the last year we have once again shown a strong commitment to a business approach which goes beyond the achievement of economic results alone and involves social projectsintended to last over time with the secondary benefit of enhancing the image of the Florim name

I believe this document is a true confirmation that despite uncontrollable global environmental uncertainties there are multiple opportunities to keep the high-quality levels that Florim has always achieved

We have made further large investments in our factories in Italy and in the USA and we will continue to invest in the years to come We have given the same level of importance to investments in ourimage adding new showrooms to those already established in Milan to give visibility to CEDIT the brand which has been rediscovered and relaunched this year with a specific exclusive product range

The ldquoGalleryrdquo and the ldquoHealthampTrainingrdquo Center continue to be hives of activity the company continues to hold its doors wide open to young people with the ldquoMaster in Florimrdquo program and the ldquoFondazione Ing Giovanni Luccheserdquo continues to engage in important charitable work

I am very proud to state that all Florimrsquos employees in Italy and abroad are the companyrsquos greatest resource So I would like to say a well-deserved ldquothank yourdquo to all those whose constant hard work sense of belonging and mutual cooperation represent a priceless assets that consolidate over time

Enjoy the report and thank youClaudio Lucchese

Letter to stakeholders

2016 Sustainability Report6

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 our future goals in an approach based on engagement and continual improvement

Drawn up annually in accordance with the GRI-G4 Guidelines for Sustainability Reports (the G4 edition of the Global Reporting Initiative guidelines) the report issued for the ninth time this year aims to report on the economic environmental and social aspects of the companys operations from a point of view more oriented towards the shared value produced for its stakeholders

The reporting process with in accordance-core compliance level is co-ordinated by Florimrsquos communications department and supervised by the Finance Department with the invaluable assistance of many colleagues especially the staff of the management accounting technical human resources and administration departments The data and information it contains are obtained from the companys IT systems and databases

The Report refers to all the companies in the Florim group on the same principle as the Groups consolidated financial statements The figures provided in the reporting section refer to our Italian location while the fourth section contains a brief Sustainability Report for Florim USA As already stated this Report is intended as an aid to dialogue and therefore the language used is plain and to the point

The 2016 Sustainability Report also published in English will be distributed as follows - provision of a copy to all employees at the Italian and American sites enclosed with their pay stubs- publication of the PDF file on the corporate Intranet and the florimit website- distribution to member companies of the new ldquoAziende Modenesi per la RSIrdquo (Modena companies for social

responsibility) association- mailing to local institutions and the relevant trade union representatives- distribution to the local press and to the specialist press during exhibitions and site visits- distribution to key clients and architects- mailing to the main domestic agenciesauthoritiesassociations involved in issues related to sustainability and the

environment

Florim produciont plant (Fiorano Modenese - MO)

2016 Sustainability Report 7

CEDIT - Storie Collection | Giorgia Zanellato amp Daniele BortottoNamed as Best of the Best at the 2017 Red Dot Design Award

2016 Sustainability Report8

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 fathers 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 todays Florim Solutions is created

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

Florim acquires Casa dolce casa

The Casamood brand is born

A logistics hub is opened in Brazil

The new multifunctional Florim Gallery is opened and the Florim Logistics area is completed at the Florim headquarters The Fondazione Ing Giovanni Lucchese foundation is established

The first Flagship Store is opened in Moscow

The Milan Flagship Store moves to a location in the very heart of the city A new Flagship Store opens in the center of New York

Florim relaunches the historic CEDIT - Ceramiche drsquoItalia brand (which opens its first flagship space in Milan) and FLORIM stone the Groups first brand focusing on the interior design sector

MADE IN FLORIM

Over 50 years of history

Over 1300 employees worldwide

27 million square meters produced every year

406 million Euro turnover

1424 tons of CO2 not emitted in 2015 thanks to the photovoltaic system

It takes more than figures to define a company Today passion innovation a constant commitment to improvement and corporate social responsibility are the core values of a new way of doing businessthe MADE IN FLORIM way

Our History 1962

1967

1976

1981

1984

1990

1992

1994

1995

2000

2005

2006

2011

2013

2014

2015

2016

Watch the Floriminstitutional video

2016 Sustainability Report 9

Our Locations The map shows the grouprsquos headquarters showrooms production plants and logistic hubsFlorim brand products are available from top international customers and importers

Our Brands

Floor Gres is the brand specifically for innovative architectural projects The Floor Gres product range meets all the many and varied needs of contemporary architecture in terms of design and technical capabilities and environmental standards

Rex is the brand which denotes stylistic excellence with products inspired by precious natural materials (wood marble and stone) coordinated floor and wall coverings in which the surfaces interact to generate a new language in home design

Cerim is the brand that focuses primarily on color and on decoration Coverings designed on an integral basis to make the most of all parts of the home and offer solutions that adapt to the most diverse interior design contexts

Casa dolce casa and Casamood is the brand intended for high-end architecture and interior design and offers attractively blended colours and surfaces drawn from nature for the creation of warm interiors A range of matching colours and surfaces that combines porcelain stoneware with other types of materials Architectural design effects are blended with the language of interior decoration to create new types of relationships

CEDIT - Ceramiche drsquoItalia embodies the dialogue between art craftsmanship and technology The brand that shapes ceramic matter in the service of creativity allowing leading names of our time to express themselves to their full potential Large designer slabs that renew the concept of architectural space

FLORIM stone is the brand that combines performance and practicality with the utmost personalization of spaces Large porcelain stoneware slabs at the service of interior design professionals delivering creative flexibility with outstanding technical performances and appearance values

Florim USA is the brand of the American subsidiary its porcelain stoneware tiles for residential and commercial use manufactured in the plant at Clarksville (Tennessee) are tailored to suit the tastes of the largest possible segment of the North American market

FLORIM USASite production plant and logistics hubClarksville TN (USA)

Flagship StoreNew York NY (USA)

Logistics hubParanagrave (BRAZIL)

OceSingapore (SINGAPORE)

Flagship StoreMoscow (RUSSIA)

Site production plant and logistics hubFiorano Modenese (Modena ITALY)Production plantMordano (Bologna ITALY)

- Flagship Store- Spazio CEDITMilan (ITALY)

2016 Sustainability Report10

Our Design ServiceAs well as the product itself Florim offers a unique level of 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 skills and experience whenever the style and performance of porcelain tiles become fundamental to the project In the age of speed and the digital revolution the company has also created an integrated web platform to give its professional partners unbeatable service Exclusive events visibility for projects free training meetings and specific competitions are just some of the services offered by Florim4Architectscom

Expo Azerbajan Pavilion winner of the Florim4Architects ldquoProject of the Yearrdquo competition

2016 Sustainability Report 11

Our 2016In this section we focus on the latest news from the Group covering a wide variety of aspects but all confirming the importance of Florims large slabs and once again underlining the centrality of innovation for the companys business

New brands

In April Florim chose the Salone Internazionale del Mobile a major event for the global design community for the relaunch of the CEDIT - Ceramiche drsquoItalia brand The brand which has always had links with leading artists designers and architects has achieved a superlative creative standard over more than fifty years of experimentation with materials and stylistic research in ceramic design CEDIT is returning to the forefront of Italian manufacturing in partnership with some of contemporary Italys top creative names Its new identity is a fine blend of Craftsmanship and Innovation expressed on the large slabs produced by Florim technology December saw the official opening - in the heart of Milan - of the first Spazio CEDIT the tangible expression of an innovative display concept created to convey the brands philosophy to the world

The brand created to explore new application solutions reaching beyond the conventional construction concept is called FLORIM stone Launched at Cersaie - the biggest ceramics industry show - this brand combines the outstanding performances of porcelain stoneware with the utmost personalisation of spaces The dimensional and functional plus factors of latest-generation large slabs allow stoneware to be used in a versatile customized way not just as a wall and floor covering but also for tops and furnishings (tables kitchen worktops and bathroom counters doors and fireplaces are just some of the possible applications)

New look

A busy year partly due to the refurbishment of the Fiorano Modenese headquarters As well as the new gatehouse the faccedilade of the office building was also restyled bringing it up to date with an all-white lookAn innovative modification at the technological state of the art was made to the raw material shed with a ventilated faccedilade of almost 1900 msup2 of Magnum Oversize large slabs The installation reproduces the ldquoArcheologierdquo collection (designed by artist Franco Guerzoni for CEDIT) and the lake of Vernago in Italys Alto Adige region (photo by Vanni Borghi) A latest-generation project leading the way in technology safety and maintenanceLast but not least a new barrier was also designed and constructed to separate the Florim property from the SFrancesco road It took 3 months to erect a boundary fence of about 340 meters of double-sided porcelain stoneware slabs 180 cm high and 265 cm wide supported by a steel frame With a total of 1122 slabs the fence was designed to withstand weather earthquakes and the forces generated by traffic passing at high speeds Installed at different angles the slabs create attractive effects with light and shade demonstrating the importance of sophisticated aesthetics to the companys identity

New Awards

Florims large slabs are the featured products in the various awards received and have been assigned one of the most important accolades in the design world with an Honourable Mention at the XXIV edition of the ADI Compasso drsquoOro awards

Just a few months after its launch the CEDIT brand also received major awards at the global level the NYCxDESIGN Award in New York the Hospitality Design Awards in New York ldquo100 Best of 2016rdquo at the Archiproducts Design Awards 2016 and the Best of the Best (April 2017) in the Design Product category at the coveted German Red Dot Design Award

More recognition came from the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master in Florim project which aims to give young people the skills required for sustainable development

Learn moreabout CEDIT

Learn moreabout FLORIM stone

2016 Sustainability Report12

In the age of digital transformation Florim still believes in the importance of creating opportunities for meeting and exchanging ideas and in 2016 more than 12000 people came to the Florim Gallery (a multi-purpose space of 9000 msup2 at the Fiorano headquarters) Events of social usefulness workshops community projects and business occasions our training events and hospitality staff were busy on many different fronts It was also a major year for off-site events The Florim Flagship Store in Milan and the just-opened New York Flagship Store hosted more than 3200 people at events for architects and designers supported with important partnerships with POLIdesign and leading publishersFlorim also chose the world-famous Peggy Guggenheim Collection in Venice as the location for two exclusive events to highlight the partnership agreement signed with Guggenheim Intrapresaelig A dinner in the wonderful setting of the museums panoramic terrace followed speeches by distinguished guests Ettore Mocchetti Martino Gamper Domitilla Dardi Giorgia Zanellato Daniele Bortotto Franco Guerzoni and Benedetto Fasciana The final event of the year was held for the employees with a ldquoWhite Christmas Partyrdquo evening at a Florim Gallery decorated for the festive season

A year of Florim events

LrsquoArte del Design - Florim event at the Peggy Guggenheim Collection (Venice)

2016 Sustainability Report

View the Florim eventat the Guggenheim

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 2: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

By Florim Ceramiche spaFinancial Department - supervision

Communications Department - editorial coordinationOur thanks to all contributing staff members

Fiorano Modenese (MO) - ITALY May 2017

Contents

5

6

8

9

9

10

11

13

13

14

14

15

16

17

18

18

19

Letter to Stakeholders

Our Sustainability Report

MADE IN FLORIM

Our History

Our Locations

Our Brands

Our Design Service

Our 2016

GOVERNANCE

Code of Ethics

Management System Policy

Corporate Bodies

Corporate Structure

Stakeholders

Materiality approach

REPORTING

In brief

Economic Responsibility

Comments on the Economic Data

Value Generated

21

22

22

24

27

27

30

32

33

35

36

37

38

40

43

43

44

Environmental Responsibility

Certifications

Environmental Management

Energy Management

Social Responsibility

Employees amp Corporate Welfare

Local Community amp Culture

Product Responsibility

Quality System

OUR COMMITMENTS

The promises we kept

The targets we set for ourselves

FLORIM USA

Profile and Economic Responsibility

Environmental Responsibility

Social Responsibility

Quality System

Other Activities

GRI International Sustainability Indicators SDGs

2016 Sustainability Report4

FLORIM stone Marble Statuario and Stone Black

2016 Sustainability Report 5

Welcome to the ninth edition of our Sustainability Report a document which is gaining wider and wider appreciation amongst those who follow the Florim Grouprsquos performance for its synthesis of the companyrsquos many activities in Corporate Social Responsibilities

During the last year we have once again shown a strong commitment to a business approach which goes beyond the achievement of economic results alone and involves social projectsintended to last over time with the secondary benefit of enhancing the image of the Florim name

I believe this document is a true confirmation that despite uncontrollable global environmental uncertainties there are multiple opportunities to keep the high-quality levels that Florim has always achieved

We have made further large investments in our factories in Italy and in the USA and we will continue to invest in the years to come We have given the same level of importance to investments in ourimage adding new showrooms to those already established in Milan to give visibility to CEDIT the brand which has been rediscovered and relaunched this year with a specific exclusive product range

The ldquoGalleryrdquo and the ldquoHealthampTrainingrdquo Center continue to be hives of activity the company continues to hold its doors wide open to young people with the ldquoMaster in Florimrdquo program and the ldquoFondazione Ing Giovanni Luccheserdquo continues to engage in important charitable work

I am very proud to state that all Florimrsquos employees in Italy and abroad are the companyrsquos greatest resource So I would like to say a well-deserved ldquothank yourdquo to all those whose constant hard work sense of belonging and mutual cooperation represent a priceless assets that consolidate over time

Enjoy the report and thank youClaudio Lucchese

Letter to stakeholders

2016 Sustainability Report6

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 our future goals in an approach based on engagement and continual improvement

Drawn up annually in accordance with the GRI-G4 Guidelines for Sustainability Reports (the G4 edition of the Global Reporting Initiative guidelines) the report issued for the ninth time this year aims to report on the economic environmental and social aspects of the companys operations from a point of view more oriented towards the shared value produced for its stakeholders

The reporting process with in accordance-core compliance level is co-ordinated by Florimrsquos communications department and supervised by the Finance Department with the invaluable assistance of many colleagues especially the staff of the management accounting technical human resources and administration departments The data and information it contains are obtained from the companys IT systems and databases

The Report refers to all the companies in the Florim group on the same principle as the Groups consolidated financial statements The figures provided in the reporting section refer to our Italian location while the fourth section contains a brief Sustainability Report for Florim USA As already stated this Report is intended as an aid to dialogue and therefore the language used is plain and to the point

The 2016 Sustainability Report also published in English will be distributed as follows - provision of a copy to all employees at the Italian and American sites enclosed with their pay stubs- publication of the PDF file on the corporate Intranet and the florimit website- distribution to member companies of the new ldquoAziende Modenesi per la RSIrdquo (Modena companies for social

responsibility) association- mailing to local institutions and the relevant trade union representatives- distribution to the local press and to the specialist press during exhibitions and site visits- distribution to key clients and architects- mailing to the main domestic agenciesauthoritiesassociations involved in issues related to sustainability and the

environment

Florim produciont plant (Fiorano Modenese - MO)

2016 Sustainability Report 7

CEDIT - Storie Collection | Giorgia Zanellato amp Daniele BortottoNamed as Best of the Best at the 2017 Red Dot Design Award

2016 Sustainability Report8

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 fathers 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 todays Florim Solutions is created

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

Florim acquires Casa dolce casa

The Casamood brand is born

A logistics hub is opened in Brazil

The new multifunctional Florim Gallery is opened and the Florim Logistics area is completed at the Florim headquarters The Fondazione Ing Giovanni Lucchese foundation is established

The first Flagship Store is opened in Moscow

The Milan Flagship Store moves to a location in the very heart of the city A new Flagship Store opens in the center of New York

Florim relaunches the historic CEDIT - Ceramiche drsquoItalia brand (which opens its first flagship space in Milan) and FLORIM stone the Groups first brand focusing on the interior design sector

MADE IN FLORIM

Over 50 years of history

Over 1300 employees worldwide

27 million square meters produced every year

406 million Euro turnover

1424 tons of CO2 not emitted in 2015 thanks to the photovoltaic system

It takes more than figures to define a company Today passion innovation a constant commitment to improvement and corporate social responsibility are the core values of a new way of doing businessthe MADE IN FLORIM way

Our History 1962

1967

1976

1981

1984

1990

1992

1994

1995

2000

2005

2006

2011

2013

2014

2015

2016

Watch the Floriminstitutional video

2016 Sustainability Report 9

Our Locations The map shows the grouprsquos headquarters showrooms production plants and logistic hubsFlorim brand products are available from top international customers and importers

Our Brands

Floor Gres is the brand specifically for innovative architectural projects The Floor Gres product range meets all the many and varied needs of contemporary architecture in terms of design and technical capabilities and environmental standards

Rex is the brand which denotes stylistic excellence with products inspired by precious natural materials (wood marble and stone) coordinated floor and wall coverings in which the surfaces interact to generate a new language in home design

Cerim is the brand that focuses primarily on color and on decoration Coverings designed on an integral basis to make the most of all parts of the home and offer solutions that adapt to the most diverse interior design contexts

Casa dolce casa and Casamood is the brand intended for high-end architecture and interior design and offers attractively blended colours and surfaces drawn from nature for the creation of warm interiors A range of matching colours and surfaces that combines porcelain stoneware with other types of materials Architectural design effects are blended with the language of interior decoration to create new types of relationships

CEDIT - Ceramiche drsquoItalia embodies the dialogue between art craftsmanship and technology The brand that shapes ceramic matter in the service of creativity allowing leading names of our time to express themselves to their full potential Large designer slabs that renew the concept of architectural space

FLORIM stone is the brand that combines performance and practicality with the utmost personalization of spaces Large porcelain stoneware slabs at the service of interior design professionals delivering creative flexibility with outstanding technical performances and appearance values

Florim USA is the brand of the American subsidiary its porcelain stoneware tiles for residential and commercial use manufactured in the plant at Clarksville (Tennessee) are tailored to suit the tastes of the largest possible segment of the North American market

FLORIM USASite production plant and logistics hubClarksville TN (USA)

Flagship StoreNew York NY (USA)

Logistics hubParanagrave (BRAZIL)

OceSingapore (SINGAPORE)

Flagship StoreMoscow (RUSSIA)

Site production plant and logistics hubFiorano Modenese (Modena ITALY)Production plantMordano (Bologna ITALY)

- Flagship Store- Spazio CEDITMilan (ITALY)

2016 Sustainability Report10

Our Design ServiceAs well as the product itself Florim offers a unique level of 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 skills and experience whenever the style and performance of porcelain tiles become fundamental to the project In the age of speed and the digital revolution the company has also created an integrated web platform to give its professional partners unbeatable service Exclusive events visibility for projects free training meetings and specific competitions are just some of the services offered by Florim4Architectscom

Expo Azerbajan Pavilion winner of the Florim4Architects ldquoProject of the Yearrdquo competition

2016 Sustainability Report 11

Our 2016In this section we focus on the latest news from the Group covering a wide variety of aspects but all confirming the importance of Florims large slabs and once again underlining the centrality of innovation for the companys business

