SOL S.p.A.: The Italian Gas Giant That Bet on Healthcare

I. Introduction & Episode Roadmap

The Borsa Italiana trading floor buzzes with the usual cacophony of European markets, yet few investors pause to consider the unassuming ticker SOL.MI. With a market capitalization of roughly €5 billion, this Monza-based company represents one of the most fascinating strategic puzzles in European industrial markets: how does a regional Italian gas company not only survive but thrive in an industry where global titans control over 80% of the market?

With a 2022 turnover of €1.38bn, SOL Group is present in 32 countries with more than 5,700 employees, over 50,000 industrial customers, 500 major medical customers and over 580,000 patients served daily. Those patient numbers tell a story that most industrial gas analysts miss entirely. This isn't your typical commodity gas play.

The core puzzle is almost comically asymmetric. The five largest players are Air Liquide (France), Linde plc (UK), Air Products and Chemicals, Inc. (US), Messer SE & Co. KGaA (Germany), and Nippon Sanso Holdings Corporation (Japan). These five companies account for about 80–84% of the total market share. Against this Goliath-dominated landscape, SOL has carved out something remarkable: a differentiated business model that transforms its apparent weakness—lack of global scale—into strategic advantage.

Vivisol, the home healthcare subsidiary of Italian gases group SOL SpA, is now a leading provider in Europe, and has been clocking in at around 70% of group EBIT. That statistic deserves emphasis. A company born to manufacture oxygen and acetylene now derives the overwhelming majority of its operating profit from caring for patients in their homes. That makes the shares one of the purest European plays on the growing trend for health authorities to de-hospitalize parts of in-patient care.

How did a gas company become one of the purest healthcare plays on the European exchanges? The answer involves nearly a century of family stewardship, a pivotal bet made in 1989, an IPO designed to preserve family control while funding international expansion, and a relentless acquisition strategy funded entirely through internally generated cash flow. It's a masterclass in counter-positioning, geographic niche focus, and patient capital deployment.

---

↑ Back to Top

II. Origins: The Founding Vision (1927–1950s)

Picture Monza, Italy, in 1927—a city known for its medieval cathedral and proximity to Milan, but increasingly recognized as a center of northern Italian industrialism. Mussolini's government was aggressively promoting industrial self-sufficiency, and the demand for welding gases was surging as Italy modernized its manufacturing base.

SOL was formed in 1927 by Giovanni Annoni and Aldo Fumagalli from Monza, who started up two factories to produce oxygen and acetylene, one in Leghorn and the other in Ancona. The choice of locations was strategic—two major port cities with access to growing industrial corridors. Oxygen and acetylene form the foundational combination for oxyacetylene welding, the dominant metalworking technology of the era.

The SOL Group was founded under the management of Giovanni Annoni and Aldo Fumagalli, with two initial plants for the production of oxygen and acetylene based in Livorno and Ancona. These weren't industrial tycoons or financial engineers—they were entrepreneurs who understood the practical requirements of Italian manufacturing. Their insight was simple but profound: industrialization requires reliable access to gases, and whoever can supply those gases reliably builds enduring customer relationships.

The timing was propitious but the challenges immense. Between 1927 and the early 1950s, Italy experienced fascist rule, World War II, Allied bombing campaigns, postwar reconstruction, and eventually the economic miracle. Gas production facilities require significant capital investment and face substantial operational risks. Many industrial enterprises founded in this era did not survive.

What allowed SOL to persist through these tumultuous decades was the combination of family commitment and the essential nature of their products. Industrial gases aren't discretionary inputs—manufacturers who need oxygen for steel production or acetylene for welding cannot simply defer those purchases. This demand resilience, which would prove crucial throughout SOL's history, provided the company with steady cash flows even during economic dislocations.

The founding families—Annoni and Fumagalli—established a partnership structure that would prove remarkably durable. Rather than pursuing external capital or selling to larger competitors (a fate that befell many regional gas companies across Europe), they maintained operational control and reinvested profits into expanding capacity. This patient, family-oriented approach to capital allocation would become a defining characteristic of SOL's corporate DNA.

What matters for investors: The founding period established three patterns that persist today: family control, essential-product positioning, and capital discipline. Nearly a century later, SOL has been quoted at Milan Stock Exchange since 1998 and is still controlled and managed by the Annoni and Fumagalli families who founded it in 1927.

---

↑ Back to Top

III. Building the Italian Franchise: Second Generation (1950s–1980s)

The transition from founding generation to successors often proves fatal for family enterprises. SOL's second generation not only maintained the company but transformed it from a regional supplier into Italy's leading independent gas company.

Alessandro and Renzo Annoni, Giulio and Ugo Fumagalli Romario, the second generation, launched an ambitious project for the innovative development of SOL: these were the years of the first technical gas production plants, located close to the Group's major key customers, such as steelworks and glass-makers.

This decision to locate production facilities adjacent to major customers reflected sophisticated understanding of industrial gas economics. Gases are expensive to transport relative to their value, which means local production creates substantial competitive advantages. A gas supplier located near a steel mill can offer more reliable delivery, lower prices, and better service than a distant competitor.

The Italian economic miracle of the 1950s and 1960s created explosive demand growth. Italian steel production, automotive manufacturing, and industrial output expanded dramatically, and SOL rode this wave by systematically expanding its production footprint across northern Italy.

SOL became a leading player in the sector in Italy thanks to the transition from a regional market strategy to a national one. This was made possible by embracing the major transformations taking place in the technical gas industry at the time due to the development of technologies for the storage and distribution of gases in cryogenic liquid state.

The shift to cryogenic liquid storage represented a technological inflection point in the industrial gas industry. Previously, gases were primarily distributed in cylinders—heavy, expensive to transport, and limited in capacity. Cryogenic liquefaction allowed gases to be stored and transported in bulk at dramatically lower cost per unit. Companies that mastered this technology could serve larger customers more efficiently and build denser distribution networks.

SOL's investment in cryogenic capabilities during this period created lasting competitive advantages. The dense distribution network they built across Italy remains defensible precisely because it would be prohibitively expensive for a competitor to replicate.

By the 1980s, SOL had established itself as the leading Italian independent in technical gases. The company had survived the "anni di piombo" (years of lead)—Italy's turbulent 1970s marked by terrorism, economic instability, and social unrest—and emerged with a strong market position and healthy balance sheet.

Then came the pivotal strategic decision: geographic expansion. The Group also began to grow in Europe, creating plants, branches and joint ventures in most European countries over the years. Rather than remaining an Italian champion vulnerable to eventual acquisition by a global giant, SOL chose to become a European player itself.

What matters for investors: The second generation transformed SOL from a regional supplier into Italy's leading independent gas company by investing in technology (cryogenic storage), building dense distribution networks, and beginning European expansion. These investments created the operational foundation that would support the company's later healthcare pivot.

---

↑ Back to Top

IV. The Strategic Pivot: Birth of Vivisol (1989)

Every great business story has an inflection point—a moment when management makes a bet that transforms the company's trajectory. For SOL, that moment came in 1989 with the founding of Vivisol.

SOL was one of the first companies in Europe to introduce a new form of treatment, developed in the US, for patients affected by serious respiratory disorders. This treatment involves significant quantities of oxygen and a highly specialist Home Care service.

The insight seems obvious in retrospect: oxygen isn't just an industrial commodity—it's a life-saving medical therapy. Patients with chronic respiratory conditions like COPD (chronic obstructive pulmonary disease) require supplemental oxygen to survive. Traditionally, this meant extended hospital stays. But a new model was emerging from the United States: home oxygen therapy, which allowed patients to receive treatment in the comfort of their own homes while dramatically reducing healthcare costs.

Our firm was established by the SOL Group in 1989. Today, with over 35 years of experience in the field, we have become one of Europe's largest home care groups. In particular we specialise in the respiratory field with oxygen therapy, mechanical ventilation, diagnosing and treating obstructive sleep apnea, as well as artificial nutrition, telemedicine, medical assistance, care services and infusion therapy.

Why was this decision contrarian? Most industrial gas companies viewed medical gases as a small, low-margin commodity segment—essentially the same product sold to a different customer at similar prices. The home healthcare model was different: it required building relationships with health authorities, training technicians to work in patients' homes, developing logistics systems for regular deliveries, and navigating complex regulatory environments. This was a service business, not a commodity business.

SOL's competitors largely ignored the opportunity. The global giants were focused on their core industrial markets, where scale advantages were most pronounced. For a company like Air Liquide or what would become Linde, building a fragmented home healthcare business across dozens of European markets represented distraction from their primary competitive arena.

For SOL, the calculus was different. Unable to compete with global giants on scale in industrial commodities, the company needed differentiation. Home healthcare offered higher margins, more defensible customer relationships, and growth driven by powerful demographic tailwinds rather than industrial cycles.

The legacy business is the provision of oxygen but, over the years, Vivisol has branched out into multiple areas such as sleep apnoea treatment, medical nutrition, wound-care, paramedical services etc. Patients under its care have grown from around 140,000 in 2010 to close to 600,000, driving a steady sales CAGR of close to 10% pre-pandemic.

The expansion from oxygen therapy into adjacent healthcare services follows a classic "land and expand" model. Once Vivisol established relationships with health authorities and built logistics capabilities for oxygen delivery, adding complementary services became relatively straightforward. Sleep apnea treatment, for example, leverages similar distribution networks and regulatory relationships while addressing a massive underdiagnosed condition.

In a demographic context characterised by progressive population ageing and in an epidemiological panorama marked by an increase in the major chronic diseases, the role of Home Care Providers becomes increasingly relevant for the optimised management of chronic patients, who often suffer from multiple conditions as well as vulnerability.