New brands

In April Florim chose the Salone Internazionale del Mobile a major event for the global design community for the relaunch of the CEDIT - Ceramiche drsquoItalia brand The brand which has always had links with leading artists designers and architects has achieved a superlative creative standard over more than fifty years of experimentation with materials and stylistic research in ceramic design CEDIT is returning to the forefront of Italian manufacturing in partnership with some of contemporary Italys top creative names Its new identity is a fine blend of Craftsmanship and Innovation expressed on the large slabs produced by Florim technology December saw the official opening - in the heart of Milan - of the first Spazio CEDIT the tangible expression of an innovative display concept created to convey the brands philosophy to the world

The brand created to explore new application solutions reaching beyond the conventional construction concept is called FLORIM stone Launched at Cersaie - the biggest ceramics industry show - this brand combines the outstanding performances of porcelain stoneware with the utmost personalisation of spaces The dimensional and functional plus factors of latest-generation large slabs allow stoneware to be used in a versatile customized way not just as a wall and floor covering but also for tops and furnishings (tables kitchen worktops and bathroom counters doors and fireplaces are just some of the possible applications)

New look

A busy year partly due to the refurbishment of the Fiorano Modenese headquarters As well as the new gatehouse the faccedilade of the office building was also restyled bringing it up to date with an all-white lookAn innovative modification at the technological state of the art was made to the raw material shed with a ventilated faccedilade of almost 1900 msup2 of Magnum Oversize large slabs The installation reproduces the ldquoArcheologierdquo collection (designed by artist Franco Guerzoni for CEDIT) and the lake of Vernago in Italys Alto Adige region (photo by Vanni Borghi) A latest-generation project leading the way in technology safety and maintenanceLast but not least a new barrier was also designed and constructed to separate the Florim property from the SFrancesco road It took 3 months to erect a boundary fence of about 340 meters of double-sided porcelain stoneware slabs 180 cm high and 265 cm wide supported by a steel frame With a total of 1122 slabs the fence was designed to withstand weather earthquakes and the forces generated by traffic passing at high speeds Installed at different angles the slabs create attractive effects with light and shade demonstrating the importance of sophisticated aesthetics to the companys identity

New Awards

Florims large slabs are the featured products in the various awards received and have been assigned one of the most important accolades in the design world with an Honourable Mention at the XXIV edition of the ADI Compasso drsquoOro awards

Just a few months after its launch the CEDIT brand also received major awards at the global level the NYCxDESIGN Award in New York the Hospitality Design Awards in New York ldquo100 Best of 2016rdquo at the Archiproducts Design Awards 2016 and the Best of the Best (April 2017) in the Design Product category at the coveted German Red Dot Design Award

More recognition came from the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master in Florim project which aims to give young people the skills required for sustainable development

Learn moreabout CEDIT

Learn moreabout FLORIM stone

2016 Sustainability Report12

In the age of digital transformation Florim still believes in the importance of creating opportunities for meeting and exchanging ideas and in 2016 more than 12000 people came to the Florim Gallery (a multi-purpose space of 9000 msup2 at the Fiorano headquarters) Events of social usefulness workshops community projects and business occasions our training events and hospitality staff were busy on many different fronts It was also a major year for off-site events The Florim Flagship Store in Milan and the just-opened New York Flagship Store hosted more than 3200 people at events for architects and designers supported with important partnerships with POLIdesign and leading publishersFlorim also chose the world-famous Peggy Guggenheim Collection in Venice as the location for two exclusive events to highlight the partnership agreement signed with Guggenheim Intrapresaelig A dinner in the wonderful setting of the museums panoramic terrace followed speeches by distinguished guests Ettore Mocchetti Martino Gamper Domitilla Dardi Giorgia Zanellato Daniele Bortotto Franco Guerzoni and Benedetto Fasciana The final event of the year was held for the employees with a ldquoWhite Christmas Partyrdquo evening at a Florim Gallery decorated for the festive season

A year of Florim events

LrsquoArte del Design - Florim event at the Peggy Guggenheim Collection (Venice)

2016 Sustainability Report

View the Florim eventat the Guggenheim

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 3: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

Contents

5

6

8

9

9

10

11

13

13

14

14

15

16

17

18

18

19

Letter to Stakeholders

Our Sustainability Report

MADE IN FLORIM

Our History

Our Locations

Our Brands

Our Design Service

Our 2016

GOVERNANCE

Code of Ethics

Management System Policy

Corporate Bodies

Corporate Structure

Stakeholders

Materiality approach

REPORTING

In brief

Economic Responsibility

Comments on the Economic Data

Value Generated

21

22

22

24

27

27

30

32

33

35

36

37

38

40

43

43

44

Environmental Responsibility

Certifications

Environmental Management

Energy Management

Social Responsibility

Employees amp Corporate Welfare

Local Community amp Culture

Product Responsibility

Quality System

OUR COMMITMENTS

The promises we kept

The targets we set for ourselves

FLORIM USA

Profile and Economic Responsibility

Environmental Responsibility

Social Responsibility

Quality System

Other Activities

GRI International Sustainability Indicators SDGs

2016 Sustainability Report4

FLORIM stone Marble Statuario and Stone Black

2016 Sustainability Report 5

Welcome to the ninth edition of our Sustainability Report a document which is gaining wider and wider appreciation amongst those who follow the Florim Grouprsquos performance for its synthesis of the companyrsquos many activities in Corporate Social Responsibilities

During the last year we have once again shown a strong commitment to a business approach which goes beyond the achievement of economic results alone and involves social projectsintended to last over time with the secondary benefit of enhancing the image of the Florim name

I believe this document is a true confirmation that despite uncontrollable global environmental uncertainties there are multiple opportunities to keep the high-quality levels that Florim has always achieved

We have made further large investments in our factories in Italy and in the USA and we will continue to invest in the years to come We have given the same level of importance to investments in ourimage adding new showrooms to those already established in Milan to give visibility to CEDIT the brand which has been rediscovered and relaunched this year with a specific exclusive product range

The ldquoGalleryrdquo and the ldquoHealthampTrainingrdquo Center continue to be hives of activity the company continues to hold its doors wide open to young people with the ldquoMaster in Florimrdquo program and the ldquoFondazione Ing Giovanni Luccheserdquo continues to engage in important charitable work

I am very proud to state that all Florimrsquos employees in Italy and abroad are the companyrsquos greatest resource So I would like to say a well-deserved ldquothank yourdquo to all those whose constant hard work sense of belonging and mutual cooperation represent a priceless assets that consolidate over time

Enjoy the report and thank youClaudio Lucchese

Letter to stakeholders

2016 Sustainability Report6

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 our future goals in an approach based on engagement and continual improvement

Drawn up annually in accordance with the GRI-G4 Guidelines for Sustainability Reports (the G4 edition of the Global Reporting Initiative guidelines) the report issued for the ninth time this year aims to report on the economic environmental and social aspects of the companys operations from a point of view more oriented towards the shared value produced for its stakeholders

The reporting process with in accordance-core compliance level is co-ordinated by Florimrsquos communications department and supervised by the Finance Department with the invaluable assistance of many colleagues especially the staff of the management accounting technical human resources and administration departments The data and information it contains are obtained from the companys IT systems and databases

The Report refers to all the companies in the Florim group on the same principle as the Groups consolidated financial statements The figures provided in the reporting section refer to our Italian location while the fourth section contains a brief Sustainability Report for Florim USA As already stated this Report is intended as an aid to dialogue and therefore the language used is plain and to the point

The 2016 Sustainability Report also published in English will be distributed as follows - provision of a copy to all employees at the Italian and American sites enclosed with their pay stubs- publication of the PDF file on the corporate Intranet and the florimit website- distribution to member companies of the new ldquoAziende Modenesi per la RSIrdquo (Modena companies for social

responsibility) association- mailing to local institutions and the relevant trade union representatives- distribution to the local press and to the specialist press during exhibitions and site visits- distribution to key clients and architects- mailing to the main domestic agenciesauthoritiesassociations involved in issues related to sustainability and the

environment

Florim produciont plant (Fiorano Modenese - MO)

2016 Sustainability Report 7

CEDIT - Storie Collection | Giorgia Zanellato amp Daniele BortottoNamed as Best of the Best at the 2017 Red Dot Design Award

2016 Sustainability Report8

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 fathers 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 todays Florim Solutions is created

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

Florim acquires Casa dolce casa

The Casamood brand is born

A logistics hub is opened in Brazil

The new multifunctional Florim Gallery is opened and the Florim Logistics area is completed at the Florim headquarters The Fondazione Ing Giovanni Lucchese foundation is established

The first Flagship Store is opened in Moscow

The Milan Flagship Store moves to a location in the very heart of the city A new Flagship Store opens in the center of New York

Florim relaunches the historic CEDIT - Ceramiche drsquoItalia brand (which opens its first flagship space in Milan) and FLORIM stone the Groups first brand focusing on the interior design sector

MADE IN FLORIM

Over 50 years of history

Over 1300 employees worldwide

27 million square meters produced every year

406 million Euro turnover

1424 tons of CO2 not emitted in 2015 thanks to the photovoltaic system

It takes more than figures to define a company Today passion innovation a constant commitment to improvement and corporate social responsibility are the core values of a new way of doing businessthe MADE IN FLORIM way

Our History 1962

1967

1976

1981

1984

1990

1992

1994

1995

2000

2005

2006

2011

2013

2014

2015

2016

Watch the Floriminstitutional video

2016 Sustainability Report 9

Our Locations The map shows the grouprsquos headquarters showrooms production plants and logistic hubsFlorim brand products are available from top international customers and importers

Our Brands

Floor Gres is the brand specifically for innovative architectural projects The Floor Gres product range meets all the many and varied needs of contemporary architecture in terms of design and technical capabilities and environmental standards

Rex is the brand which denotes stylistic excellence with products inspired by precious natural materials (wood marble and stone) coordinated floor and wall coverings in which the surfaces interact to generate a new language in home design

Cerim is the brand that focuses primarily on color and on decoration Coverings designed on an integral basis to make the most of all parts of the home and offer solutions that adapt to the most diverse interior design contexts

Casa dolce casa and Casamood is the brand intended for high-end architecture and interior design and offers attractively blended colours and surfaces drawn from nature for the creation of warm interiors A range of matching colours and surfaces that combines porcelain stoneware with other types of materials Architectural design effects are blended with the language of interior decoration to create new types of relationships

CEDIT - Ceramiche drsquoItalia embodies the dialogue between art craftsmanship and technology The brand that shapes ceramic matter in the service of creativity allowing leading names of our time to express themselves to their full potential Large designer slabs that renew the concept of architectural space

FLORIM stone is the brand that combines performance and practicality with the utmost personalization of spaces Large porcelain stoneware slabs at the service of interior design professionals delivering creative flexibility with outstanding technical performances and appearance values

Florim USA is the brand of the American subsidiary its porcelain stoneware tiles for residential and commercial use manufactured in the plant at Clarksville (Tennessee) are tailored to suit the tastes of the largest possible segment of the North American market

FLORIM USASite production plant and logistics hubClarksville TN (USA)

Flagship StoreNew York NY (USA)

Logistics hubParanagrave (BRAZIL)

OceSingapore (SINGAPORE)

Flagship StoreMoscow (RUSSIA)

Site production plant and logistics hubFiorano Modenese (Modena ITALY)Production plantMordano (Bologna ITALY)

- Flagship Store- Spazio CEDITMilan (ITALY)

2016 Sustainability Report10

Our Design ServiceAs well as the product itself Florim offers a unique level of 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 skills and experience whenever the style and performance of porcelain tiles become fundamental to the project In the age of speed and the digital revolution the company has also created an integrated web platform to give its professional partners unbeatable service Exclusive events visibility for projects free training meetings and specific competitions are just some of the services offered by Florim4Architectscom

Expo Azerbajan Pavilion winner of the Florim4Architects ldquoProject of the Yearrdquo competition

2016 Sustainability Report 11

Our 2016In this section we focus on the latest news from the Group covering a wide variety of aspects but all confirming the importance of Florims large slabs and once again underlining the centrality of innovation for the companys business

New brands

In April Florim chose the Salone Internazionale del Mobile a major event for the global design community for the relaunch of the CEDIT - Ceramiche drsquoItalia brand The brand which has always had links with leading artists designers and architects has achieved a superlative creative standard over more than fifty years of experimentation with materials and stylistic research in ceramic design CEDIT is returning to the forefront of Italian manufacturing in partnership with some of contemporary Italys top creative names Its new identity is a fine blend of Craftsmanship and Innovation expressed on the large slabs produced by Florim technology December saw the official opening - in the heart of Milan - of the first Spazio CEDIT the tangible expression of an innovative display concept created to convey the brands philosophy to the world

The brand created to explore new application solutions reaching beyond the conventional construction concept is called FLORIM stone Launched at Cersaie - the biggest ceramics industry show - this brand combines the outstanding performances of porcelain stoneware with the utmost personalisation of spaces The dimensional and functional plus factors of latest-generation large slabs allow stoneware to be used in a versatile customized way not just as a wall and floor covering but also for tops and furnishings (tables kitchen worktops and bathroom counters doors and fireplaces are just some of the possible applications)

New look

A busy year partly due to the refurbishment of the Fiorano Modenese headquarters As well as the new gatehouse the faccedilade of the office building was also restyled bringing it up to date with an all-white lookAn innovative modification at the technological state of the art was made to the raw material shed with a ventilated faccedilade of almost 1900 msup2 of Magnum Oversize large slabs The installation reproduces the ldquoArcheologierdquo collection (designed by artist Franco Guerzoni for CEDIT) and the lake of Vernago in Italys Alto Adige region (photo by Vanni Borghi) A latest-generation project leading the way in technology safety and maintenanceLast but not least a new barrier was also designed and constructed to separate the Florim property from the SFrancesco road It took 3 months to erect a boundary fence of about 340 meters of double-sided porcelain stoneware slabs 180 cm high and 265 cm wide supported by a steel frame With a total of 1122 slabs the fence was designed to withstand weather earthquakes and the forces generated by traffic passing at high speeds Installed at different angles the slabs create attractive effects with light and shade demonstrating the importance of sophisticated aesthetics to the companys identity

New Awards

Florims large slabs are the featured products in the various awards received and have been assigned one of the most important accolades in the design world with an Honourable Mention at the XXIV edition of the ADI Compasso drsquoOro awards

Just a few months after its launch the CEDIT brand also received major awards at the global level the NYCxDESIGN Award in New York the Hospitality Design Awards in New York ldquo100 Best of 2016rdquo at the Archiproducts Design Awards 2016 and the Best of the Best (April 2017) in the Design Product category at the coveted German Red Dot Design Award

More recognition came from the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master in Florim project which aims to give young people the skills required for sustainable development

Learn moreabout CEDIT

Learn moreabout FLORIM stone

2016 Sustainability Report12

In the age of digital transformation Florim still believes in the importance of creating opportunities for meeting and exchanging ideas and in 2016 more than 12000 people came to the Florim Gallery (a multi-purpose space of 9000 msup2 at the Fiorano headquarters) Events of social usefulness workshops community projects and business occasions our training events and hospitality staff were busy on many different fronts It was also a major year for off-site events The Florim Flagship Store in Milan and the just-opened New York Flagship Store hosted more than 3200 people at events for architects and designers supported with important partnerships with POLIdesign and leading publishersFlorim also chose the world-famous Peggy Guggenheim Collection in Venice as the location for two exclusive events to highlight the partnership agreement signed with Guggenheim Intrapresaelig A dinner in the wonderful setting of the museums panoramic terrace followed speeches by distinguished guests Ettore Mocchetti Martino Gamper Domitilla Dardi Giorgia Zanellato Daniele Bortotto Franco Guerzoni and Benedetto Fasciana The final event of the year was held for the employees with a ldquoWhite Christmas Partyrdquo evening at a Florim Gallery decorated for the festive season

A year of Florim events

LrsquoArte del Design - Florim event at the Peggy Guggenheim Collection (Venice)

2016 Sustainability Report

View the Florim eventat the Guggenheim

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 4: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report4

FLORIM stone Marble Statuario and Stone Black

2016 Sustainability Report 5

Welcome to the ninth edition of our Sustainability Report a document which is gaining wider and wider appreciation amongst those who follow the Florim Grouprsquos performance for its synthesis of the companyrsquos many activities in Corporate Social Responsibilities

During the last year we have once again shown a strong commitment to a business approach which goes beyond the achievement of economic results alone and involves social projectsintended to last over time with the secondary benefit of enhancing the image of the Florim name

I believe this document is a true confirmation that despite uncontrollable global environmental uncertainties there are multiple opportunities to keep the high-quality levels that Florim has always achieved

We have made further large investments in our factories in Italy and in the USA and we will continue to invest in the years to come We have given the same level of importance to investments in ourimage adding new showrooms to those already established in Milan to give visibility to CEDIT the brand which has been rediscovered and relaunched this year with a specific exclusive product range

The ldquoGalleryrdquo and the ldquoHealthampTrainingrdquo Center continue to be hives of activity the company continues to hold its doors wide open to young people with the ldquoMaster in Florimrdquo program and the ldquoFondazione Ing Giovanni Luccheserdquo continues to engage in important charitable work

I am very proud to state that all Florimrsquos employees in Italy and abroad are the companyrsquos greatest resource So I would like to say a well-deserved ldquothank yourdquo to all those whose constant hard work sense of belonging and mutual cooperation represent a priceless assets that consolidate over time

Enjoy the report and thank youClaudio Lucchese

Letter to stakeholders

2016 Sustainability Report6

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 our future goals in an approach based on engagement and continual improvement

Drawn up annually in accordance with the GRI-G4 Guidelines for Sustainability Reports (the G4 edition of the Global Reporting Initiative guidelines) the report issued for the ninth time this year aims to report on the economic environmental and social aspects of the companys operations from a point of view more oriented towards the shared value produced for its stakeholders

The reporting process with in accordance-core compliance level is co-ordinated by Florimrsquos communications department and supervised by the Finance Department with the invaluable assistance of many colleagues especially the staff of the management accounting technical human resources and administration departments The data and information it contains are obtained from the companys IT systems and databases

The Report refers to all the companies in the Florim group on the same principle as the Groups consolidated financial statements The figures provided in the reporting section refer to our Italian location while the fourth section contains a brief Sustainability Report for Florim USA As already stated this Report is intended as an aid to dialogue and therefore the language used is plain and to the point

The 2016 Sustainability Report also published in English will be distributed as follows - provision of a copy to all employees at the Italian and American sites enclosed with their pay stubs- publication of the PDF file on the corporate Intranet and the florimit website- distribution to member companies of the new ldquoAziende Modenesi per la RSIrdquo (Modena companies for social

responsibility) association- mailing to local institutions and the relevant trade union representatives- distribution to the local press and to the specialist press during exhibitions and site visits- distribution to key clients and architects- mailing to the main domestic agenciesauthoritiesassociations involved in issues related to sustainability and the

environment

Florim produciont plant (Fiorano Modenese - MO)