The macro tailwinds are almost impossibly favorable. Europe's population is aging rapidly—According to a report "Ageing Europe-statistics on population developments" published by Eurostat in November 2023 provided statistics that the population of older people (defined here as those aged 65 years or more) in the EU-27 will increase significantly, rising from 90.5 million at the start of 2019 to reach 129.8 million by 2050. During this period, the number of people in the Europe aged 75-84 years is projected to expand by 56.1%, while the number aged 65-74 years is projected to increase by 16.6%. This significant growth in the elderly population will drive demand for home healthcare services, as more individuals will require home-based care and support.

Healthcare systems across Europe are simultaneously under pressure to reduce costs, and home care is significantly cheaper than hospital care. A Mount Sinai Medical School paper concludes that costs for HaH in their sample of patients were 20% to 30% lower than those for hospital care, and the HaH page on the Johns Hopkins website talks about lower mortality, better functional outcomes, lower average length of stay, lower incidence of delirium and less caregiver stress.

What matters for investors: The 1989 founding of Vivisol represents SOL's most important strategic decision. By pivoting from industrial commodity supplier to healthcare services provider, SOL created a differentiated business model that would eventually generate approximately 70% of group EBIT. This counter-positioning against competitors focused on industrial markets has proven remarkably successful.

---

↑ Back to Top

V. Going Public & Third Generation (1998)

July 1998 marked another inflection point: SOL's listing on the Milan Stock Exchange. But this wasn't a typical IPO story of founders cashing out or venture capitalists seeking exits. It was a carefully structured transaction designed to fund international expansion while preserving family control.

Parent company SOL Spa has been listed on the Italian Stock Exchange since July 1998.

In order to be more competitive on the international markets, the Parent company SOL Spa was listed on the Milan Stock Exchange. The arrival of the third generation of the Annoni and Fumagalli Romario families at the helm of the company, together with a young executive management team from outside the families, allowed the Group to pursue its internationalisation strategy.

The timing was significant. The late 1990s saw aggressive consolidation in the industrial gas sector, with larger players acquiring regional competitors. SOL faced a strategic choice: sell to a global giant or access public capital markets to fund independent growth. The families chose the latter.

The IPO structure preserved family control while raising expansion capital and providing liquidity for family members. This hybrid model—public listing with family control—has proven remarkably stable. Nearly three decades later, the founding families remain in charge.

Matteo Fumagalli Romario represents one of the 6 family members of the third generation of the Annoni and Fumagalli families working daily in SOL Group. The third generation brought fresh perspective while maintaining continuity with the company's established values and strategy.

The decision to bring in professional management alongside family leadership proved prescient. Family businesses often struggle with the tension between family loyalty and professional meritocracy. SOL resolved this tension by maintaining family involvement at the board level while recruiting talented executives from outside the family to manage operations.

The IPO also coincided with the beginning of SOL's aggressive international expansion. Access to public equity markets provided both the capital and the credibility needed to pursue acquisitions across Europe. The company could now offer stock as acquisition currency and demonstrate to potential targets the benefits of joining a publicly traded group.

The contrast with industry consolidation is striking. The industry is already largely consolidated: Linde, Praxair, Air Products and Air Liquide together control about 85% of worldwide revenue from industrial gases, according to Silver. 'There will now be [only] three companies competing in this industry on a global basis,' he says.

The Linde-Praxair merger in 2018 (forming the current Linde plc) epitomized this consolidation trend. S&C represented Praxair, Inc. (U.S.) in its $80 billion merger of equals with Linde AG (Germany), creating the world's largest industrial gas supplier. This transaction reduced the number of truly global competitors from four to three.

SOL's response to industry consolidation was strategic patience rather than panic. Rather than selling to a consolidator or attempting to become a global player, SOL doubled down on its differentiated strategy: healthcare services and geographic niches where global giants had limited presence.

What matters for investors: The 1998 IPO provided SOL with access to public capital markets while preserving family control. This structure has proven stable for nearly three decades and enabled aggressive international expansion without compromising the company's long-term orientation.

---

↑ Back to Top

VI. European Expansion & Geographic Strategy (2000s–2010s)

SOL's international expansion followed a distinctive playbook: target markets where global giants had less presence, acquire regional players, and integrate them into the SOL system while preserving local management.

6 december 2002 Acquisition of 80% of Slovenian Company ENERGETIKA d.o.o. Jesenice, within the privatisation process of Slovenske Zelezarne d.d. This Slovenian acquisition was characteristic of SOL's approach. Eastern European markets, emerging from decades of communist rule, offered opportunities for well-capitalized Western companies willing to invest in modernization. Global giants were often focused on larger markets; SOL could move faster and offer more attractive terms to local management teams.