2016 Sustainability Report 7

CEDIT - Storie Collection | Giorgia Zanellato amp Daniele BortottoNamed as Best of the Best at the 2017 Red Dot Design Award

2016 Sustainability Report8

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 fathers 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 todays Florim Solutions is created

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

Florim acquires Casa dolce casa

The Casamood brand is born

A logistics hub is opened in Brazil

The new multifunctional Florim Gallery is opened and the Florim Logistics area is completed at the Florim headquarters The Fondazione Ing Giovanni Lucchese foundation is established

The first Flagship Store is opened in Moscow

The Milan Flagship Store moves to a location in the very heart of the city A new Flagship Store opens in the center of New York

Florim relaunches the historic CEDIT - Ceramiche drsquoItalia brand (which opens its first flagship space in Milan) and FLORIM stone the Groups first brand focusing on the interior design sector

MADE IN FLORIM

Over 50 years of history

Over 1300 employees worldwide

27 million square meters produced every year

406 million Euro turnover

1424 tons of CO2 not emitted in 2015 thanks to the photovoltaic system

It takes more than figures to define a company Today passion innovation a constant commitment to improvement and corporate social responsibility are the core values of a new way of doing businessthe MADE IN FLORIM way

Our History 1962

1967

1976

1981

1984

1990

1992

1994

1995

2000

2005

2006

2011

2013

2014

2015

2016

Watch the Floriminstitutional video

2016 Sustainability Report 9

Our Locations The map shows the grouprsquos headquarters showrooms production plants and logistic hubsFlorim brand products are available from top international customers and importers

Our Brands

Floor Gres is the brand specifically for innovative architectural projects The Floor Gres product range meets all the many and varied needs of contemporary architecture in terms of design and technical capabilities and environmental standards

Rex is the brand which denotes stylistic excellence with products inspired by precious natural materials (wood marble and stone) coordinated floor and wall coverings in which the surfaces interact to generate a new language in home design

Cerim is the brand that focuses primarily on color and on decoration Coverings designed on an integral basis to make the most of all parts of the home and offer solutions that adapt to the most diverse interior design contexts

Casa dolce casa and Casamood is the brand intended for high-end architecture and interior design and offers attractively blended colours and surfaces drawn from nature for the creation of warm interiors A range of matching colours and surfaces that combines porcelain stoneware with other types of materials Architectural design effects are blended with the language of interior decoration to create new types of relationships

CEDIT - Ceramiche drsquoItalia embodies the dialogue between art craftsmanship and technology The brand that shapes ceramic matter in the service of creativity allowing leading names of our time to express themselves to their full potential Large designer slabs that renew the concept of architectural space

FLORIM stone is the brand that combines performance and practicality with the utmost personalization of spaces Large porcelain stoneware slabs at the service of interior design professionals delivering creative flexibility with outstanding technical performances and appearance values

Florim USA is the brand of the American subsidiary its porcelain stoneware tiles for residential and commercial use manufactured in the plant at Clarksville (Tennessee) are tailored to suit the tastes of the largest possible segment of the North American market

FLORIM USASite production plant and logistics hubClarksville TN (USA)

Flagship StoreNew York NY (USA)

Logistics hubParanagrave (BRAZIL)

OceSingapore (SINGAPORE)

Flagship StoreMoscow (RUSSIA)

Site production plant and logistics hubFiorano Modenese (Modena ITALY)Production plantMordano (Bologna ITALY)

- Flagship Store- Spazio CEDITMilan (ITALY)

2016 Sustainability Report10

Our Design ServiceAs well as the product itself Florim offers a unique level of 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 skills and experience whenever the style and performance of porcelain tiles become fundamental to the project In the age of speed and the digital revolution the company has also created an integrated web platform to give its professional partners unbeatable service Exclusive events visibility for projects free training meetings and specific competitions are just some of the services offered by Florim4Architectscom

Expo Azerbajan Pavilion winner of the Florim4Architects ldquoProject of the Yearrdquo competition

2016 Sustainability Report 11

Our 2016In this section we focus on the latest news from the Group covering a wide variety of aspects but all confirming the importance of Florims large slabs and once again underlining the centrality of innovation for the companys business

New brands

In April Florim chose the Salone Internazionale del Mobile a major event for the global design community for the relaunch of the CEDIT - Ceramiche drsquoItalia brand The brand which has always had links with leading artists designers and architects has achieved a superlative creative standard over more than fifty years of experimentation with materials and stylistic research in ceramic design CEDIT is returning to the forefront of Italian manufacturing in partnership with some of contemporary Italys top creative names Its new identity is a fine blend of Craftsmanship and Innovation expressed on the large slabs produced by Florim technology December saw the official opening - in the heart of Milan - of the first Spazio CEDIT the tangible expression of an innovative display concept created to convey the brands philosophy to the world

The brand created to explore new application solutions reaching beyond the conventional construction concept is called FLORIM stone Launched at Cersaie - the biggest ceramics industry show - this brand combines the outstanding performances of porcelain stoneware with the utmost personalisation of spaces The dimensional and functional plus factors of latest-generation large slabs allow stoneware to be used in a versatile customized way not just as a wall and floor covering but also for tops and furnishings (tables kitchen worktops and bathroom counters doors and fireplaces are just some of the possible applications)

New look

A busy year partly due to the refurbishment of the Fiorano Modenese headquarters As well as the new gatehouse the faccedilade of the office building was also restyled bringing it up to date with an all-white lookAn innovative modification at the technological state of the art was made to the raw material shed with a ventilated faccedilade of almost 1900 msup2 of Magnum Oversize large slabs The installation reproduces the ldquoArcheologierdquo collection (designed by artist Franco Guerzoni for CEDIT) and the lake of Vernago in Italys Alto Adige region (photo by Vanni Borghi) A latest-generation project leading the way in technology safety and maintenanceLast but not least a new barrier was also designed and constructed to separate the Florim property from the SFrancesco road It took 3 months to erect a boundary fence of about 340 meters of double-sided porcelain stoneware slabs 180 cm high and 265 cm wide supported by a steel frame With a total of 1122 slabs the fence was designed to withstand weather earthquakes and the forces generated by traffic passing at high speeds Installed at different angles the slabs create attractive effects with light and shade demonstrating the importance of sophisticated aesthetics to the companys identity

New Awards

Florims large slabs are the featured products in the various awards received and have been assigned one of the most important accolades in the design world with an Honourable Mention at the XXIV edition of the ADI Compasso drsquoOro awards

Just a few months after its launch the CEDIT brand also received major awards at the global level the NYCxDESIGN Award in New York the Hospitality Design Awards in New York ldquo100 Best of 2016rdquo at the Archiproducts Design Awards 2016 and the Best of the Best (April 2017) in the Design Product category at the coveted German Red Dot Design Award

More recognition came from the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master in Florim project which aims to give young people the skills required for sustainable development

Learn moreabout CEDIT

Learn moreabout FLORIM stone

2016 Sustainability Report12

In the age of digital transformation Florim still believes in the importance of creating opportunities for meeting and exchanging ideas and in 2016 more than 12000 people came to the Florim Gallery (a multi-purpose space of 9000 msup2 at the Fiorano headquarters) Events of social usefulness workshops community projects and business occasions our training events and hospitality staff were busy on many different fronts It was also a major year for off-site events The Florim Flagship Store in Milan and the just-opened New York Flagship Store hosted more than 3200 people at events for architects and designers supported with important partnerships with POLIdesign and leading publishersFlorim also chose the world-famous Peggy Guggenheim Collection in Venice as the location for two exclusive events to highlight the partnership agreement signed with Guggenheim Intrapresaelig A dinner in the wonderful setting of the museums panoramic terrace followed speeches by distinguished guests Ettore Mocchetti Martino Gamper Domitilla Dardi Giorgia Zanellato Daniele Bortotto Franco Guerzoni and Benedetto Fasciana The final event of the year was held for the employees with a ldquoWhite Christmas Partyrdquo evening at a Florim Gallery decorated for the festive season

A year of Florim events

LrsquoArte del Design - Florim event at the Peggy Guggenheim Collection (Venice)

2016 Sustainability Report

View the Florim eventat the Guggenheim

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 5: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 5

Welcome to the ninth edition of our Sustainability Report a document which is gaining wider and wider appreciation amongst those who follow the Florim Grouprsquos performance for its synthesis of the companyrsquos many activities in Corporate Social Responsibilities

During the last year we have once again shown a strong commitment to a business approach which goes beyond the achievement of economic results alone and involves social projectsintended to last over time with the secondary benefit of enhancing the image of the Florim name

I believe this document is a true confirmation that despite uncontrollable global environmental uncertainties there are multiple opportunities to keep the high-quality levels that Florim has always achieved

We have made further large investments in our factories in Italy and in the USA and we will continue to invest in the years to come We have given the same level of importance to investments in ourimage adding new showrooms to those already established in Milan to give visibility to CEDIT the brand which has been rediscovered and relaunched this year with a specific exclusive product range

The ldquoGalleryrdquo and the ldquoHealthampTrainingrdquo Center continue to be hives of activity the company continues to hold its doors wide open to young people with the ldquoMaster in Florimrdquo program and the ldquoFondazione Ing Giovanni Luccheserdquo continues to engage in important charitable work

I am very proud to state that all Florimrsquos employees in Italy and abroad are the companyrsquos greatest resource So I would like to say a well-deserved ldquothank yourdquo to all those whose constant hard work sense of belonging and mutual cooperation represent a priceless assets that consolidate over time

Enjoy the report and thank youClaudio Lucchese

Letter to stakeholders

2016 Sustainability Report6

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 our future goals in an approach based on engagement and continual improvement

Drawn up annually in accordance with the GRI-G4 Guidelines for Sustainability Reports (the G4 edition of the Global Reporting Initiative guidelines) the report issued for the ninth time this year aims to report on the economic environmental and social aspects of the companys operations from a point of view more oriented towards the shared value produced for its stakeholders

The reporting process with in accordance-core compliance level is co-ordinated by Florimrsquos communications department and supervised by the Finance Department with the invaluable assistance of many colleagues especially the staff of the management accounting technical human resources and administration departments The data and information it contains are obtained from the companys IT systems and databases

The Report refers to all the companies in the Florim group on the same principle as the Groups consolidated financial statements The figures provided in the reporting section refer to our Italian location while the fourth section contains a brief Sustainability Report for Florim USA As already stated this Report is intended as an aid to dialogue and therefore the language used is plain and to the point

The 2016 Sustainability Report also published in English will be distributed as follows - provision of a copy to all employees at the Italian and American sites enclosed with their pay stubs- publication of the PDF file on the corporate Intranet and the florimit website- distribution to member companies of the new ldquoAziende Modenesi per la RSIrdquo (Modena companies for social

responsibility) association- mailing to local institutions and the relevant trade union representatives- distribution to the local press and to the specialist press during exhibitions and site visits- distribution to key clients and architects- mailing to the main domestic agenciesauthoritiesassociations involved in issues related to sustainability and the

environment

Florim produciont plant (Fiorano Modenese - MO)

2016 Sustainability Report 7

CEDIT - Storie Collection | Giorgia Zanellato amp Daniele BortottoNamed as Best of the Best at the 2017 Red Dot Design Award

2016 Sustainability Report8

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 fathers 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 todays Florim Solutions is created

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

Florim acquires Casa dolce casa

The Casamood brand is born

A logistics hub is opened in Brazil

The new multifunctional Florim Gallery is opened and the Florim Logistics area is completed at the Florim headquarters The Fondazione Ing Giovanni Lucchese foundation is established

The first Flagship Store is opened in Moscow

The Milan Flagship Store moves to a location in the very heart of the city A new Flagship Store opens in the center of New York

Florim relaunches the historic CEDIT - Ceramiche drsquoItalia brand (which opens its first flagship space in Milan) and FLORIM stone the Groups first brand focusing on the interior design sector

MADE IN FLORIM

Over 50 years of history

Over 1300 employees worldwide

27 million square meters produced every year

406 million Euro turnover

1424 tons of CO2 not emitted in 2015 thanks to the photovoltaic system

It takes more than figures to define a company Today passion innovation a constant commitment to improvement and corporate social responsibility are the core values of a new way of doing businessthe MADE IN FLORIM way

Our History 1962

1967

1976

1981

1984

1990

1992

1994

1995

2000

2005

2006

2011

2013

2014

2015

2016

Watch the Floriminstitutional video

2016 Sustainability Report 9

Our Locations The map shows the grouprsquos headquarters showrooms production plants and logistic hubsFlorim brand products are available from top international customers and importers

Our Brands

Floor Gres is the brand specifically for innovative architectural projects The Floor Gres product range meets all the many and varied needs of contemporary architecture in terms of design and technical capabilities and environmental standards

Rex is the brand which denotes stylistic excellence with products inspired by precious natural materials (wood marble and stone) coordinated floor and wall coverings in which the surfaces interact to generate a new language in home design

Cerim is the brand that focuses primarily on color and on decoration Coverings designed on an integral basis to make the most of all parts of the home and offer solutions that adapt to the most diverse interior design contexts

Casa dolce casa and Casamood is the brand intended for high-end architecture and interior design and offers attractively blended colours and surfaces drawn from nature for the creation of warm interiors A range of matching colours and surfaces that combines porcelain stoneware with other types of materials Architectural design effects are blended with the language of interior decoration to create new types of relationships

CEDIT - Ceramiche drsquoItalia embodies the dialogue between art craftsmanship and technology The brand that shapes ceramic matter in the service of creativity allowing leading names of our time to express themselves to their full potential Large designer slabs that renew the concept of architectural space

FLORIM stone is the brand that combines performance and practicality with the utmost personalization of spaces Large porcelain stoneware slabs at the service of interior design professionals delivering creative flexibility with outstanding technical performances and appearance values

Florim USA is the brand of the American subsidiary its porcelain stoneware tiles for residential and commercial use manufactured in the plant at Clarksville (Tennessee) are tailored to suit the tastes of the largest possible segment of the North American market

FLORIM USASite production plant and logistics hubClarksville TN (USA)

Flagship StoreNew York NY (USA)

Logistics hubParanagrave (BRAZIL)

OceSingapore (SINGAPORE)

Flagship StoreMoscow (RUSSIA)

Site production plant and logistics hubFiorano Modenese (Modena ITALY)Production plantMordano (Bologna ITALY)

- Flagship Store- Spazio CEDITMilan (ITALY)

2016 Sustainability Report10

Our Design ServiceAs well as the product itself Florim offers a unique level of 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 skills and experience whenever the style and performance of porcelain tiles become fundamental to the project In the age of speed and the digital revolution the company has also created an integrated web platform to give its professional partners unbeatable service Exclusive events visibility for projects free training meetings and specific competitions are just some of the services offered by Florim4Architectscom

Expo Azerbajan Pavilion winner of the Florim4Architects ldquoProject of the Yearrdquo competition

2016 Sustainability Report 11

Our 2016In this section we focus on the latest news from the Group covering a wide variety of aspects but all confirming the importance of Florims large slabs and once again underlining the centrality of innovation for the companys business

New brands

In April Florim chose the Salone Internazionale del Mobile a major event for the global design community for the relaunch of the CEDIT - Ceramiche drsquoItalia brand The brand which has always had links with leading artists designers and architects has achieved a superlative creative standard over more than fifty years of experimentation with materials and stylistic research in ceramic design CEDIT is returning to the forefront of Italian manufacturing in partnership with some of contemporary Italys top creative names Its new identity is a fine blend of Craftsmanship and Innovation expressed on the large slabs produced by Florim technology December saw the official opening - in the heart of Milan - of the first Spazio CEDIT the tangible expression of an innovative display concept created to convey the brands philosophy to the world

The brand created to explore new application solutions reaching beyond the conventional construction concept is called FLORIM stone Launched at Cersaie - the biggest ceramics industry show - this brand combines the outstanding performances of porcelain stoneware with the utmost personalisation of spaces The dimensional and functional plus factors of latest-generation large slabs allow stoneware to be used in a versatile customized way not just as a wall and floor covering but also for tops and furnishings (tables kitchen worktops and bathroom counters doors and fireplaces are just some of the possible applications)

New look

A busy year partly due to the refurbishment of the Fiorano Modenese headquarters As well as the new gatehouse the faccedilade of the office building was also restyled bringing it up to date with an all-white lookAn innovative modification at the technological state of the art was made to the raw material shed with a ventilated faccedilade of almost 1900 msup2 of Magnum Oversize large slabs The installation reproduces the ldquoArcheologierdquo collection (designed by artist Franco Guerzoni for CEDIT) and the lake of Vernago in Italys Alto Adige region (photo by Vanni Borghi) A latest-generation project leading the way in technology safety and maintenanceLast but not least a new barrier was also designed and constructed to separate the Florim property from the SFrancesco road It took 3 months to erect a boundary fence of about 340 meters of double-sided porcelain stoneware slabs 180 cm high and 265 cm wide supported by a steel frame With a total of 1122 slabs the fence was designed to withstand weather earthquakes and the forces generated by traffic passing at high speeds Installed at different angles the slabs create attractive effects with light and shade demonstrating the importance of sophisticated aesthetics to the companys identity

New Awards

Florims large slabs are the featured products in the various awards received and have been assigned one of the most important accolades in the design world with an Honourable Mention at the XXIV edition of the ADI Compasso drsquoOro awards

Just a few months after its launch the CEDIT brand also received major awards at the global level the NYCxDESIGN Award in New York the Hospitality Design Awards in New York ldquo100 Best of 2016rdquo at the Archiproducts Design Awards 2016 and the Best of the Best (April 2017) in the Design Product category at the coveted German Red Dot Design Award

More recognition came from the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master in Florim project which aims to give young people the skills required for sustainable development

Learn moreabout CEDIT

Learn moreabout FLORIM stone

2016 Sustainability Report12

In the age of digital transformation Florim still believes in the importance of creating opportunities for meeting and exchanging ideas and in 2016 more than 12000 people came to the Florim Gallery (a multi-purpose space of 9000 msup2 at the Fiorano headquarters) Events of social usefulness workshops community projects and business occasions our training events and hospitality staff were busy on many different fronts It was also a major year for off-site events The Florim Flagship Store in Milan and the just-opened New York Flagship Store hosted more than 3200 people at events for architects and designers supported with important partnerships with POLIdesign and leading publishersFlorim also chose the world-famous Peggy Guggenheim Collection in Venice as the location for two exclusive events to highlight the partnership agreement signed with Guggenheim Intrapresaelig A dinner in the wonderful setting of the museums panoramic terrace followed speeches by distinguished guests Ettore Mocchetti Martino Gamper Domitilla Dardi Giorgia Zanellato Daniele Bortotto Franco Guerzoni and Benedetto Fasciana The final event of the year was held for the employees with a ldquoWhite Christmas Partyrdquo evening at a Florim Gallery decorated for the festive season