The energy hedge represents another dimension of SOL's strategic sophistication. Industrial gas production is energy-intensive—air separation units require substantial electricity to operate. Companies exposed to energy price volatility face margin pressure when electricity costs spike.

The Group entered the renewable hydroelectric energy production sector, acquiring and developing hydroelectric power plants in Albania, Bosnia Herzegovina, Macedonia and Slovenia.

Today 16 are the hydroelectric power plants, amounting to a total installed capacity of around 31 MW, located in Slovenia, Albania, Bosnia Herzegovina and Macedonia. The electricity produced and sold on the grid totalled 327,920 GJ in 2021, corresponding to 13% of the Group's energy consumption.

This vertical integration into energy production serves multiple purposes. It provides a natural hedge against electricity price volatility—when power prices rise, SOL's hydroelectric plants generate profits that offset higher production costs in the gas business. It also generates sustainable energy, supporting ESG objectives that are increasingly important to institutional investors and healthcare customers.

The UK market entry demonstrates SOL's ability to penetrate developed markets through targeted acquisitions. In 2010 Dolby Medical became the newest addition to the VIVISOL family and Dolby Vivisol was born.

Vivisol UK is a provider of Home Healthcare services specialising in respiratory care. We offer a range of services including home oxygen therapy; of which we currently hold four of the NHS regional contracts for providing this service to around 20,000 patients.

The NHS contracts are particularly significant. Government healthcare systems provide stable, long-term revenue streams with creditworthy counterparties. Specifically, has been recently confirmed that Vivisol Dolby has been awarded 3 regional contracts, for oxygen home care services, related to 3 regions out of the 8 that issued the tenders for these services during 2019. The abovementioned regions cover about the 80% of the whole English territory.

SOL's partnership model deserves attention. Rather than acquiring companies outright and replacing local management, SOL typically acquires majority stakes while keeping founders involved. This approach preserves local knowledge and relationships while providing SOL with control and consolidation benefits.

Vivisol is present in most of Western Europe (also Poland, Turkey, Brazil), and is leader in respiratory homecare in Italy, Belgium and the Netherlands, as well as no 2 in the UK.

What matters for investors: SOL's geographic expansion strategy targets markets where global giants have limited presence, acquires regional leaders while preserving local management, and hedges energy costs through vertical integration into hydroelectric power. This approach has built significant market positions across Europe without requiring the massive capital outlays needed to compete head-to-head with global players.

---

↑ Back to Top

VII. The Healthcare Transformation (2010s)

By the 2010s, the transformation was accelerating. What had begun as a side business in 1989 was becoming SOL's primary profit engine.

Building on its experience in the creation and management of cryobanks for the preservation of biological material, the Group entered the biotechnology sector in 2010. The biotechnology expansion demonstrated SOL's willingness to explore adjacent opportunities that leveraged existing capabilities.

Growth has come both organically and through acquisitions, for which SOL has never tapped shareholders, funding its expansion with its own means. Acquisitions often bring new healthcare skills, and synergies from the exploitation of relationships with health authorities in geographies where Vivisol has a strong position.

This capital allocation discipline deserves emphasis. SOL has funded its entire acquisition program through internally generated cash flow, never issuing equity to finance deals. This approach requires patience—the company can only acquire what it can afford—but preserves shareholder value by avoiding dilution.

The strategic logic of healthcare services becomes clearer when comparing SOL to Air Liquide, the European leader in industrial gases. In 2019, this specialty accounted for 18% of Air Liquide's Gas & Services revenue. In 2022, home healthcare activities represented more than 50% of Air Liquide's Healthcare revenue.

The European leader in home healthcare is Air Liquide, but it is a much bigger company than SOL, which means that the incidence is much lower.

This relative positioning is SOL's key competitive insight. Air Liquide is larger in absolute terms, but healthcare represents a much smaller portion of its overall business. For SOL, healthcare is existentially important; for Air Liquide, it's one business among many. This asymmetry of attention creates opportunities for SOL to invest more aggressively and execute more effectively in home healthcare.

The expansion into orthopedics illustrates SOL's service diversification strategy. The Group strengthened its presence in the orthopaedic sector thanks to a majority partnership with ITOP Spa OFFICINE ORTOPEDICHE, a leader in Italy in the design and production of custom-made aids, prostheses and orthoses.

Custom prosthetics and orthoses might seem distant from oxygen therapy, but the underlying business logic is similar: deliver healthcare services to patients in their homes, leverage relationships with health authorities and insurance systems, and build defensible positions through specialized expertise and logistics capabilities.

What matters for investors: The 2010s saw SOL's healthcare transformation accelerate, with Vivisol becoming the primary profit driver. The company's discipline in funding acquisitions through internal cash flow has preserved shareholder value while building significant market positions across Europe.

---

↑ Back to Top

VIII. German CO2 Market Entry (2014+)

While healthcare absorbed most of management attention, SOL continued pursuing strategic opportunities in its traditional technical gas business. The German CO2 market entry exemplifies this approach.

SOL SpA announces an important investment completed today, acquiring 100% of the share capital in Tyczka Kohlensäure GmbH & Co. KG ("TKS") and 50% of the share capital in CT Biocarbonic GmbH ("CTB") from the Tyczka Group. TKS and CTB recorded a turnover of about € 13,5 million in 2013. TKS operates in the production and distribution of liquid carbon dioxide (LCO2) in Germany, owning a production plant for natural CO2 in Burgbrohl. TKS is the third player in the Liquid CO2 German market with a market share of about 11%.

Germany represents Europe's largest economy and a critical market for industrial gases. However, competing head-to-head with Linde (a German company) and Air Liquide in bulk industrial gases would be suicidal. SOL instead identified a niche—CO2 production—where market fragmentation created roll-up opportunities.

The purchase of TKS and CTB will expand SOL Group presence in Germany, already valued more than € 80 million with 350 employees.

The biogenic CO2 angle adds a sustainability dimension. CropEnergies AG, Mannheim, and Tyczka Energie GmbH, Geretsried, are planning to build a plant for the liquefaction of food quality CO2 (carbon dioxide) in Zeitz, Saxony-Anhalt, Germany. The plant will have an annual production capacity of 100,000 tonnes of carbon dioxide and is scheduled to commence operation in 2010. The construction and operation of the liquefaction plant will be undertaken by the newly formed joint venture CT Biocarbonic GmbH, Zeitz, in which each partner holds a 50 percent stake.

Biogenic CO2 is produced from renewable sources (in this case, bioethanol fermentation) rather than from fossil fuel combustion. This positions SOL's German CO2 business favorably as customers increasingly prioritize sustainable supply chains.

With the acquisition of the German company SKS, SOL became one of the most important players in the market for CO2 production in Germany.

The German CO2 strategy demonstrates SOL's ability to identify and execute niche roll-ups even in markets dominated by global competitors. By focusing on a specific product segment where fragmentation persisted, SOL built meaningful market share without directly challenging Linde's core business.

What matters for investors: SOL's German CO2 acquisitions illustrate the company's approach to industrial gas markets: identify fragmented niches, execute disciplined roll-ups, and build meaningful positions without directly challenging global giants.

---

↑ Back to Top

IX. Global Expansion: India, China, Brazil (2010s–Present)

SOL's expansion beyond Europe targeted high-growth emerging markets, primarily in healthcare services where the company's expertise provided competitive advantage.

India

On the 07th of May 2010 at Chennai (India) "SICGILSOL India Limited" was incorporated. The new company is a 50% / 50% JV between Sicgil India Limited and SOL. The joint venture shall enjoy a shared management between SOL and Sicgil through a board formed up by six directors with equal representation.

SOL Group - one of the leading European players in the production of technical, pure, medicinal gases and in respiratory homecare - announces that it has recently increased its shareholding from 50 % to 85 % in the Indian company SICGILSOL, a 50 % – 50 % Joint Venture between SOL and SICGIL, controlled by the Dadabhoy Family. Established in 2010 in Chennai, SICGILSOL has become an important player on the South Indian technical gases market, with an ASU (air separation unit), a nitrous-oxide production, a Helium refilling plant, and multiple filling stations in Tamil Nadu and Gujarat.

Since its inception, SICGILSOL has been a symbol of growth and enterprise for the SOL Group, not only because it was the first entity outside Europe, but also due to the countless activities carried out. SICGILSOL was the first operator in India to make inhaled nitric oxide therapy available and the first to build a medical gas distribution system in accordance with ISO standards and those in force in India.

The Indian expansion followed SOL's established playbook: partner with local entrepreneurs who understand the market, gradually increase ownership as the relationship matures, and leverage SOL's technical expertise to differentiate from local competitors.

Bhuruka Gases Limited, an Indian supplier of specialty, rare, industrials and liquid gas products owned by the Agarwal family, entered into a strategic partnership with SOL S.p.A, based in Italy. Under the partnership agreement, Bhuruka Gases was carved into two entities to unlock maximum value for the promoters: Green ASU (100% acquired by SOL) and Bhoruka Specialty Gases (joint venture between Bhuruka Gases Limited and SOL S.p.A. & Simest S.p.A).

China

SOL Group enters China market, enhancing its strong and growing international presence in medical gases and healthcare services sectors. Finalized the acquisition, for about Euro 18.8 million, of: • 70% of "Shanghai Shenwei Medical Gas co. LTD", • 70% of "Shanghai Mu Kang Medical Device Distribution Service co. LTD.", • 30% of "Shanghai Jiawei Medical Gas co. LTD", three companies controlled by Mr SUN Aiqun, a Chinese entrepreneur.