A year of Florim events

LrsquoArte del Design - Florim event at the Peggy Guggenheim Collection (Venice)

2016 Sustainability Report

View the Florim eventat the Guggenheim

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 6: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report6

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 our future goals in an approach based on engagement and continual improvement

Drawn up annually in accordance with the GRI-G4 Guidelines for Sustainability Reports (the G4 edition of the Global Reporting Initiative guidelines) the report issued for the ninth time this year aims to report on the economic environmental and social aspects of the companys operations from a point of view more oriented towards the shared value produced for its stakeholders

The reporting process with in accordance-core compliance level is co-ordinated by Florimrsquos communications department and supervised by the Finance Department with the invaluable assistance of many colleagues especially the staff of the management accounting technical human resources and administration departments The data and information it contains are obtained from the companys IT systems and databases

The Report refers to all the companies in the Florim group on the same principle as the Groups consolidated financial statements The figures provided in the reporting section refer to our Italian location while the fourth section contains a brief Sustainability Report for Florim USA As already stated this Report is intended as an aid to dialogue and therefore the language used is plain and to the point

The 2016 Sustainability Report also published in English will be distributed as follows - provision of a copy to all employees at the Italian and American sites enclosed with their pay stubs- publication of the PDF file on the corporate Intranet and the florimit website- distribution to member companies of the new ldquoAziende Modenesi per la RSIrdquo (Modena companies for social

responsibility) association- mailing to local institutions and the relevant trade union representatives- distribution to the local press and to the specialist press during exhibitions and site visits- distribution to key clients and architects- mailing to the main domestic agenciesauthoritiesassociations involved in issues related to sustainability and the

environment

Florim produciont plant (Fiorano Modenese - MO)

2016 Sustainability Report 7

CEDIT - Storie Collection | Giorgia Zanellato amp Daniele BortottoNamed as Best of the Best at the 2017 Red Dot Design Award

2016 Sustainability Report8

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 fathers 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 todays Florim Solutions is created

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

Florim acquires Casa dolce casa

The Casamood brand is born

A logistics hub is opened in Brazil

The new multifunctional Florim Gallery is opened and the Florim Logistics area is completed at the Florim headquarters The Fondazione Ing Giovanni Lucchese foundation is established

The first Flagship Store is opened in Moscow

The Milan Flagship Store moves to a location in the very heart of the city A new Flagship Store opens in the center of New York

Florim relaunches the historic CEDIT - Ceramiche drsquoItalia brand (which opens its first flagship space in Milan) and FLORIM stone the Groups first brand focusing on the interior design sector

MADE IN FLORIM

Over 50 years of history

Over 1300 employees worldwide

27 million square meters produced every year

406 million Euro turnover

1424 tons of CO2 not emitted in 2015 thanks to the photovoltaic system

It takes more than figures to define a company Today passion innovation a constant commitment to improvement and corporate social responsibility are the core values of a new way of doing businessthe MADE IN FLORIM way

Our History 1962

1967

1976

1981

1984

1990

1992

1994

1995

2000

2005

2006

2011

2013

2014

2015

2016

Watch the Floriminstitutional video

2016 Sustainability Report 9

Our Locations The map shows the grouprsquos headquarters showrooms production plants and logistic hubsFlorim brand products are available from top international customers and importers

Our Brands

Floor Gres is the brand specifically for innovative architectural projects The Floor Gres product range meets all the many and varied needs of contemporary architecture in terms of design and technical capabilities and environmental standards

Rex is the brand which denotes stylistic excellence with products inspired by precious natural materials (wood marble and stone) coordinated floor and wall coverings in which the surfaces interact to generate a new language in home design

Cerim is the brand that focuses primarily on color and on decoration Coverings designed on an integral basis to make the most of all parts of the home and offer solutions that adapt to the most diverse interior design contexts

Casa dolce casa and Casamood is the brand intended for high-end architecture and interior design and offers attractively blended colours and surfaces drawn from nature for the creation of warm interiors A range of matching colours and surfaces that combines porcelain stoneware with other types of materials Architectural design effects are blended with the language of interior decoration to create new types of relationships

CEDIT - Ceramiche drsquoItalia embodies the dialogue between art craftsmanship and technology The brand that shapes ceramic matter in the service of creativity allowing leading names of our time to express themselves to their full potential Large designer slabs that renew the concept of architectural space

FLORIM stone is the brand that combines performance and practicality with the utmost personalization of spaces Large porcelain stoneware slabs at the service of interior design professionals delivering creative flexibility with outstanding technical performances and appearance values

Florim USA is the brand of the American subsidiary its porcelain stoneware tiles for residential and commercial use manufactured in the plant at Clarksville (Tennessee) are tailored to suit the tastes of the largest possible segment of the North American market

FLORIM USASite production plant and logistics hubClarksville TN (USA)

Flagship StoreNew York NY (USA)

Logistics hubParanagrave (BRAZIL)

OceSingapore (SINGAPORE)

Flagship StoreMoscow (RUSSIA)

Site production plant and logistics hubFiorano Modenese (Modena ITALY)Production plantMordano (Bologna ITALY)

- Flagship Store- Spazio CEDITMilan (ITALY)

2016 Sustainability Report10

Our Design ServiceAs well as the product itself Florim offers a unique level of 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 skills and experience whenever the style and performance of porcelain tiles become fundamental to the project In the age of speed and the digital revolution the company has also created an integrated web platform to give its professional partners unbeatable service Exclusive events visibility for projects free training meetings and specific competitions are just some of the services offered by Florim4Architectscom

Expo Azerbajan Pavilion winner of the Florim4Architects ldquoProject of the Yearrdquo competition

2016 Sustainability Report 11

Our 2016In this section we focus on the latest news from the Group covering a wide variety of aspects but all confirming the importance of Florims large slabs and once again underlining the centrality of innovation for the companys business

New brands

In April Florim chose the Salone Internazionale del Mobile a major event for the global design community for the relaunch of the CEDIT - Ceramiche drsquoItalia brand The brand which has always had links with leading artists designers and architects has achieved a superlative creative standard over more than fifty years of experimentation with materials and stylistic research in ceramic design CEDIT is returning to the forefront of Italian manufacturing in partnership with some of contemporary Italys top creative names Its new identity is a fine blend of Craftsmanship and Innovation expressed on the large slabs produced by Florim technology December saw the official opening - in the heart of Milan - of the first Spazio CEDIT the tangible expression of an innovative display concept created to convey the brands philosophy to the world

The brand created to explore new application solutions reaching beyond the conventional construction concept is called FLORIM stone Launched at Cersaie - the biggest ceramics industry show - this brand combines the outstanding performances of porcelain stoneware with the utmost personalisation of spaces The dimensional and functional plus factors of latest-generation large slabs allow stoneware to be used in a versatile customized way not just as a wall and floor covering but also for tops and furnishings (tables kitchen worktops and bathroom counters doors and fireplaces are just some of the possible applications)

New look

A busy year partly due to the refurbishment of the Fiorano Modenese headquarters As well as the new gatehouse the faccedilade of the office building was also restyled bringing it up to date with an all-white lookAn innovative modification at the technological state of the art was made to the raw material shed with a ventilated faccedilade of almost 1900 msup2 of Magnum Oversize large slabs The installation reproduces the ldquoArcheologierdquo collection (designed by artist Franco Guerzoni for CEDIT) and the lake of Vernago in Italys Alto Adige region (photo by Vanni Borghi) A latest-generation project leading the way in technology safety and maintenanceLast but not least a new barrier was also designed and constructed to separate the Florim property from the SFrancesco road It took 3 months to erect a boundary fence of about 340 meters of double-sided porcelain stoneware slabs 180 cm high and 265 cm wide supported by a steel frame With a total of 1122 slabs the fence was designed to withstand weather earthquakes and the forces generated by traffic passing at high speeds Installed at different angles the slabs create attractive effects with light and shade demonstrating the importance of sophisticated aesthetics to the companys identity

New Awards

Florims large slabs are the featured products in the various awards received and have been assigned one of the most important accolades in the design world with an Honourable Mention at the XXIV edition of the ADI Compasso drsquoOro awards

Just a few months after its launch the CEDIT brand also received major awards at the global level the NYCxDESIGN Award in New York the Hospitality Design Awards in New York ldquo100 Best of 2016rdquo at the Archiproducts Design Awards 2016 and the Best of the Best (April 2017) in the Design Product category at the coveted German Red Dot Design Award

More recognition came from the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master in Florim project which aims to give young people the skills required for sustainable development

Learn moreabout CEDIT

Learn moreabout FLORIM stone

2016 Sustainability Report12

In the age of digital transformation Florim still believes in the importance of creating opportunities for meeting and exchanging ideas and in 2016 more than 12000 people came to the Florim Gallery (a multi-purpose space of 9000 msup2 at the Fiorano headquarters) Events of social usefulness workshops community projects and business occasions our training events and hospitality staff were busy on many different fronts It was also a major year for off-site events The Florim Flagship Store in Milan and the just-opened New York Flagship Store hosted more than 3200 people at events for architects and designers supported with important partnerships with POLIdesign and leading publishersFlorim also chose the world-famous Peggy Guggenheim Collection in Venice as the location for two exclusive events to highlight the partnership agreement signed with Guggenheim Intrapresaelig A dinner in the wonderful setting of the museums panoramic terrace followed speeches by distinguished guests Ettore Mocchetti Martino Gamper Domitilla Dardi Giorgia Zanellato Daniele Bortotto Franco Guerzoni and Benedetto Fasciana The final event of the year was held for the employees with a ldquoWhite Christmas Partyrdquo evening at a Florim Gallery decorated for the festive season

A year of Florim events

LrsquoArte del Design - Florim event at the Peggy Guggenheim Collection (Venice)

2016 Sustainability Report

View the Florim eventat the Guggenheim

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 7: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 7

CEDIT - Storie Collection | Giorgia Zanellato amp Daniele BortottoNamed as Best of the Best at the 2017 Red Dot Design Award

2016 Sustainability Report8

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 fathers 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 todays Florim Solutions is created

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

Florim acquires Casa dolce casa

The Casamood brand is born

A logistics hub is opened in Brazil

The new multifunctional Florim Gallery is opened and the Florim Logistics area is completed at the Florim headquarters The Fondazione Ing Giovanni Lucchese foundation is established

The first Flagship Store is opened in Moscow

The Milan Flagship Store moves to a location in the very heart of the city A new Flagship Store opens in the center of New York

Florim relaunches the historic CEDIT - Ceramiche drsquoItalia brand (which opens its first flagship space in Milan) and FLORIM stone the Groups first brand focusing on the interior design sector

MADE IN FLORIM

Over 50 years of history

Over 1300 employees worldwide

27 million square meters produced every year

406 million Euro turnover

1424 tons of CO2 not emitted in 2015 thanks to the photovoltaic system

It takes more than figures to define a company Today passion innovation a constant commitment to improvement and corporate social responsibility are the core values of a new way of doing businessthe MADE IN FLORIM way

Our History 1962

1967

1976

1981

1984

1990

1992

1994

1995

2000

2005

2006

2011

2013

2014

2015

2016

Watch the Floriminstitutional video

2016 Sustainability Report 9

Our Locations The map shows the grouprsquos headquarters showrooms production plants and logistic hubsFlorim brand products are available from top international customers and importers

Our Brands

Floor Gres is the brand specifically for innovative architectural projects The Floor Gres product range meets all the many and varied needs of contemporary architecture in terms of design and technical capabilities and environmental standards

Rex is the brand which denotes stylistic excellence with products inspired by precious natural materials (wood marble and stone) coordinated floor and wall coverings in which the surfaces interact to generate a new language in home design

Cerim is the brand that focuses primarily on color and on decoration Coverings designed on an integral basis to make the most of all parts of the home and offer solutions that adapt to the most diverse interior design contexts

Casa dolce casa and Casamood is the brand intended for high-end architecture and interior design and offers attractively blended colours and surfaces drawn from nature for the creation of warm interiors A range of matching colours and surfaces that combines porcelain stoneware with other types of materials Architectural design effects are blended with the language of interior decoration to create new types of relationships

CEDIT - Ceramiche drsquoItalia embodies the dialogue between art craftsmanship and technology The brand that shapes ceramic matter in the service of creativity allowing leading names of our time to express themselves to their full potential Large designer slabs that renew the concept of architectural space

FLORIM stone is the brand that combines performance and practicality with the utmost personalization of spaces Large porcelain stoneware slabs at the service of interior design professionals delivering creative flexibility with outstanding technical performances and appearance values

Florim USA is the brand of the American subsidiary its porcelain stoneware tiles for residential and commercial use manufactured in the plant at Clarksville (Tennessee) are tailored to suit the tastes of the largest possible segment of the North American market

FLORIM USASite production plant and logistics hubClarksville TN (USA)

Flagship StoreNew York NY (USA)

Logistics hubParanagrave (BRAZIL)

OceSingapore (SINGAPORE)

Flagship StoreMoscow (RUSSIA)

Site production plant and logistics hubFiorano Modenese (Modena ITALY)Production plantMordano (Bologna ITALY)

- Flagship Store- Spazio CEDITMilan (ITALY)

2016 Sustainability Report10

Our Design ServiceAs well as the product itself Florim offers a unique level of 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 skills and experience whenever the style and performance of porcelain tiles become fundamental to the project In the age of speed and the digital revolution the company has also created an integrated web platform to give its professional partners unbeatable service Exclusive events visibility for projects free training meetings and specific competitions are just some of the services offered by Florim4Architectscom

Expo Azerbajan Pavilion winner of the Florim4Architects ldquoProject of the Yearrdquo competition

2016 Sustainability Report 11

Our 2016In this section we focus on the latest news from the Group covering a wide variety of aspects but all confirming the importance of Florims large slabs and once again underlining the centrality of innovation for the companys business

New brands

In April Florim chose the Salone Internazionale del Mobile a major event for the global design community for the relaunch of the CEDIT - Ceramiche drsquoItalia brand The brand which has always had links with leading artists designers and architects has achieved a superlative creative standard over more than fifty years of experimentation with materials and stylistic research in ceramic design CEDIT is returning to the forefront of Italian manufacturing in partnership with some of contemporary Italys top creative names Its new identity is a fine blend of Craftsmanship and Innovation expressed on the large slabs produced by Florim technology December saw the official opening - in the heart of Milan - of the first Spazio CEDIT the tangible expression of an innovative display concept created to convey the brands philosophy to the world

The brand created to explore new application solutions reaching beyond the conventional construction concept is called FLORIM stone Launched at Cersaie - the biggest ceramics industry show - this brand combines the outstanding performances of porcelain stoneware with the utmost personalisation of spaces The dimensional and functional plus factors of latest-generation large slabs allow stoneware to be used in a versatile customized way not just as a wall and floor covering but also for tops and furnishings (tables kitchen worktops and bathroom counters doors and fireplaces are just some of the possible applications)

New look

A busy year partly due to the refurbishment of the Fiorano Modenese headquarters As well as the new gatehouse the faccedilade of the office building was also restyled bringing it up to date with an all-white lookAn innovative modification at the technological state of the art was made to the raw material shed with a ventilated faccedilade of almost 1900 msup2 of Magnum Oversize large slabs The installation reproduces the ldquoArcheologierdquo collection (designed by artist Franco Guerzoni for CEDIT) and the lake of Vernago in Italys Alto Adige region (photo by Vanni Borghi) A latest-generation project leading the way in technology safety and maintenanceLast but not least a new barrier was also designed and constructed to separate the Florim property from the SFrancesco road It took 3 months to erect a boundary fence of about 340 meters of double-sided porcelain stoneware slabs 180 cm high and 265 cm wide supported by a steel frame With a total of 1122 slabs the fence was designed to withstand weather earthquakes and the forces generated by traffic passing at high speeds Installed at different angles the slabs create attractive effects with light and shade demonstrating the importance of sophisticated aesthetics to the companys identity

New Awards

Florims large slabs are the featured products in the various awards received and have been assigned one of the most important accolades in the design world with an Honourable Mention at the XXIV edition of the ADI Compasso drsquoOro awards

Just a few months after its launch the CEDIT brand also received major awards at the global level the NYCxDESIGN Award in New York the Hospitality Design Awards in New York ldquo100 Best of 2016rdquo at the Archiproducts Design Awards 2016 and the Best of the Best (April 2017) in the Design Product category at the coveted German Red Dot Design Award

More recognition came from the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master in Florim project which aims to give young people the skills required for sustainable development

Learn moreabout CEDIT

Learn moreabout FLORIM stone

2016 Sustainability Report12

In the age of digital transformation Florim still believes in the importance of creating opportunities for meeting and exchanging ideas and in 2016 more than 12000 people came to the Florim Gallery (a multi-purpose space of 9000 msup2 at the Fiorano headquarters) Events of social usefulness workshops community projects and business occasions our training events and hospitality staff were busy on many different fronts It was also a major year for off-site events The Florim Flagship Store in Milan and the just-opened New York Flagship Store hosted more than 3200 people at events for architects and designers supported with important partnerships with POLIdesign and leading publishersFlorim also chose the world-famous Peggy Guggenheim Collection in Venice as the location for two exclusive events to highlight the partnership agreement signed with Guggenheim Intrapresaelig A dinner in the wonderful setting of the museums panoramic terrace followed speeches by distinguished guests Ettore Mocchetti Martino Gamper Domitilla Dardi Giorgia Zanellato Daniele Bortotto Franco Guerzoni and Benedetto Fasciana The final event of the year was held for the employees with a ldquoWhite Christmas Partyrdquo evening at a Florim Gallery decorated for the festive season

A year of Florim events

LrsquoArte del Design - Florim event at the Peggy Guggenheim Collection (Venice)

2016 Sustainability Report

View the Florim eventat the Guggenheim

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 8: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report8

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 fathers 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 todays Florim Solutions is created

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

Florim acquires Casa dolce casa

The Casamood brand is born

A logistics hub is opened in Brazil

The new multifunctional Florim Gallery is opened and the Florim Logistics area is completed at the Florim headquarters The Fondazione Ing Giovanni Lucchese foundation is established

The first Flagship Store is opened in Moscow

The Milan Flagship Store moves to a location in the very heart of the city A new Flagship Store opens in the center of New York

Florim relaunches the historic CEDIT - Ceramiche drsquoItalia brand (which opens its first flagship space in Milan) and FLORIM stone the Groups first brand focusing on the interior design sector

MADE IN FLORIM

Over 50 years of history

Over 1300 employees worldwide

27 million square meters produced every year

406 million Euro turnover

1424 tons of CO2 not emitted in 2015 thanks to the photovoltaic system

It takes more than figures to define a company Today passion innovation a constant commitment to improvement and corporate social responsibility are the core values of a new way of doing businessthe MADE IN FLORIM way

Our History 1962

1967

1976

1981

1984

1990

1992

1994

1995

2000

2005

2006

2011

2013

2014

2015

2016

Watch the Floriminstitutional video

2016 Sustainability Report 9

Our Locations The map shows the grouprsquos headquarters showrooms production plants and logistic hubsFlorim brand products are available from top international customers and importers

Our Brands

Floor Gres is the brand specifically for innovative architectural projects The Floor Gres product range meets all the many and varied needs of contemporary architecture in terms of design and technical capabilities and environmental standards

Rex is the brand which denotes stylistic excellence with products inspired by precious natural materials (wood marble and stone) coordinated floor and wall coverings in which the surfaces interact to generate a new language in home design

Cerim is the brand that focuses primarily on color and on decoration Coverings designed on an integral basis to make the most of all parts of the home and offer solutions that adapt to the most diverse interior design contexts

Casa dolce casa and Casamood is the brand intended for high-end architecture and interior design and offers attractively blended colours and surfaces drawn from nature for the creation of warm interiors A range of matching colours and surfaces that combines porcelain stoneware with other types of materials Architectural design effects are blended with the language of interior decoration to create new types of relationships

CEDIT - Ceramiche drsquoItalia embodies the dialogue between art craftsmanship and technology The brand that shapes ceramic matter in the service of creativity allowing leading names of our time to express themselves to their full potential Large designer slabs that renew the concept of architectural space

FLORIM stone is the brand that combines performance and practicality with the utmost personalization of spaces Large porcelain stoneware slabs at the service of interior design professionals delivering creative flexibility with outstanding technical performances and appearance values

Florim USA is the brand of the American subsidiary its porcelain stoneware tiles for residential and commercial use manufactured in the plant at Clarksville (Tennessee) are tailored to suit the tastes of the largest possible segment of the North American market

FLORIM USASite production plant and logistics hubClarksville TN (USA)

Flagship StoreNew York NY (USA)

Logistics hubParanagrave (BRAZIL)

OceSingapore (SINGAPORE)

Flagship StoreMoscow (RUSSIA)

Site production plant and logistics hubFiorano Modenese (Modena ITALY)Production plantMordano (Bologna ITALY)

- Flagship Store- Spazio CEDITMilan (ITALY)

2016 Sustainability Report10

Our Design ServiceAs well as the product itself Florim offers a unique level of 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 skills and experience whenever the style and performance of porcelain tiles become fundamental to the project In the age of speed and the digital revolution the company has also created an integrated web platform to give its professional partners unbeatable service Exclusive events visibility for projects free training meetings and specific competitions are just some of the services offered by Florim4Architectscom

Expo Azerbajan Pavilion winner of the Florim4Architects ldquoProject of the Yearrdquo competition

2016 Sustainability Report 11

Our 2016In this section we focus on the latest news from the Group covering a wide variety of aspects but all confirming the importance of Florims large slabs and once again underlining the centrality of innovation for the companys business

New brands

In April Florim chose the Salone Internazionale del Mobile a major event for the global design community for the relaunch of the CEDIT - Ceramiche drsquoItalia brand The brand which has always had links with leading artists designers and architects has achieved a superlative creative standard over more than fifty years of experimentation with materials and stylistic research in ceramic design CEDIT is returning to the forefront of Italian manufacturing in partnership with some of contemporary Italys top creative names Its new identity is a fine blend of Craftsmanship and Innovation expressed on the large slabs produced by Florim technology December saw the official opening - in the heart of Milan - of the first Spazio CEDIT the tangible expression of an innovative display concept created to convey the brands philosophy to the world

The brand created to explore new application solutions reaching beyond the conventional construction concept is called FLORIM stone Launched at Cersaie - the biggest ceramics industry show - this brand combines the outstanding performances of porcelain stoneware with the utmost personalisation of spaces The dimensional and functional plus factors of latest-generation large slabs allow stoneware to be used in a versatile customized way not just as a wall and floor covering but also for tops and furnishings (tables kitchen worktops and bathroom counters doors and fireplaces are just some of the possible applications)

New look

A busy year partly due to the refurbishment of the Fiorano Modenese headquarters As well as the new gatehouse the faccedilade of the office building was also restyled bringing it up to date with an all-white lookAn innovative modification at the technological state of the art was made to the raw material shed with a ventilated faccedilade of almost 1900 msup2 of Magnum Oversize large slabs The installation reproduces the ldquoArcheologierdquo collection (designed by artist Franco Guerzoni for CEDIT) and the lake of Vernago in Italys Alto Adige region (photo by Vanni Borghi) A latest-generation project leading the way in technology safety and maintenanceLast but not least a new barrier was also designed and constructed to separate the Florim property from the SFrancesco road It took 3 months to erect a boundary fence of about 340 meters of double-sided porcelain stoneware slabs 180 cm high and 265 cm wide supported by a steel frame With a total of 1122 slabs the fence was designed to withstand weather earthquakes and the forces generated by traffic passing at high speeds Installed at different angles the slabs create attractive effects with light and shade demonstrating the importance of sophisticated aesthetics to the companys identity

New Awards

Florims large slabs are the featured products in the various awards received and have been assigned one of the most important accolades in the design world with an Honourable Mention at the XXIV edition of the ADI Compasso drsquoOro awards

Just a few months after its launch the CEDIT brand also received major awards at the global level the NYCxDESIGN Award in New York the Hospitality Design Awards in New York ldquo100 Best of 2016rdquo at the Archiproducts Design Awards 2016 and the Best of the Best (April 2017) in the Design Product category at the coveted German Red Dot Design Award

More recognition came from the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master in Florim project which aims to give young people the skills required for sustainable development

Learn moreabout CEDIT

Learn moreabout FLORIM stone

2016 Sustainability Report12

In the age of digital transformation Florim still believes in the importance of creating opportunities for meeting and exchanging ideas and in 2016 more than 12000 people came to the Florim Gallery (a multi-purpose space of 9000 msup2 at the Fiorano headquarters) Events of social usefulness workshops community projects and business occasions our training events and hospitality staff were busy on many different fronts It was also a major year for off-site events The Florim Flagship Store in Milan and the just-opened New York Flagship Store hosted more than 3200 people at events for architects and designers supported with important partnerships with POLIdesign and leading publishersFlorim also chose the world-famous Peggy Guggenheim Collection in Venice as the location for two exclusive events to highlight the partnership agreement signed with Guggenheim Intrapresaelig A dinner in the wonderful setting of the museums panoramic terrace followed speeches by distinguished guests Ettore Mocchetti Martino Gamper Domitilla Dardi Giorgia Zanellato Daniele Bortotto Franco Guerzoni and Benedetto Fasciana The final event of the year was held for the employees with a ldquoWhite Christmas Partyrdquo evening at a Florim Gallery decorated for the festive season

A year of Florim events

LrsquoArte del Design - Florim event at the Peggy Guggenheim Collection (Venice)

2016 Sustainability Report

View the Florim eventat the Guggenheim

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 9: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 9

Our Locations The map shows the grouprsquos headquarters showrooms production plants and logistic hubsFlorim brand products are available from top international customers and importers

Our Brands

Floor Gres is the brand specifically for innovative architectural projects The Floor Gres product range meets all the many and varied needs of contemporary architecture in terms of design and technical capabilities and environmental standards

Rex is the brand which denotes stylistic excellence with products inspired by precious natural materials (wood marble and stone) coordinated floor and wall coverings in which the surfaces interact to generate a new language in home design

Cerim is the brand that focuses primarily on color and on decoration Coverings designed on an integral basis to make the most of all parts of the home and offer solutions that adapt to the most diverse interior design contexts

Casa dolce casa and Casamood is the brand intended for high-end architecture and interior design and offers attractively blended colours and surfaces drawn from nature for the creation of warm interiors A range of matching colours and surfaces that combines porcelain stoneware with other types of materials Architectural design effects are blended with the language of interior decoration to create new types of relationships

CEDIT - Ceramiche drsquoItalia embodies the dialogue between art craftsmanship and technology The brand that shapes ceramic matter in the service of creativity allowing leading names of our time to express themselves to their full potential Large designer slabs that renew the concept of architectural space

FLORIM stone is the brand that combines performance and practicality with the utmost personalization of spaces Large porcelain stoneware slabs at the service of interior design professionals delivering creative flexibility with outstanding technical performances and appearance values

Florim USA is the brand of the American subsidiary its porcelain stoneware tiles for residential and commercial use manufactured in the plant at Clarksville (Tennessee) are tailored to suit the tastes of the largest possible segment of the North American market

FLORIM USASite production plant and logistics hubClarksville TN (USA)

Flagship StoreNew York NY (USA)

Logistics hubParanagrave (BRAZIL)

OceSingapore (SINGAPORE)

Flagship StoreMoscow (RUSSIA)

Site production plant and logistics hubFiorano Modenese (Modena ITALY)Production plantMordano (Bologna ITALY)

- Flagship Store- Spazio CEDITMilan (ITALY)

2016 Sustainability Report10

Our Design ServiceAs well as the product itself Florim offers a unique level of 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 skills and experience whenever the style and performance of porcelain tiles become fundamental to the project In the age of speed and the digital revolution the company has also created an integrated web platform to give its professional partners unbeatable service Exclusive events visibility for projects free training meetings and specific competitions are just some of the services offered by Florim4Architectscom

Expo Azerbajan Pavilion winner of the Florim4Architects ldquoProject of the Yearrdquo competition

2016 Sustainability Report 11

Our 2016In this section we focus on the latest news from the Group covering a wide variety of aspects but all confirming the importance of Florims large slabs and once again underlining the centrality of innovation for the companys business

New brands

In April Florim chose the Salone Internazionale del Mobile a major event for the global design community for the relaunch of the CEDIT - Ceramiche drsquoItalia brand The brand which has always had links with leading artists designers and architects has achieved a superlative creative standard over more than fifty years of experimentation with materials and stylistic research in ceramic design CEDIT is returning to the forefront of Italian manufacturing in partnership with some of contemporary Italys top creative names Its new identity is a fine blend of Craftsmanship and Innovation expressed on the large slabs produced by Florim technology December saw the official opening - in the heart of Milan - of the first Spazio CEDIT the tangible expression of an innovative display concept created to convey the brands philosophy to the world

The brand created to explore new application solutions reaching beyond the conventional construction concept is called FLORIM stone Launched at Cersaie - the biggest ceramics industry show - this brand combines the outstanding performances of porcelain stoneware with the utmost personalisation of spaces The dimensional and functional plus factors of latest-generation large slabs allow stoneware to be used in a versatile customized way not just as a wall and floor covering but also for tops and furnishings (tables kitchen worktops and bathroom counters doors and fireplaces are just some of the possible applications)

New look

A busy year partly due to the refurbishment of the Fiorano Modenese headquarters As well as the new gatehouse the faccedilade of the office building was also restyled bringing it up to date with an all-white lookAn innovative modification at the technological state of the art was made to the raw material shed with a ventilated faccedilade of almost 1900 msup2 of Magnum Oversize large slabs The installation reproduces the ldquoArcheologierdquo collection (designed by artist Franco Guerzoni for CEDIT) and the lake of Vernago in Italys Alto Adige region (photo by Vanni Borghi) A latest-generation project leading the way in technology safety and maintenanceLast but not least a new barrier was also designed and constructed to separate the Florim property from the SFrancesco road It took 3 months to erect a boundary fence of about 340 meters of double-sided porcelain stoneware slabs 180 cm high and 265 cm wide supported by a steel frame With a total of 1122 slabs the fence was designed to withstand weather earthquakes and the forces generated by traffic passing at high speeds Installed at different angles the slabs create attractive effects with light and shade demonstrating the importance of sophisticated aesthetics to the companys identity

New Awards

Florims large slabs are the featured products in the various awards received and have been assigned one of the most important accolades in the design world with an Honourable Mention at the XXIV edition of the ADI Compasso drsquoOro awards

Just a few months after its launch the CEDIT brand also received major awards at the global level the NYCxDESIGN Award in New York the Hospitality Design Awards in New York ldquo100 Best of 2016rdquo at the Archiproducts Design Awards 2016 and the Best of the Best (April 2017) in the Design Product category at the coveted German Red Dot Design Award

More recognition came from the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master in Florim project which aims to give young people the skills required for sustainable development

Learn moreabout CEDIT

Learn moreabout FLORIM stone

2016 Sustainability Report12

In the age of digital transformation Florim still believes in the importance of creating opportunities for meeting and exchanging ideas and in 2016 more than 12000 people came to the Florim Gallery (a multi-purpose space of 9000 msup2 at the Fiorano headquarters) Events of social usefulness workshops community projects and business occasions our training events and hospitality staff were busy on many different fronts It was also a major year for off-site events The Florim Flagship Store in Milan and the just-opened New York Flagship Store hosted more than 3200 people at events for architects and designers supported with important partnerships with POLIdesign and leading publishersFlorim also chose the world-famous Peggy Guggenheim Collection in Venice as the location for two exclusive events to highlight the partnership agreement signed with Guggenheim Intrapresaelig A dinner in the wonderful setting of the museums panoramic terrace followed speeches by distinguished guests Ettore Mocchetti Martino Gamper Domitilla Dardi Giorgia Zanellato Daniele Bortotto Franco Guerzoni and Benedetto Fasciana The final event of the year was held for the employees with a ldquoWhite Christmas Partyrdquo evening at a Florim Gallery decorated for the festive season

A year of Florim events

LrsquoArte del Design - Florim event at the Peggy Guggenheim Collection (Venice)

2016 Sustainability Report

View the Florim eventat the Guggenheim

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 10: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report10

Our Design ServiceAs well as the product itself Florim offers a unique level of 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 skills and experience whenever the style and performance of porcelain tiles become fundamental to the project In the age of speed and the digital revolution the company has also created an integrated web platform to give its professional partners unbeatable service Exclusive events visibility for projects free training meetings and specific competitions are just some of the services offered by Florim4Architectscom

Expo Azerbajan Pavilion winner of the Florim4Architects ldquoProject of the Yearrdquo competition

2016 Sustainability Report 11

Our 2016In this section we focus on the latest news from the Group covering a wide variety of aspects but all confirming the importance of Florims large slabs and once again underlining the centrality of innovation for the companys business

New brands

In April Florim chose the Salone Internazionale del Mobile a major event for the global design community for the relaunch of the CEDIT - Ceramiche drsquoItalia brand The brand which has always had links with leading artists designers and architects has achieved a superlative creative standard over more than fifty years of experimentation with materials and stylistic research in ceramic design CEDIT is returning to the forefront of Italian manufacturing in partnership with some of contemporary Italys top creative names Its new identity is a fine blend of Craftsmanship and Innovation expressed on the large slabs produced by Florim technology December saw the official opening - in the heart of Milan - of the first Spazio CEDIT the tangible expression of an innovative display concept created to convey the brands philosophy to the world

The brand created to explore new application solutions reaching beyond the conventional construction concept is called FLORIM stone Launched at Cersaie - the biggest ceramics industry show - this brand combines the outstanding performances of porcelain stoneware with the utmost personalisation of spaces The dimensional and functional plus factors of latest-generation large slabs allow stoneware to be used in a versatile customized way not just as a wall and floor covering but also for tops and furnishings (tables kitchen worktops and bathroom counters doors and fireplaces are just some of the possible applications)

New look

A busy year partly due to the refurbishment of the Fiorano Modenese headquarters As well as the new gatehouse the faccedilade of the office building was also restyled bringing it up to date with an all-white lookAn innovative modification at the technological state of the art was made to the raw material shed with a ventilated faccedilade of almost 1900 msup2 of Magnum Oversize large slabs The installation reproduces the ldquoArcheologierdquo collection (designed by artist Franco Guerzoni for CEDIT) and the lake of Vernago in Italys Alto Adige region (photo by Vanni Borghi) A latest-generation project leading the way in technology safety and maintenanceLast but not least a new barrier was also designed and constructed to separate the Florim property from the SFrancesco road It took 3 months to erect a boundary fence of about 340 meters of double-sided porcelain stoneware slabs 180 cm high and 265 cm wide supported by a steel frame With a total of 1122 slabs the fence was designed to withstand weather earthquakes and the forces generated by traffic passing at high speeds Installed at different angles the slabs create attractive effects with light and shade demonstrating the importance of sophisticated aesthetics to the companys identity

New Awards

Florims large slabs are the featured products in the various awards received and have been assigned one of the most important accolades in the design world with an Honourable Mention at the XXIV edition of the ADI Compasso drsquoOro awards

Just a few months after its launch the CEDIT brand also received major awards at the global level the NYCxDESIGN Award in New York the Hospitality Design Awards in New York ldquo100 Best of 2016rdquo at the Archiproducts Design Awards 2016 and the Best of the Best (April 2017) in the Design Product category at the coveted German Red Dot Design Award

More recognition came from the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master in Florim project which aims to give young people the skills required for sustainable development

Learn moreabout CEDIT

Learn moreabout FLORIM stone

2016 Sustainability Report12

In the age of digital transformation Florim still believes in the importance of creating opportunities for meeting and exchanging ideas and in 2016 more than 12000 people came to the Florim Gallery (a multi-purpose space of 9000 msup2 at the Fiorano headquarters) Events of social usefulness workshops community projects and business occasions our training events and hospitality staff were busy on many different fronts It was also a major year for off-site events The Florim Flagship Store in Milan and the just-opened New York Flagship Store hosted more than 3200 people at events for architects and designers supported with important partnerships with POLIdesign and leading publishersFlorim also chose the world-famous Peggy Guggenheim Collection in Venice as the location for two exclusive events to highlight the partnership agreement signed with Guggenheim Intrapresaelig A dinner in the wonderful setting of the museums panoramic terrace followed speeches by distinguished guests Ettore Mocchetti Martino Gamper Domitilla Dardi Giorgia Zanellato Daniele Bortotto Franco Guerzoni and Benedetto Fasciana The final event of the year was held for the employees with a ldquoWhite Christmas Partyrdquo evening at a Florim Gallery decorated for the festive season

A year of Florim events

LrsquoArte del Design - Florim event at the Peggy Guggenheim Collection (Venice)

2016 Sustainability Report

View the Florim eventat the Guggenheim

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 11: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 11

Our 2016In this section we focus on the latest news from the Group covering a wide variety of aspects but all confirming the importance of Florims large slabs and once again underlining the centrality of innovation for the companys business

New brands

In April Florim chose the Salone Internazionale del Mobile a major event for the global design community for the relaunch of the CEDIT - Ceramiche drsquoItalia brand The brand which has always had links with leading artists designers and architects has achieved a superlative creative standard over more than fifty years of experimentation with materials and stylistic research in ceramic design CEDIT is returning to the forefront of Italian manufacturing in partnership with some of contemporary Italys top creative names Its new identity is a fine blend of Craftsmanship and Innovation expressed on the large slabs produced by Florim technology December saw the official opening - in the heart of Milan - of the first Spazio CEDIT the tangible expression of an innovative display concept created to convey the brands philosophy to the world