The August 2021 China entry focused specifically on medical gases and healthcare services—not industrial gases where competition from both global players and local Chinese companies would be intense. This selective approach reflects SOL's strategic discipline.

Brazil

The Group strengthened its international presence in the home care sector: in Brazil, by acquiring the majority of P Par Partecipacoes, heading Global Care Assistencia Domiciliar, Unit Care Servicos Medicos and DN Global Homecare.

The Group strengthens its presence in the home healthcare sector in Brazil by acquiring PRONEP.

Founded in 1992, Pronepo experienced rapid business development in the state of Rio de Janeiro, before expanding into the states of São Paulo (1998) and Espirito Santo (2003), becoming one of Brazil's leading players in the home care market. In 2023, Pronep achieved a total turnover of about Reais 227 million, or about EUR 40.7 million, serving about 2,500 patients, employing 319 direct employees and working with more than 40 insurance companies.

Brazil represents Latin America's largest healthcare market with demographic trends similar to Europe: aging population, rising chronic disease prevalence, and healthcare systems under cost pressure. SOL's home healthcare model translates well to this environment.

What matters for investors: SOL's emerging market expansion prioritizes healthcare services over industrial gases, partners with local entrepreneurs rather than attempting greenfield entry, and focuses on markets where the company's expertise provides competitive advantage. This disciplined approach limits risk while accessing high-growth opportunities.

---

↑ Back to Top

X. COVID-19 Response & Pandemic Era (2020–2022)

The COVID-19 pandemic created both challenges and opportunities for SOL's business. The company's healthcare diversification proved particularly valuable during this period.

The Group provides an effective contribution to the fight against the Covid-19 pandemic by developing and producing rapid serological tests and molecular kits for COVID-19 identification in Italy. It also launches a complete service for analyzing molecular and rapid antigen swabs performed at home.

The pandemic accelerated pre-existing trends toward home healthcare. Hospital systems overwhelmed with COVID-19 patients had powerful incentives to move non-COVID care out of hospitals. Patients, fearful of infection, preferred receiving treatment at home when possible. Health authorities, facing unprecedented budget pressures, became more receptive to cost-effective home care alternatives.

Oxygen demand surged as COVID-19 patients with respiratory complications required supplemental oxygen. SOL's integrated position—producing medical oxygen and delivering it to patients' homes—proved valuable during the crisis.

The pandemic also demonstrated the resilience of SOL's business model. Industrial gas demand declined as manufacturing activity slowed during lockdowns, but healthcare services demand remained robust or grew. Companies heavily dependent on industrial customers faced greater earnings volatility than SOL's diversified model.

What matters for investors: The pandemic validated SOL's healthcare diversification strategy by demonstrating the resilience of home healthcare services during economic disruption. The acceleration of home care trends during COVID-19 may prove a lasting tailwind for Vivisol.

---

↑ Back to Top

XI. Recent Developments & Current State (2023–2025)

The Board of Directors of SOL S.p.A. approved the 2024 consolidated results. In the context highlighted, the SOL Group achieved net sales of € 1,610.4 million, with an increase of 8.3%. On a like-for-like basis, the increase in sales was 6.4%. The Technical Gas Division grew by 1.5% and the Home Care Division, where the Group operates through Vivisol, by 15.7%, of which 3.8% due to the acquisitions made.

The divergent growth rates tell the story: home care growing at nearly 16% while technical gases grow at less than 2%. Vivisol continues to drive SOL's overall growth trajectory.

The Consolidated Net Profit, equal to € 147.7 million and 9.2% of sales, shows an increase of 1.3% compared to prior year.

The Net Debt / Equity ratio, equal to 40.7%, confirms the financial strength of the Group.

These are highlights of the consolidated figures approved today by the Board of Directors of SOL S.p.A., a company listed on the Italian Stock Exchange that acts as holding company of a multinational group, with more than 7,200 employees, primarily involved in the business of technical gases and homecare assistance, operating in Europe, Turkey, Morocco, Brazil, India, China, Ecuador and Peru.

The 2025 first half results demonstrated continued momentum. Net sales achieved by the SOL Group in the first half of 2025 amounted to Euro 874.1 million, up by 12.1% when compared to Euro 779.6 million in the first half of 2024.

Consolidated net profit amounted to Euro 83.5 million, equal to 9.6% of turnover, up 11.5% compared to Euro 74.9 million as at June 30, 2024.

The acquisition pipeline remains active. During the half-year, the subsidiary Airsol Srl acquired 100% of the share capital of "Freyсо Kohlensäure Service GmbH", a German company involved in the production and distribution of technical gases.

The Romanian market entry illustrates SOL's ongoing geographic expansion in home healthcare. SOL Group, a multinational dealing in the technical, industrial and medicinal gases sector, and in the home care sector through Companies identified by the "VIVISOL" brand, announces that it has strengthened its position in Eastern Europe by entering into the Rumanian home care business, through a new partnership. Founded in 2016 by Mr. Catalin Batrinu, who serves as CEO, together with other partners, MEDAIR recorded a rapid development of the business all over the Country, becoming one of the Romanian leading operators in the home respiratory care local market. In 2023 MEDAIR S.r.l. achieved a total turnover of approximately 2.4 million Euros, with a staff of 36 employees.