The brand created to explore new application solutions reaching beyond the conventional construction concept is called FLORIM stone Launched at Cersaie - the biggest ceramics industry show - this brand combines the outstanding performances of porcelain stoneware with the utmost personalisation of spaces The dimensional and functional plus factors of latest-generation large slabs allow stoneware to be used in a versatile customized way not just as a wall and floor covering but also for tops and furnishings (tables kitchen worktops and bathroom counters doors and fireplaces are just some of the possible applications)

New look

A busy year partly due to the refurbishment of the Fiorano Modenese headquarters As well as the new gatehouse the faccedilade of the office building was also restyled bringing it up to date with an all-white lookAn innovative modification at the technological state of the art was made to the raw material shed with a ventilated faccedilade of almost 1900 msup2 of Magnum Oversize large slabs The installation reproduces the ldquoArcheologierdquo collection (designed by artist Franco Guerzoni for CEDIT) and the lake of Vernago in Italys Alto Adige region (photo by Vanni Borghi) A latest-generation project leading the way in technology safety and maintenanceLast but not least a new barrier was also designed and constructed to separate the Florim property from the SFrancesco road It took 3 months to erect a boundary fence of about 340 meters of double-sided porcelain stoneware slabs 180 cm high and 265 cm wide supported by a steel frame With a total of 1122 slabs the fence was designed to withstand weather earthquakes and the forces generated by traffic passing at high speeds Installed at different angles the slabs create attractive effects with light and shade demonstrating the importance of sophisticated aesthetics to the companys identity

New Awards

Florims large slabs are the featured products in the various awards received and have been assigned one of the most important accolades in the design world with an Honourable Mention at the XXIV edition of the ADI Compasso drsquoOro awards

Just a few months after its launch the CEDIT brand also received major awards at the global level the NYCxDESIGN Award in New York the Hospitality Design Awards in New York ldquo100 Best of 2016rdquo at the Archiproducts Design Awards 2016 and the Best of the Best (April 2017) in the Design Product category at the coveted German Red Dot Design Award

More recognition came from the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master in Florim project which aims to give young people the skills required for sustainable development

Learn moreabout CEDIT

Learn moreabout FLORIM stone

2016 Sustainability Report12

In the age of digital transformation Florim still believes in the importance of creating opportunities for meeting and exchanging ideas and in 2016 more than 12000 people came to the Florim Gallery (a multi-purpose space of 9000 msup2 at the Fiorano headquarters) Events of social usefulness workshops community projects and business occasions our training events and hospitality staff were busy on many different fronts It was also a major year for off-site events The Florim Flagship Store in Milan and the just-opened New York Flagship Store hosted more than 3200 people at events for architects and designers supported with important partnerships with POLIdesign and leading publishersFlorim also chose the world-famous Peggy Guggenheim Collection in Venice as the location for two exclusive events to highlight the partnership agreement signed with Guggenheim Intrapresaelig A dinner in the wonderful setting of the museums panoramic terrace followed speeches by distinguished guests Ettore Mocchetti Martino Gamper Domitilla Dardi Giorgia Zanellato Daniele Bortotto Franco Guerzoni and Benedetto Fasciana The final event of the year was held for the employees with a ldquoWhite Christmas Partyrdquo evening at a Florim Gallery decorated for the festive season

A year of Florim events

LrsquoArte del Design - Florim event at the Peggy Guggenheim Collection (Venice)

2016 Sustainability Report

View the Florim eventat the Guggenheim

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 12: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report12

In the age of digital transformation Florim still believes in the importance of creating opportunities for meeting and exchanging ideas and in 2016 more than 12000 people came to the Florim Gallery (a multi-purpose space of 9000 msup2 at the Fiorano headquarters) Events of social usefulness workshops community projects and business occasions our training events and hospitality staff were busy on many different fronts It was also a major year for off-site events The Florim Flagship Store in Milan and the just-opened New York Flagship Store hosted more than 3200 people at events for architects and designers supported with important partnerships with POLIdesign and leading publishersFlorim also chose the world-famous Peggy Guggenheim Collection in Venice as the location for two exclusive events to highlight the partnership agreement signed with Guggenheim Intrapresaelig A dinner in the wonderful setting of the museums panoramic terrace followed speeches by distinguished guests Ettore Mocchetti Martino Gamper Domitilla Dardi Giorgia Zanellato Daniele Bortotto Franco Guerzoni and Benedetto Fasciana The final event of the year was held for the employees with a ldquoWhite Christmas Partyrdquo evening at a Florim Gallery decorated for the festive season

A year of Florim events

LrsquoArte del Design - Florim event at the Peggy Guggenheim Collection (Venice)

2016 Sustainability Report

View the Florim eventat the Guggenheim

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 13: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 13

GOVERNANCE

Code of EthicsThe groups 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 compliant with the provisions of Italian Legislative Decree 2312001 the Florim Board of Directors signed and promoted the corporate Code of Ethics (revised in June 2016) which has become an integral part of Florims business and is accepted by every new employee supplier and agentTo guarantee the application of and compliance with its contents a Supervisory Board was established to detect any breaches of its provisions All stakeholders can also contact the Supervisory Board (organismodivigilanzaflorimit) for further explanations regarding the interpretation and application of the corporate Code of Ethics as described on the corporate websiteThe following is an extract from the rules of conduct which govern the way we do business

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 prioritise 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

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 14: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report14

Corporate BodiesFlorim Ceramiche spa is a family-run business with fully subscribed paid-up share capital consisting of 50000000 ordinary shares with a face value of 1 Euro each The capital is 100 owned by the holding company FinFloor spa with registered office in Fiorano Modenese which is in turn indirectly owned by the Lucchese family through Fin-Twin spa

The Board of Directors has 11 members

CLAUDIO LUCCHESE Chairman

DONATO BRUNI Deputy Chairman

MARIADELE LUCCHESE Director

ANNA LUCCHESE Director

FRANCESCA LUCCHESE Director

GIOVANNI LUCCHESE Director

The Board of Directors has a mandate of one year and new elections will coincide with the approval of the financial statements The Board of Statutory Auditors is composed of three members whose term of office is three years from their appointment on 1252016 until approval of the 2018 financial statements The financial statements of Florim spa and the consolidated financial statements of FinFloor spa and Fin-Twin spa are audited and certified by Deloitte spa

Corporate StructureThe changes to be noted since the previous financial statements include the incorporation of ldquoMordano 4 srlrdquo and amalgamation by acquisition of Maker srl in Florim Ceramiche spa

KRONOS 2 CERAMICHE spaShare capital euro 1646799

Fondazione Ing G LuccheseEndowment euro 60000

FABBRICA delle MATERIE srlShare capital euro 10000

EDIL FLOOR surlShare capital euro 9812681

ISABELLA srlShare capital euro 100000

FI HOLDING IncShare capital USD 50000

100

10

100

30

9667

100

1

1

99

99

100

FIN TWIN spaShare capital euro 540800

FINFLOOR spaShare capital euro 10500000

542810

FLORIM CERAMICHE spasingle shareholder companyShare capital euro 50000000

100

FLORIM BRASIL LtdaDISTRIBUICcedilAtildeO DE CERAcircMICAS Ltda

Share capital R$ 46100000

FLORIM RUSShare Capital 100000 Roubles

FLORIM USA incShare capital USD 51865541

FLORIM SOLUTION IncShare capital USD 845943

100

MORDANO 4 srlShare capital euro 100000

85

FLORIM FAR EAST PTE LtdShare capital S$ 10000

100

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 15: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 15

StakeholdersStakeholders are all individuals and groups who may influence or be influenced by a companys 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

bull to guarantee equal opportunities fair pay and professional growth

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

bull to create safe working environments and processes

bull to guarantee transparency and clarity in contract conditions

bull to encourage dialogue and internal communications

Customers and Consumers

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

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

bull guaranteeing clarity in contracts and prices

bull guaranteeing the reliability of its products and developing customer service

bull offering innovative safe environmentally sustainable products

bull 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

bull offering state-of-the-art solutions in terms of environmentally sustainability technology and design

bull establishing and fostering relationships with partner professionals

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

bull supplying turnkey solutions

Local Communities and Local Government

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

bull guaranteeing dialogue cooperation and transparency

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

bull continually improving the environmental performances of processes

bull researching developing and using the most sustainable technologies

bull 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 companiesrsquo CSR practices Florims 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

ERMES GIUSEPPE FERRARI Managing Director

GIOVANNI GROSSI Managing Director

OSCAR ISEPPI Managing Director

DORVAN SAZZI Managing Director

STEFANO TORRENTI Managing Director

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 16: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report16

Materiality ApproachIn 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 the report In fact organizations are faced with a large number of topics on which they could report Relevant topics and indicators are those considered important for reflecting the organizations economic environmental and social impacts or which influence the decisions of its stakeholder and which therefore potentially merit inclusion in the report In accordance with the GRI ndash G4 Guidelines Florim has analyzed and identified relevant topics which were assessed by the working team which drafted the Sustainability Report on the basis of discussion with the main stakeholders The findings which emerged were supported by a qualitative survey external to the companys context examining an analysis of the press gallery (more than 650 articles) competitors Sustainability Reports the Emas Study of the Fiorano and Sassuolo Ceramics District and the GRI document ndash ldquoSustainability Topics for Sector What do Stakeholders want to knowrdquo

In the chart below the aspects found to be most important appear in the top right-hand corner and constitute a strategic priority for the Group The topics in the bottom left-hand corner such as biodiversity prevention of corruption and absence of discrimination are less relevant because they are easy for both the organization and stakeholders to manage and no problems have ever been reported over the years Similarly the protection of human rights is now taken for granted since Florim complies strictly with all the provisions of the National Employment Contract

Importance for stakeholders

Importance for Florim spa

low

m

ediu

m

high

low medium high

Biodiversity

Indirect economic impacts

Prevention of corruption

Market share

Absence of discrimination

Sustainable transport

management

Protection of Human Rights

Environment and safety

Water saving

Energy efficiencyRaw materials

Diversity and equal opportunities

Transparency of financial and other

information

Ethical supplier

management

Investments in the local community 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

ENVIRONMENT

COMMUNITY

EMPLOYEESASSOCIATES

ECONOMIC PERFORMANCE

PRODUCT RESPONSIBILITY

HUMAN RIGHTS

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 17: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 17

FinFloor consolidated (in thousands of Euro) 2012 2013 2014 2015 2016

Net earnings 315344 325853 329533 374094 406759

EBIDTA 59608 72986 84395 98115 107186

Operating result 35717 50996 58508 66255 71028

Gross cash flow 52710 68312 83274 97268 109148

Net profit 26103 35732 36433 43324 49347

Net financial indebtedness (127730) (96500) (54524) (27326) (12508)

Final inventory 95514 84432 90283 92795 96721

Net shareholders equity 186905 218847 276916 332721 369937

Total investments 32572 48780 41584 34215 53531

2012 2013 2014 2015 2016

Waste produced (t) 30228 21170 22300 30862 34423

Recycled third-party waste (t) 4028 4190 1721 2570 5627

Total water consumption (msup3) finished product (t) 075 075 078 069 071

Recycled water percentage 100 100 100 100 100

Self-generated energy in relation to consumption 67 68 62 65 75

Investments in environmental management (euro000) 13617 2493 1995 465 6400

2012 2013 2014 2015 2016

Number of employees at 3112 1037 992 984 982 987

Total number of training hours 14690 9124 9056 7176 10606

Number of training hours on environment and safety 7572 4514 4200 3008 2489

Number of workplace injuries 63 62 74 56 43

Environmental and social profile figures refer to Florim Italy for Florim USA please see the relevant section (from page 37)

REPORTING

In brief

Economic Profile

Environmental Profile

Social Profile

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 18: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report18

Economic Responsibility

Comments on 2016 Economic Data

The Groups 2016 results were again good from every point of view

Compared to the previous year turnover increased by 87 leading thanks to careful management of production costs to an EBITDA of Euro 1071 million equivalent to 263 of turnover and a profit after tax of Euro 493 million

The companys financial data also significantly improved with a net financial position of Euro 125 million compared to Euro 273 million at the end of 2015 in spite of record technical investments of Euro 535 million and financial investments of Euro 11 million

Once again underlying the results achieved were large investments in latest-generation machinery and technologies painstaking research to develop materials with exceptionally high technical and design content human resources and projects for the increasingly direct promotion of Florims image and quality standard

Investments

The technical investments made in 2016 amount to Euro 535 million while Euro 11 million was spent on reacquiring 100 ownership of Maker srl followed by its amalgamation with Florim spa on 31 December The most important industrial projects included the continuation of the work on the Mordano plant which involved investments of Euro 26 million for the restructuring of the raw material preparation area and the doubling of production capacity for traditional porcelain stonewareThe investments of US$ 18 million at Florim USA were utilised to complete the renewal of the raw material preparation area and construct a new building for the technical organizationFinally about 9 million Euro was invested at Fiorano on various production line modernization projects

A creative hub for design style and new trends Milan once again confirms that it is the ideal setting for Florims investments and the opening of the all-new ldquoSpazio CEDITrdquo confirms the companys determination to strengthen its bonds with design professionals working in high-end interior design The culture of beauty art architecture and design are all integral to the genetic make-up of CEDIT ndash the historic Italian brand relaunched by Florim in 2016 ndash and dominate the display areas and the first six ceramic covering collections styled by famous names on the contemporary creative sceneOn two levels with a total floor area of more than 200 msup2 the space maintains the same stylistic identity as the one at Fiorano Modenese since they are both constructed to an architectural design intended to be replicated in CEDIT customers showrooms worldwide

Spazio CEDIT Watch theinauguration video

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 19: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 19

Economic Value Generated and Distributed

The figures for the economic value generated and distributed provide a simple clear explanation of how Florim has created wealth and redistributed it to its stakeholders The table below contains the data from Florims 2016 financial statements approved by the Board of Directors on 30 March and certified by external auditorsThe economic value directly generated is represented by the total earnings for 2016 while the economic value distributed includes the costs incurred for suppliers and employees payments to the state (taxes) and the donations which had positive repercussions for the community to which Florim spa belongs

Heading 2014 2015 2016

Revenues 253125 269855 302521

Direct economic value generated 253125 269855 302521

Operating costs 135735 150951 168809

Employee wages and benefits 56985 58149 62418

Payments to providers of capital 7413 6399 11903

Payments to government 15738 13162 15382

Community investments 221 212 240

Economic value distributed 216092 228873 258752

Economic value retained 37033 40982 43769

KeyRevenues net sales plus revenues from financial investments and sale of assetsOperating Costs payments to suppliers non-strategic investments royalties payment facilitationsEmployee wages and benefits employee wages and benefits per employees (current payments)Payments to providers of capital all payments to the organizations providers of capitalPayments to government gross taxes and dutiesCommunity investments voluntary donations and investments in the communityEconomic value retained calculated as economic value generated less economic value distributed

The data in the table are in thousands of Euro and refer to the consolidated financial statements of the Italian companies only

KBIS (USA) - detail of the stand created with ldquoI Classici di Rexrdquo

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 20: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report20

Casa dolce casa ndash Argille 20 Collection

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 21: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 21

Environmental ResponsibilityEffective environmental policy management energy saving and emissions reduction are amongst Florims strategic sustainability objectives

Our green projects in figures

2 highly-regarded process certifications

ISO 14001 (ENVIRONMENT)and ISO 50001 (ENERGY)

849873 MWh is the amount of electricity the

company succeeded in producing in-house during 2016

2 departments (marketing and communications)

engaged on digitizing advertising tools

8462 tons of CO2 NOT emitted

CO2

100 is the percentage of wastewater recycled

16000 msup2of photovoltaic panels covering

an area of 30000 msup2

75 is the percentage of the electricity consumed which is

produced in-house

4 latest-generation industrial kilns installed in

the last 3 years

4 different types of environmental product

certification

2 cogeneration plants to increase energy saving

and efficiency

1 laboratory for the development of contemporary design projects with a specific focus on the materials green

content

100is the percentage recycling of

industrial greenware waste in the production process

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 22: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report22

Certifications

System and process certifications

UNI EN ISO 14001TUumlV has awarded Florim the highly-regarded UNI EN ISO 14001 voluntary certification which confirms its 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

UNI 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 worlds first ceramics manufacturer to obtain ISO 50001 certification of its Energy Management System

In addition to its environmental certifications Florim has also been awarded prestigious AEO (Authorized Economic Operator) status

Further to a lengthy and demanding audit process by the Customs Authorities in 2016 Florim was awarded AEO certification the first company in the Province of Modena to receive this major form of approval Authorised Economic Operator status guarantees the companys absolute compliance with customs and security requirements in its foreign trade

Environmental Management

Waste 2012 2013 2014 2015 2016

Total waste produced (t) 30228 21170 22300 30862 34423

Non-dangerous recyclable waste (such as paper and cardboard fired scraps plastic glass and wood) ()

989 982 985 991 989

Non-dangerous disposed-of waste (such as the waste picked up by the motor sweepers) ()

02 04 02 02 02

Dangerous recyclable waste (such as spent oil batteries and monitors) ()

00 01 01 01 00

Dangerous disposed-of waste (such as spent lime) () 01 13 12 07 09

Third-party waste recycled within the production process (t) () 4028 4190 1721 2570 5627

Besides recycling greenware waste from its own production cycle (not included in the table because the amount cannot be calculated) Florim also recycles third party waste

Florims operations have always been oriented towards optimization of impact on the local community and environment Thanks to the work of its research laboratories the support of all staff and the recent investment plans tangible results have been achieved The data provided below reveal that in spite of an increase in production of 8 compared to the previous year consumption remains low The companys commitment to environmental protection is all-inclusive and also comprises a focus on the district within which it operates One example is the total removal of all asbestos cement from the Fiorano Modenese plant and the creation of the new recycling station opened in 2015 and donated to the Local Authority as a public serviceAs in previous years during 2016 Florim was not fined for any breaches of environmental regulations or laws

Florim recycles and optimises within the production process all greenware scraps dust residues from filters and sludge from the process and rectification wastewater treatment system The waste produced is detailed in the table the significant differences between years are due mainly to the major demolition and subsequent reconstruction works undertaken at the Italian plants

Waste Management

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 23: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 23

Water Resources

No environmental impact of wastewater discharges is specified since all the water from the production cycle is completely reused (100) All other effluents comply with legal requirements

The figure states the total cubic meters of water used per ton of finished product The water used in the Fiorano production process is drawn from private company-owned wells with water from the public main only used for non-industrial purposes The Mordano plant is supplied by an industrial water main Water use is measured by means of meter readings Four highly innovative dry rectifying plants have gone into production at Mordano since 2015 enabling the company to eliminate the physicalchemical treatment of the water used in the rectification process

WATER USE

2012

08

2013

08

2014

08

2015

07Total water consumption (msup3) finished product (t)

07

2016

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 Whats more all the packaging used (boxes cardboard shrink wraps pallets etc) can be completely recycled by the end user The latest investments made include new eco-friendly packaging machines increasing the number of these machines installed to 15 These plants completely eliminate waste due to leftover inventory saving significant amounts of cardboard

Packaging and Coverings

As the materiality assessment states Florim has 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 Florim takes special care over the choice of the raw materials used for its tile body mixes of which it is required to provide documentation guaranteeing compliance with the European Directives protecting wild birds (EU Dir 79409EEC) and habitats (EU Dir 9243EEC) and the United Nations Convention on the protection of biodiversity 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

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 24: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report24

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 environmentThe main indicator used to measure plants energy performance is the mean specific total energy consumption (TEJ) measured in GJt of product transferred to stock As the table below shows this figure is obtained by adding together heat consumption (NGJ) and electricity used (EEJ)

Parameter ndash Definition Unit of measurement

2012 2013 2014 2015 2016

NGJ Mean specific natural gas consumption in relation to the unit of weight of finished product transferred to stock

GJt 557 571 576 578 598

EEJ Mean specific electricity consumption in relation to the unit of weight of product transferred to stock

GJt 111 108 111 108 107

TEJ Mean total specific energy consumption in relation to the unit of weight of product transferred to stock

GJt 668 679 686 685 705

Self-generated electricity as a proportion of consumption

67 68 62 65 75

With two cogeneration plants (for the combined in-house production of heat and electricity) and 16000 msup2 of photovoltaic panels the company certainly sets a new benchmark for the entire ceramic tile industry 2016 saw the replacement of the Fiorano turbine set (the main component of the cogeneration plant) while the one in Mordano was kept in operation 247 factors which led to a 10 increase in in-house electricity production in relation to consumption To provide a clearer idea of the scale of the achievement the amount of electricity the company generated in-house in 2016 (849873 MWh) would cover the average annual consumption of about 37000 households (With consumption per household of 229 MWh - data from the latest ISTAT survey in 2012ndash calculated on the Italian average)

Photovoltaic Plant

kWp kWh produced kg of CO2 not emitted

270021 15937250 8462680

Good Practice

The head office organizations are also optimizing paper and energy consumption In addition to issuing and distributing the energy saving handbook for its offices the company is also trying to maximize savings on the raw material used and specifically the use of paper Internally the company only purchases reams of paper which carry environmental certification and the paper used in offices is collected separately for proper disposal Externally the company distributes a system of merchandising products made mainly from recycled paper and encourages the gradual digitization of its marketing tools as well as publishing all its catalogues in digital format on its Internet sites Florim offers its distributor companies an innovative digital touch screen tool with the pdf versions of the catalogues and other tools for the final consumerIn 2016 Florim decided to adopt a new payslip distribution procedure introducing an online processing system As well as providing employees with new functions and greater operating flexibility thanks to this system the company no longer prints out the monthly payslips saving paper ink and energy The scheme initially involving all office workers has the ambitious target of also including the staff of the Fiorano and Mordano plants

The 16000 square meter photovoltaic plant received recognition from GSE (Energy Management Services) as one of the most innovative installations of its type and from its commissioning (October 2011) up to December 2016 it produced the following results

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 25: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 25

Atmospheric Emissions

The industrial facility emits greenhouse gases basically CO2 from the following main sourcesbull combustion from the burning of fossil fuels (such as natural gas)bull 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 200387EC (ETS - Emission Trading Scheme) Florim has been reporting and certifying its CO2 emissions since 2013

CO2 emissions 2013 2014 2015 2016

CO2 emissions (t) 102728 103462 111862 132960

CO2 emissions (t) Finished product (t) 033 033 033 035

Emissions from the production cycle 2013 2014 2015 2016

Particulate material (gmsup2 finished product) 223 130 098 118

Lead (gmsup2 finished product) 000 000 000 000

Fluorine (gmsup2 finished product) 014 018 013 012

The increase in CO2 is due mainly to the large increase in the square meters produced (+ 8) and the 247 use of the cogeneration plant However it should be noted that the cogeneration plant provided a 10 increase in in-house electricity generation with lower CO2 emissions than electricity purchased from the grid produced mainly using fossil fuels (source ISPRA Fattori di emissione atmosferica di CO2 e sviluppo delle fonti rinnovabili nel settore elettrico Rapporti [Atmospheric CO2 Emission Factors and Development of Renewables in the Electricity Sector Reports] 2122015)The ratio between CO2 emissions and tons of finished product produced increased because in 2016 the sale of spray-dried material to other companies rose compared to the previous year (emissions from this phase are included in the emissions count but there is no corresponding output of finished product)

In a change from previous years the new GRI-G4 guidelines also require reporting of nitrogen oxide and sulphur oxide emissions Nitrogen oxide (NOx) emissions are within the limits permitted under the integrated environmental authorisation Sulphur oxide (SOx) emissions are not reported here since this figure is not required by the IEA

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 further optimized the handling of materials thanks to the new highly-automated logistics hub created at the via Canaletto location In 2016 about 53 of the vehicles used on the companys premises were electric with no direct greenhouse gas emissions

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 26: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report26

CEDIT ndash Creative Composition

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 27: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 27

Workforce Composition

In 2016 the workforce included 27 people with disabilities 6 women and 21 menBearing in mind the job descriptions arising from the specific industrial sector the breakdown between men and women is in line with the industry average Male office workers and executives earn an average of 10 more than women for jobs of equal responsibility Among blue-collar workers the difference is 7 The company had a total of 29 foreign employees 24 at Fiorano and 5 at Mordano

Manager Executive Office worker

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 2 3 3 3 3 1 1 1 137 142 133 149

Men 18 21 20 18 21 24 25 28 127 132 128 132

Total 20 24 23 21 24 25 26 29 264 274 261 281

Office ancillary Blue-collar worker Total

2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

Women 18 16 25 19 226 219 212 196 385 381 375 368

Men 64 68 79 64 376 358 356 377 607 603 607 619

Total 82 84 104 83 602 577 568 573 992 984 982 987

Social Responsibility

Employees amp Corporate welfare

Its employees are the heart and soul of Florim they provide its character and its DNA Since 2009 when the current major economic crisis began Florim has undertaken a number of income support programs for its workforce Below we summarise some of the ongoing programmes and others run in 2016bull Ending of the Income Support Program for the Mordano plantbull Agreement with Sassuolo Hospital under which Florim employees and their family members enjoy discounts and shorter waiting times for specialist examinations and outpatient diagnostic tests performed on a private basisbull Special agreements with local health facilitiesbull Tax advice at special rates bull Special terms for banking services with financial consultants on-sitebull Discounts on the purchase of Florim products for employees homesbull Free entry to the Peggy Guggenheim Collection in Venice for employees and concessions for family membersbull Free provision of water and mineral salts in the plants during the summerbull Distribution of fuel vouchers to employees for the Christmas holidays

Summer Play Schemes and Cregraveches

In 2016 the summer play schemes for the children of employees at Fiorano and Mordano were continued for the fifth year in succession Seven different centers across the area between Modena and Bologna hosted 85 children (twice the number of the previous year) the company paid the fee for two weeks attendanceWhats more since 2013 the company has negotiated special terms with local cregraveches which now offer a number of places for employeesrsquo children at a reduced fee

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 28: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report28

Human Resources Management Policies

In July 2015 on renewal of the in-house supplement to the national employment contract the Management introduced a new phase in its relations with the Trade Unions with the aim of continuing and improving the good relationships enjoyed for decadesThe new company contract applied for all employees at the Fiorano headquarters includes more facilitations for part-time working the willingness to allow flexitime where feasible and the commitment to invest in staff training in order to generate full benefits from intellectual capital The company and the trades unions agreed on a plan to improve efficiency fundamental for maintaining the current level of competitiveness by establishing improvement in Production Efficiency and EBITDA as criteria for the payment of the new Performance Bonus The individual Attendance Score is considered together with these parameters The 2016 Performance Bonus in its first year of application was 20 higher than that paid in 2015 In addition in response to employees requests the Company increased the number of approved canteens extending the choice available and also introduced weekly laundering of work clothing for all production workersWith regard to applications for severance pay advances the Company confirms its commitment to continuing the policy implemented so far

Training

Florim believes that in-house training plays a key role in the companyrsquos development and provides a tool for stimulating and fulfilling the potential of its human resourcesMore than 10600 training hours were provided in 2016 to 847 people with an average of more than 11 hours of training per employee New projects included a 6-month on-line English language course which attracted a large number of participants and two highly structured training courses for the sales division and the communication department A retraining program for workers at the Mordano plant was also completed it comprised 4 technical courses attended by 31 people for an average of 13 hours per person Another new entry for 2016 was an innovative procedure for acquiring information about training needs using an on-line questionnaire available to all employees as well as line managers specific recommendations The Master in Florim project is discussed in depth in the specific section

Health and Safety

Florim was the first Italian ceramics manufacturer to receive BS OHSAS 18001 (Occupational Health amp Safety Assessment Series) certification from TUumlV this international standard certifies the implementation of an internal management system oriented towards occupational health and safetyThis major award confirms the companys constant commitment to the well-being of its employees Every year in addition to engineering inspections and machinery maintenance a number of hours of safety training are organised to raise awareness among workers and supervisors Specifically in 2016 2849 hours were dedicated to safety training and a significant reduction in injury rates was recordedMoreover BLSD refresher courses are continuously held for the team of Florim employees trained in first-aid operations and the use of the defibrillators available on site

2012 2013 2014 2015 2016

Number of workplace injuries 63 62 74 56 43

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 29: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 29

The Master in Florim organized for the fourth time in 2016 is a vocational training project which aims to bridge the gap between education (high school or university) and the world of work The program which is one of the companys Social Responsibility projects sets out to help young people to get to know the company through a well structured work experience plan It offers a distinctively northern European approach with a method which alternates classroom teaching with internships in the various areas of the company Participants new university or high school graduates specialising in various subjects all below 30 years of age are therefore able to gain hands-on experience of all Florim departments from RampD to the production process and product distribution for an all-inclusive vision The MASTER courses ambitious aim is to match the individual participants talents with the companys real needs At the end of each edition the company hires all or some of the selected candidates enabling it to acquire new skills new experiences and new energy

Master 40 in figures

20 young people taking part6 months of training13 external lecturers264 hours of classroom teaching392 hours of practical training4 company visits (Ferrari Tetrapak Cremonini and Ducati)50 days of work experience on rotation involving 15 departments1 month of project work

The projects prestige is enhanced by its economic context since Florim pays the young participants for the entire period and its aim is to deal with the thorny problem of youth unemployment The Master has won approval from various faculties at major Italian universities The project was also a winner in the Emilia-Romagna Regions 2016 awards for Corporate Social Responsibility projects run in the local community A prize in the ldquoBusiness and Educationrdquo category was assigned to the Master project which aims to give young people the skills required for sustainable development

Master in Florim

2016 Sustainability Report

Watch the videoof the 4th edition

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 30: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report30

Local Community amp Culture

This chapter describes a number of programs Florim runs for the local community in the area where it originated and where it has been working for more than 50 years

Politecnico di Milano

Since the 20052006 academic year Florim has been a partner sponsor of a large number of Postgraduate Courses run by POLIDesign the Politecnico di Milano consortium which organizes its Master Degree coursesAlso in association with POLIDesign since 2012 Florims Milan showroom has hosted several design events for architects and designers of every nationality

Aziende modenesi per la RSI

ldquoAziende Modenesi per la RSIrdquo an independent open inclusive association of companies in the Modena area which believe in the principles and values of Corporate Social Responsibility was established by public deed on 30 September 2014 with Florim as a founding member Florim hosts the associations member companies every year to discuss the various topics proposed

Premio Lucchese

The Premio Lucchese presented for the twenty-ninth time in 2016 was established in memory of Giovanni Lucchese and consists of scholarships awarded to students at the ldquoAlessandro Voltardquo Technical High School in Sassuolo who graduate with full marks The award ceremony held every year at the Florim Gallery in association with Societagrave Ceramica Italiana of Bologna includes a talk given by a leading personality on a topic of current interest to an audience of eager young listeners

Intrapresaelig 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 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

Fondazione Ing Giovanni Lucchese

More than thirty years after the untimely death of Giovanni Lucchese ndash founder of what was then Floor Gres currently Florim ndash in 2013 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 and the Florim HealthampTraining Center described in more detail below

The main projects undertaken in 2016 include the funding of the purchase of 10 defibrillators for the Municipality of Fiorano and the contributions made to the purchase of paediatric ambulances for the local area and to support the Parish charitable organizations and social services in the district

Watch the Premio Lucchese video

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 31: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

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 people and community thanks to the coming-together of a ceramic coverings manufacturer and the public-private joint venture Ospedale di Sassuolo Spa Florim HealthampTraining is the synthesis of this idea an experimental center which promotes local training for healthcare and other staff health education and information advanced medical simulation and research

The Center

On the main Florim site and opened on 16 April 2014 the Center is 550 square meters in area and contains a modular lecture theatre able to seat over 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 Advanced simulation is a major aid to maintaining the skills of emergency healthcare workers with a particular focus on pediatric and neonatal resuscitation

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 bi-monthly ldquoHealth meetingsrdquo 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 2016 the Center hosted 13 meetings on a variety of topics attended by about 1000 people including employees their family members and the community at large

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 world-famous American Heart Association (AHA) is the oldest and most respected American voluntary organization dedicated to the fight against cardiovascular diseases and strokes In 2015 the AHA via the Simaid International Training Center named the Florim HealthampTraining Center as an Authorized Training Site for basic and advanced cardiopulmonary resuscitation

Florim HealthampTraining Center

2016 Sustainability Report

Watch the Health amp Training Center video

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 32: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report32

Product Responsibility

Here we summarize the concept of Made in Florim denoting a product that encapsulates the companys core values passion innovation a constant commitment to improvement and corporate social responsibility

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 protects the consumerrsquos safety The presence of the CE Marking on packaging guarantees that Florim products comply with the relevant regulatory requirements

Ecolabel (EC Regulation 662010) 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 The certified Florim collections are Architech Ecotech Reverse Walks 10 by Floor Gres and Pietra del Nord under the Rex brand

Several ceramic tile collections bearing the Florim 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 is a member of the US 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 projects 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 has achieved the prestigious Greenguard certification for all its 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 peoples 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

Beyond the standardsMade in Florim products are a guarantee of safety highly innovative content and eco-friendliness The people who produce them work in a safe place and in ethically sustainable conditions Due to their nature all Florim 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 Groups Internet sites and collection catalogues contain the technical data sheets which detail the product information (slip-resistance breaking strain abrasion resistance etc) for every collection as well as its recycled material content with the relative certificates

During the period under consideration no banned products were placed on the market and the company was not found guilty of any breaches of the law with regard to data protection or its marketing and communication activities

EU Ecolabel nr IT2104

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 33: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 33

Quality SystemThe 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 realise products that always satisfy the customerrsquos needs Further to the 2016 audit Florim obtained the renewal of its UNI EN ISO 90012015 certification for the design manufacture and sale of all categories of ceramic tile

Objective Indicator 2012 2013 2014 2015 2016

Continual improvement of control of the production process

Percentage of First Grade Product ()

924 943 942 952 956

Quality rate () 883 905 903 905 909

Scrap rate () 44 41 42 42 49

Productivity (sq mhour) 186 188 186 190 200

Improvements in sales performance and customer satisfaction

Innovation rate () 330 296 367 455 364

Coverage () 795 714 814 813 816

Total portfolio shippable within one month ()

911 837 888 893 897

Optimization of range and stocks

Obsolete stock () 172 126 165 120 69

Stock turnover rate () 13 15 16 15 16

Gradual elimination of disputes complaints and claims concerning service

Square meters affected by complaints ()

17 12 08 12 09

Complaints by number of order items ()

10 11 11 10 10

Gradual improvement in staff skill levels

Employee turnover () 15 23 04 04 12

KeyPercentage of first grade product percentage ratio between the square meters of first grade products and the total square meters transferred to stockQuality rate percentage ratio between the square meters of first grade product transferred to stock and the square meters leaving the pressesScrap rate percentage difference between square meters of material leaving the presses and square meters of product actually transferred to stockProductivity ratio between the square meters transferred to stock and the total hours worked in the plantInnovation 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 salesCoverage percentage ratio between square meters available for immediate shipment and the square meters on orderTotal portfolio of orders shippable within one month percentage ratio between the square meters which can be shipped in 30 days and the square meters on orderObsolete 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 stockSquare meters affected by complaints percentage ratio between the square meters affected by complaints and the square meters soldComplaints by number of order items percentage ratio between the number of complaints and the number of items orderedEmployee turnover percentage ratio between the number of employees leaving the company and being replaced and the workforce at the start of the year

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 34: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report34

Casamood - Neutra 60 Collection

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 35: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 35

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

Relaunch of the ldquoCEDIT ndash Ceramiche drsquoItaliardquo brand OBJECTIVE ACHIEVED

Launch of the FLORIM stone brand OBJECTIVE ACHIEVED

Installation of a new latest-generation kiln at the Mordano plant OBJECTIVE ACHIEVED

Transfer of the Moscow showroom to new premises SCHEDULED FOR 2017

Creation of a new gatehouse at the Mordano plantOBJECTIVE POSTPONED TO GIVE PRIORITY TO THE CONSTRUCTION OF THE NEW FACTORY

Introduction of ERP system at Florim USA OBJECTIVE ACHIEVED

Installation of a new spray dryer and raw material handling system at Florim USA

OBJECTIVE ACHIEVED

Economic Responsibility

Renewal of certification of the Florim environmental and energy management system

OBJECTIVE ACHIEVED

Award of new certifications for collections manufactured with a high recycled material content

OBJECTIVE ACHIEVED

Continuation of work to reduce environmental impacts at Mordano especially with the reduction of energy costs

OBJECTIVE ACHIEVED

Continuation of the work to remove asbestos cement roofing materials at the Mordano plant

OBJECTIVE ACHIEVED

Expansion of the system which conveys rainwater to the treatment plant OBJECTIVE ACHIEVED

Reduction of the noise emissions of the air filtering systems OBJECTIVE ACHIEVED

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

OBJECTIVE ACHIEVED

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

OBJECTIVE ACHIEVED

Environmental Responsibility

Running of fourth edition of Master Florim course with new procedures OBJECTIVE ACHIEVED

Creation of an internal refreshment area for the Fiorano office staff OBJECTIVE ACHIEVED

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

OBJECTIVE ACHIEVED

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

OBJECTIVE ACHIEVED

Organization of new community events at Florim Gallery OBJECTIVE ACHIEVED

Organization of Florim Family Day 2016 A PARTY WAS ORGANISED FOR EMPLOYEES

Social Responsibility

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 36: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report36

The targets we set for ourselvesWe aim to achieve the following objectives in 2017