The SOL Group also looks to 2025 with confidence. Compatibly with the evolution of the war between Russia and Ukraine and the situation in the Middle East, with the trend of energy costs and inflation - concluded Aldo Fumagalli Romario, President of SOL S.p.A. - we will continue our investment and acquisition programs and new partnerships, with the aim of achieving good growth in sales and maintaining profitability at good levels.

What matters for investors: SOL continues executing its established strategy: home healthcare growing significantly faster than technical gases, disciplined acquisitions funded through internal cash flow, and geographic expansion into underserved markets. The financial position remains strong with low leverage supporting continued investment.

---

↑ Back to Top

XII. Playbook: Business & Investing Lessons

SOL's nearly century-long journey offers several lessons for investors and business strategists.

1. The "Adjacent Market" Strategy

SOL's transformation followed a logical progression: start with a commodity (industrial oxygen) → find a higher-value application (medical oxygen) → build services around it (home care) → diversify into related healthcare services (sleep apnea, nutrition, orthopedics). Each step leveraged capabilities developed in the previous stage.

2. Family Control with Professional Management

The arrival of the third generation of the Annoni and Fumagalli Romario families at the helm of the company, together with a young executive management team from outside the families, allowed the Group to pursue its internationalisation strategy.

This hybrid model resolves the tension between family values and professional excellence. The families provide long-term orientation and cultural continuity; professional managers provide operational expertise and fresh perspective.

3. Self-Funded Acquisitions

Growth has come both organically and through acquisitions, for which SOL has never tapped shareholders, funding its expansion with its own means.

This discipline requires patience—the company can only acquire what it can afford—but preserves shareholder value by avoiding dilution. It also imposes acquisition discipline, since management must justify each deal against alternative uses of internally generated capital.

4. Geographic Niche Focus

SOL targets regions where global giants have less presence, particularly Eastern Europe and emerging markets. This approach allows SOL to build meaningful market positions without directly challenging companies with vastly greater resources.

5. Vertical Integration into Energy

Hydroelectric plant ownership hedges energy costs while generating sustainable returns. This vertical integration addresses a key cost driver in industrial gas production.

6. Partnership Model

SOL typically acquires majority stakes while keeping founders involved. This approach preserves local knowledge and relationships while providing SOL with control and consolidation benefits. The Romanian MEDAIR acquisition, the Indian SICGILSOL partnership, and numerous other deals follow this template.

---

↑ Back to Top

XIII. Porter's Five Forces Analysis

1. Threat of New Entrants: LOW

Even though industrial gases is a capital-intensive industry, its companies are quickly able to generate strong returns through economies of scale. See, after the first initial investment of building an ASU, every subsequent sale is pure profit, dropping down to the bottom line.

High capital requirements for air separation units and distribution networks create substantial barriers to entry. Home healthcare services require regulatory approvals, relationships with health authorities, and specialized logistics capabilities that take years to develop.

2. Bargaining Power of Suppliers: LOW-MODERATE

Raw material is literally air—freely available. Energy is the main input cost; SOL's hydroelectric plants provide a partial hedge. Equipment suppliers have some power but multiple alternatives exist.

3. Bargaining Power of Buyers: LOW-MODERATE

The deals usually come with a minimum guaranteed rate of return, and long-term take-or-pay contracts ranging from 10 to 20 years. That means the industrial gas companies will still be compensated for a guaranteed minimum amount of gas supplied, regardless of whether it's actually used, and that helps reduce the risk of the huge upfront investment in the unit itself.

High switching costs for customers (equipment, reliability needs) and the critical nature of gas supply limit buyer power. In healthcare, relationships with health authorities and insurance systems create sticky customer relationships.

4. Threat of Substitutes: VERY LOW

No practical substitutes exist for oxygen, nitrogen, and argon in most applications. Medical gases are irreplaceable for respiratory therapy. Home healthcare services face limited substitution threat given patient preferences and cost advantages.

5. Industry Rivalry: MODERATE (but intense at the top)

After a series of mergers and acquisitions over the last three decades, Linde, Air Liquide, and Air Products are now the top three players in the industry with a collective market share of close to 70%. Even when demand was slow in 2008-09, all three companies had strong pricing discipline, which meant that margins and returns were much more resilient compared to other industries.

The industrial gas market is highly consolidated at the top, but SOL competes by avoiding head-to-head competition in commodity bulk gas. In home healthcare, the market remains more fragmented, creating opportunities for well-capitalized acquirers.