Economic Responsibility

Construction of a new factory at Mordano to produce large slabs

Launch of the project to unite the Florim spa sales organizations

Total restyling of the corporate and brand Internet sites

Launch of the HUB project - Intranet CRM Marketing Automation

New plants at Florim USA a press two sorting lines a polishing and rectifying line

New working spaces and cloakrooms for technical staff at the American plant

Environmental Responsibility

Purchase of a new cogenerator for the Mordano plant

Introduction of a new rainwater collection system at Fiorano

Land reclamation project involving covering of the Rio Spezzano stream at Fiorano

Implementation of new software for continual monitoring of energy impacts at Fiorano

Modernisation of the compressor room to improve energy impacts at Mordano

Increase of recycling targets through constant awareness-raising amongst all staff and optimisation of recycling facilities

Continuation of replacement of the diesel forklift trucks for use on outdoor yards with electric vehicles

Social Responsibility

Improvement of corporate welfare through the activation of new free services and discounts tailored to employees needs

Continuation of the health meetings for the local community in association with Ospedale di Sassuolo Spa

Organization of new community events at Florim Gallery

Organization of a new event for Florim spa employees

New offices for hospitality and events staff at Fiorano

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 37: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 37

FLORIM USA

Profile and Economic ResponsibilityFlorim USA with registered office at Clarksville - Tennessee - and its subsidiary Florim Solution Inc have been part of the Florim Group since 2000 The Florim USA manufacturing plant one of the largest most technologically advanced in the United States produces porcelain stoneware tiles for the residential market and undertakes commercial projects in North America During the last few years Florim USA has implemented a growth and process optimization strategy which has generated significant technological progress with more innovations planned for the future The strategy adopted will put Florim USA at the worldwide state of the art in porcelain stoneware tile manufacture

In 2016 of the 18 million USD invested 147 was allocated for installation of a latest-generation raw material handling system and a large spray-dryer with an innovative sorting system Improvements were made to other parts of the process to increase their efficiency leading to a further reduction in emissions and scrap rates Additional investments are planned during 2017 to continue this dual trend of rising production with mitigation of environmental impact

The new Florim Flagship Store in New York (152 Madison Avenue 32nd Street)

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 38: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report38

Environmental ResponsibilityFlorim USA implements the same environmental policy as Florim and is committed to achieving the following objectives

bull reduction of the energy used in the production processbull improvement of the waste management process with a focus on recovery and reusebull introduction of new more eco-efficient technologiesbull adoption of integrated management systems

Florim USA has been pursuing a strategy of careful management of its operations and environmental impact for a number of years Here we summarise the main actions taken and the results achieved in 2016

bull installation of a latest-generation spray-dryer in 2016bull installation of an innovative raw material handling system in 2016bull 100 recycling of wastewater within the processbull optimisation of the management of water bottles with elimination of about 34200 of them per annumbull reuse of almost all production scrap (+99)bull 157000 kg of cardboard recycled in 2016bull award of two different types of product certificationbull 9300 kg of plastic recycledbull recycling of 17 complete trucks of pallets

Environmental Projects and Awards

Florim USA has received Clarksville Montgomery County Green Certification (CMCGC) CMCGC is a program designed to help companies learn and implement best practices in the area of environmental stewardship to sustain the local communityrsquos resources through a series of free workshops taught by local environmental specialists Since 2014 Florim has allocated some of its Environment Managers time for the running of these workshopsFlorim USA earned this green company certification thanks to a large number of projects first and foremost the one which eliminated the use of disposable water bottles replaced with individual reusable bottles provided by the company and a series of fill-up stations About 34200 bottles are removed from the waste cycle every year

During the latest phase of its plant optimization Florim USA has implemented a thorough construction material reuse policy In the various stages of demolition of the old plants including the old storage silos the concrete debris was recovered and reused in other construction worksThis project alone generated 11500 tons of recycled aggregate as well as several hundred tonnes of metal sold to a recycling firm

Environmental management system and eco-compatible products

Florim USArsquos products help builders and designers to meet the requirements for sustainable buildings as defined by the United States Green Building Council (USGBC) through the LEED Green Building Rating System This protocol evaluates and certifies the environmental sustainability of a building as a unit from its design to its day to day management To gain LEED credits many of the Florim USA product lines contain a significant percentage of recycled material (40 or more)This feature contributes to an increase in the LEED score in the projects where these products are installed In 2014 Florim USA together with a large number of other US tile manufacturers and the Tile Council of North America drew up a type III environmental product declaration (EPD) certified under the ISO 14025 standard This ceramic tile life-cycle analysis enables Florim USA products to gain LEED points under the new LEED v4 protocol

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 39: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 39

Water use (gallonsper million square feetof finished tiles)

208137 216246 204962 195280 194268

Energy use

2012 2013 2014 2015 2016

Cubic feet of natural gas per million square feet of finished tiles 9343383 9149721 8331170 8390503 8380000

kWh per million square feet of finished tiles 510972 491171 450594 465976 490300

Emissions

Particulate material lt 21024 tonnes per annum

SO2 (sulphur dioxide) lt 1674 tonnes per annum

VOC (volatile organic compounds) lt 1245 tonnes per annum

NOx (oxides of nitrogen) lt 1501 tonnes per annum

Environmental performance indicators ndash summary

The following are the main environmental indicators related to the impact and performance of Florim USA during 2016

Pre-consumer recycled material

Its internal material recycling processes enable the company to minimise its environmental impact since most of the material which would otherwise be sent to landfills or other waste treatment centers is reusedbull Wastewater is entirely recycled within the production process without any discharge into the municipal drainsbull The material in the collection bags from the tile body and glaze preparation areas the press and glaze application is entirely recycled within the processbull All scrap fired tiles are entirely recycled within the processbull 157000 kg of cardboard was sold to an external recycled material dealerbull 17 trucks of unusable wooden pallets were sold to a pallet regeneration companybull About 9300 kg of waste shrink-wrap plastic film was recovered and recycled

Post-consumer recycled material

About 82000 kg of glass was removed from the flow of waste destined for the local landfill and recycled within the process Florim USA has signed an agreement with the local landfill for consignment of all the glass it handles which is collected and set aside for recycling

Water use disposal and reuse

The water used during the production process is recycled continually therefore no water is discharged into the municipal drains

The 2016 emissions figures are in line with those for previous years well below the standards laid down

Water use 2012 2013 2014 2015 2016

Water use (gallons per million square feet of finished tiles) 216246 204962 195280 194268 203928

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 40: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report40

Social Responsibility

Employees

The Florim USA workforce comprises 348 staff employed at the production site the Clarksville and Nashville outlet stores and the Florim Solution offices Of the 348 employees 273 are blue-collar workers and 75 office staff 5 employees are Italians on secondment to the United States Florim USA offers a number of benefits to full time employeesbull health and dental care insurancebull Vision insurancebull life insurance for employees and optionally for family membersbull temporary and permanent disability supportbull employee pension plan

2012 2013 2014 2015 2016

Workplace injuries 50 41 22 29 27

The Employee Assistance Program (EAP) also offers support to employees and their families in the event of psychological difficulty or other problems that can have a negative impact on their quality of life Florim USA supports all the costs of the program

Equal opportunities

Florim USA provides equal opportunities in all employment practices to all qualified employees and applicants regardless of race colour religion gender national origin age disability or membership of the armed forces or any other category protected by federal state or local laws

Health and safety

FLORIM USA is committed to ensuring a safe healthy workplace for all employees It therefore replaces old and obsolete equipment with new technologically more modern machinery and updates safety plans as new information gradually becomes availableAs well as an internal supervisor Florim USA has also appointed a health and safety committee which constantly monitors the plans effectiveness and makes any changes requiredThere are currently 20 plant employees who hold CPRfirst aid qualifications They occupy a variety of positions and work different shifts within the plant and have volunteered to attend training courses sponsored by the company for the award of these qualifications

Training

In 2016 every Florim USA employee attended an average of about 25 hours of training The training provided covered the operating procedures for the new equipment the main safety plans and the procedures for use of existing equipment for new employeesAll new staff undergo specific training for their department focusing on the safety-related aspects of the department concerned as well as more generalized safety training

Some of these themes includebull safe correct use of forklift trucksbull training on work in confined spacesbull shutdownwarning procedures and safe electrical practicesbull safe lifting procedures

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 41: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 41

Florim USA ndash (Clarksville Tennessee)

For employees wishing to continue their education Florim USA offers assistance through the Educational Assistance Program It provides aid with the cost of education and textbooks and is available for any employee wishing to study for a technical qualification a diploma or a degreeThe plant staff training and education plan also includes various training schemes at Florim Italy where employees are instructed in the use of new equipment before it is installed at the American plantThroughout 2016 Florim USA will continue to provide a free e-learning course on its website for architects engineers and contractors (AEC) to improve their knowledge of sustainable porcelain stoneware tiles

Employee welfare activities

Florim USA employee picnic - In 2016 the company once again 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 days enjoyment Within the event participants received prizes in the form of vouchers and gifts

Employee anniversary dinner - 2016 again saw the usual dinner to honour Florim USA employees with 5 10 15 20 or more years of service A special evening event was held in the presence of the Chairman and the other managers to celebrate the loyalty and hard work these employees have contributed during their careers with the firm

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 42: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report42

Local Community

During 2016 Florim USA continued to provide its support to a number of projects in its local areaSome of the main projects include

Scholarships - As part of its work to support the local community Florim has an established scheme which awards scholarships to deserving students at the Austin Peay State University in memory of Florim Group founder Giovanni Lucchese In December 2016 a delegation of Florim representatives attended a scholarship presentation lunch at the Austin Peay State University hosted by the President of the University

Montgomery County Green Certification Program - Florim USA staff actively participate in the Montgomery County Green Certification Program which aims to help companies learn and implement best practices with regard to safeguarding the environment and environmental resources

Donations - In 2016 the company again made a large number of donationsbull book collection for the Austin Peay State University Employees made a generous donation of used books in good condition for children and young people of the APSU in the hope of further promoting the education of future generationsbull to Community Cares the national organization that promotes the acceptance and social inclusion of individuals with Downs Syndromebull to the Aspire Clarksville Foundation a 501(c)(3) charitable foundation whose mission is to continuously improve the economy and the livability (quality of life) of the community by attracting significant capital investment and expansion by businesses and corporations thereby creating better opportunities and higher paying jobs for residentsbull to the Alzheimerrsquos Association a non-profit voluntary organization dedicated to the care and support of Alzheimers Disease sufferers and research into the condition Its aim is to eliminate the disease through the advancement of research to provide and enhance care and support for all affected and to reduce the risk of dementia through the promotion of brain health

Other activities - Every year Florim USA participates in the United Way Drive initiative to support local non-profit organizations which provide economic assistance and psychological support to persons in difficulty

Florim USA provides regular support to the Salvation Army by collecting canned foods for persons in needIn 2016 the company again organised a canned food collection for Manna Cafeacute in Clarksville TN Manna Cafeacute is a local non-profit organization based in Middle Tennessee with the primary mission of meeting peoples fundamental need for food before encouraging them to permanently change their lives for the better More than 15 of the population in Montgomery County are affected by food insecurity (about 28000 people) The percentage of children affected is about 215 a third of whom are excluded by income from federal programs such as free school mealsFinally donations were made tobull American Lung Association the leading organization working to save lives by improving lung health and preventing lung disease through research and educationbull Cheer for a Cure an organization that gives money directly to afflicting families who have a loved one suffering from cancer and need assistance to alleviate the added financial stressbull Habitat for Humanity Since 1992 Habitat for Humanity in Montgomery County Tennessee has worked with 93 low-income families with more than 210 children to revitalise various parts of Clarksville-Montgomery County by building new homes

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 43: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 43

Quality SystemFlorim USA works under a Quality System certified to UNI EN ISO 9001 standards The following are some of the figures in brief

Objective Indicator 2012 2013 2014 2015 2016

Optimisation of control of the production process

Percentage of First Grade Product ()

932 917 940 949 9510

Quality rate () 883 857 893 906 909

Scrap rate () 56 65 48 45 45

KeyPercentage of first grade product ratio between square feet of first grade material and total square feet transferred to stockQuality rate ratio between square feet of first grade material transferred to stock and square feet pressedScrap rate ratio between square feet pressed and square feet of product actually transferred to stock

Other ActivitiesFlorim USA and trade shows

In 2016 Florim USA participated at a number of shows and events including Coverings the AIA Tennessee Convention Hardscape North America Total Solutions Plus Neocon International Pool - Spa and Patio Expo These events targeted at the various categories of industry professionals such as dealers and designers gave Florim USA the opportunity to present its new range of indoor and outdoor products

Design Center

In December 2015 Florim USA opened a design center showroom in Nashville (TN) in a strategic location close to the airport and the city center With a spacious area to host individual CEU presentations and workshops this design center has the potential to be a major resource for local architects In 2016 it was also awarded the ldquoOutstanding Boothrdquo booth prize at the 33rd edition of the Annual Home Decorating and Remodeling Show The location is the ideal place for sharing ideas finding inspiration and putting professionals and architects in touch with each other

Florim Nashville Design Center

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 44: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report44

GRI International Sustainability Indicators SDGsThe information below illustrates the correspondence between the Florim (Italian companies) 2016 Sustainability Report the GRI-G4 guidelines and the icons of the Sustainable Development Goals (SDGs) definitively adopted by the United NationsA description of the SDGs is available at wwwglobalcompactnetworkorg

GRI indicators

Description Page Reference to SDGs

1 Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization 5

2 Organization profile

G4-3 Name of the organization 2

G4-4 Primary brands products andor services 9

G4-5 Location of the organizations headquarters 9

G4-6 Number and names of the countries where the organization operates 9

G4-7 Nature of ownership and legal form 14

G4-8 Markets served 9

G4-9 Scale of the organization 8 8

G4-10 Significant changes regarding size structure or ownership 8

G4-11 Employees covered by National Collective Bargaining Agreement 27

G4-12 Describe the supply chain 16

G4-13Significant changes regarding the organizationrsquos size structure ownership or its supply chain

Reporting process

launched

G4-14 Precautionary principle 22

G4-15 List of external commitments in which the company is involved 22 32 33

G4-16 Associations or interest groups in which the company is involvedwwwflorimit gt

about us gt partnerships

3 Identified material aspects and boundaries

G4-18 Process used to define the report content 6

G4-19 Material aspects 16

G4-20 Boundaries of each material aspect 6

G4-21 Boundaries of each material aspect outside the organizationPartial reporting

(pages 6 16)

G4-22 Explanation of the effect of any restatements of information provided in previous reports 6

G4-23Significant changes from previous reporting periods in the scope boundaries or measurement methods

6

3 Stakeholder engagement

G4-24 List of stakeholders 15

G4-25 Identification of stakeholders 15

G4-26 Stakeholder engagement 6 16

G4-27 Key topics and concerns that have been raised through stakeholder engagement 16

4 Boundary of the Report

G4-28 Reporting period 6

G4-29 Date of publication 2

G4-30 Reporting cycle 6

G4-31 Contacts and addresses for additional information 46

5 GRI Content Index

G4-32 Reporting option chosen 6 7

G4-33 External assurance of ReportThe Report is not

externally assured

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 45: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 45

GRI indicators

Description Page Reference to SDGs

6 Governance

G4-34 Governance structure 14

7 Ethics and integrity

G4-56 Values principles standards and norms of behavior 13 16

Economic performance indicators

EC1 Direct economic value generated and distributed 19 25789

EC5 Wages 27 158

EC7 Development and impact of infrastructure investments and services supported 23 24 31 257911

Environmental performance indicators

G4-EN2 Percentage of materials used that are recycled input materials 17 22 23 812

G4-EN3 Energy consumption within the organization 24 781213

G4-EN6 Reduction of energy consumption 17 24 71213

G4-EN7 Reductions in energy requirements of products and servicesPartial reporting

(page 22)71213

G4-EN8 Total water withdrawal by source 17 23 6

G4-EN10 Percentage and total volume of water recycled and reused 17 21 23 612

G4-EN11 Biodiversity 23 615

G4-EN15 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN16 Total indirect greenhouse gas emissions by weight 25 3121315

G4-EN19 Reduction of greenhouse gas emissions 8 24 1315

G4-EN21 NOx SOx and other significant air emissions 25 31215

G4-EN22 Total water discharge by quality and destination 23 6

G4-EN23 Total weight of waste by type 17 22 3612

G4-EN27 Impact mitigation of environmental impacts of products and services 23 68121315

G4-EN29 Monetary value of significant fines 22 16

G4-EN30 Significant environmental impacts of transporting products and goodsmaterialsPartial reporting

(page 25)111213

Social performance indicators

G4-LA1 Total number and rates of new employee hires and employee turnoverPartial reporting

(pages 17 27)8

G4-LA6 Workplace injury ratesPartial reporting

(page 17)38

G4-LA9 Average hours of training per year per employee 28 48

G4-LA12Composition of governance bodies and breakdown of employees according to gender age group etc

27 58

G4-LA13 Ratio of basic salary and total remuneration of women to men 27 5810

Society

G4-SO1 Operations with local community engagement 12 31 16

G4-SO3 Operations assessed for risks related to corruptionPartial reporting

(page 13)

Product responsibility

G4-PR1 Assessment of health and safety impacts for improvement 23 32

G4-PR3 Type of information about products and services required by the procedures 32 12

G4-PR5 Proceedings relating to customer satisfaction including surveys conducted to measure it 33

G4-PR6 Sale of banned or disputed products 32

G4-PR8 Number of substantiated complaints regarding breaches of privacy 32 16

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

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Page 46: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report46

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 feedback

To keep up to date with our business

Spazio CEDIT - interior (Milan)

wwwflorimiten

Florim Ceramiche

Florim4Architects

Florim_ceramiche

Florim Ceramiche spa

Florim Ceramiche

Florim Ceramiche

For any further information please feel free to contact our communications department comunicazioneflorimit

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 47: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 47

Premio Lucchese - Florim Gallery (Fiorano Modenese - Modena Italy)

Intrapresaelig Guggenheim Collection - Massimo Bottura in Florim Gallery (Fiorano Modenese - Modena Italy)

Panathlon Christmas Gala - Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 48: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report48

White Christmas Party - Florim Gallery (Fiorano Modenese - Modena Italy)

Cersaie - Mario Biondi in Florim Gallery (Fiorano Modenese - Modena Italy)

Dal buio alla luce - Social event at Florim Gallery (Fiorano Modenese - Modena Italy)

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 49: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report 49

Florim Gallery entrance (Fiorano Modenese - MO)

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1
Page 50: Sustainability 2016 - florimmediaserver.blob.core.windows.net · 8 2016 Sustainability Report Giovanni Lucchese pioneers the production of extruded clinker tiles and Floor Gres is

2016 Sustainability Report52

Florim Ceramiche spaVia Canaletto 24 - 41042 Fiorano Modenese (Modena Italy) - Tel +39 0536 840111 - wwwflorimit

  • Segnalibro 1