---

↑ Back to Top

XIV. Hamilton Helmer's 7 Powers Framework Analysis

1. Scale Economies: PARTIAL

SOL lacks global scale versus giants but has regional scale in Italy and specific European markets. SOL Spa is the Italian leader in the production and marketing of technical, industrial, pure, special and medicinal gases. Dense distribution networks in core markets create local scale advantages that global competitors cannot easily replicate.

2. Network Effects: LIMITED

Industrial gases is not a traditional network effects business. However, home care creates ecosystem effects: more patients → more data → better protocols → better outcomes → more referrals from health authorities.

3. Counter-Positioning: STRONG ✓

This is SOL's primary competitive power.

Global giants focused on industrial commodity gas; SOL pivoted to healthcare services. The European leader in home healthcare is Air Liquide, but it is a much bigger company than SOL, which means that the incidence is much lower.

Air Liquide's activities in the health sector, through Air Liquide Healthcare, represented 18% of its gas and services sales revenue in 2016. Healthcare represents approximately 18% of Air Liquide's business but generates approximately 70% of SOL's EBIT. This asymmetry of attention means SOL can invest more aggressively and execute more effectively in home healthcare without triggering competitive response.

4. Switching Costs: MODERATE-HIGH

Healthcare customers (health authorities, hospitals, patients) face significant switching costs. Equipment installation, regulatory relationships, and service quality concerns make switching providers disruptive and risky.

5. Branding: LIMITED

Industrial gases are commodities where branding provides limited differentiation. In healthcare services, reputation matters more, and Vivisol has built strong relationships with health authorities across Europe.

6. Cornered Resource: MODERATE

SOL's hydroelectric plants represent a cornered resource providing cost advantages and sustainability credentials. Long-term NHS contracts in the UK provide similar quasi-exclusive access to large customer bases.

7. Process Power: MODERATE

SOL has developed distinctive capabilities in integrating acquisitions while preserving local management, navigating healthcare regulatory environments across multiple countries, and building efficient home care logistics networks. These processes are difficult for competitors to replicate quickly.

---

↑ Back to Top

XV. Investment Considerations & Key KPIs

↑ Back to Top

Key Risks

Regulatory Risk: Home healthcare reimbursement rates are set by government health authorities and insurance systems. Rate cuts could pressure margins.

Healthcare Concentration Risk: With approximately 70% of EBIT from home healthcare, adverse developments in this segment would significantly impact overall profitability.

Family Control Risk: Concentrated family ownership may lead to decisions that prioritize family interests over minority shareholders, though the track record has been positive.

Acquisition Integration Risk: Continued acquisition activity requires successful integration of diverse businesses across multiple countries.

Currency Risk: Operations across 32 countries create exposure to multiple currencies, particularly in emerging markets.

↑ Back to Top

Myth vs. Reality

Consensus View	Reality
SOL is an industrial gas company	Healthcare generates ~70% of EBIT
Family control limits growth	Family control enables patient capital allocation
Small size is a disadvantage	Small size enables niche focus and avoids competitive response
European focus limits growth	Emerging market expansion accelerating

↑ Back to Top

Key KPIs to Monitor

1. Vivisol Patient Count Growth: This metric captures the fundamental driver of home healthcare revenue. Growth from 140,000 patients in 2010 to nearly 600,000 today reflects both organic prescription growth and acquisition activity. Deceleration would signal market saturation or competitive pressure.

2. Home Care Division Revenue Growth vs. Technical Gas Division: The divergent growth rates (currently ~16% vs. ~2%) illustrate the strategic transformation. Convergence would suggest either healthcare deceleration or industrial recovery; continued divergence supports the healthcare thesis.

3. Net Debt / Equity Ratio: Currently at 40.7%, this metric indicates capacity for continued acquisitions. Significant increases could signal overextension; significant decreases might suggest slowing acquisition activity.

↑ Back to Top

Comparative Positioning

Company	Healthcare % of Revenue	Geographic Focus	Market Cap
SOL S.p.A.	~55-60%	Europe, Emerging	~€5B
Air Liquide	~18%	Global	~€80B
Linde plc	Small	Global	~€180B
Air Products	Small	Global	~€55B

SOL represents a differentiated exposure to European home healthcare growth within an industrial gas company structure. The valuation reflects this positioning, with the stock trading at a premium to pure industrial gas peers but at a discount to pure-play healthcare services companies.

---

↑ Back to Top

XVI. Conclusion

SOL S.p.A.'s nearly century-long journey from two oxygen factories in coastal Italy to a €5 billion European healthcare leader offers a masterclass in strategic patience, counter-positioning, and disciplined capital allocation.

The founding families recognized early that competing head-to-head with global giants in commodity industrial gases was a losing proposition. Instead, they identified healthcare services as an adjacent market where their gas production capabilities could provide competitive advantage, where customer relationships were stickier, where margins were higher, and where demographic tailwinds would drive decades of growth.

Europe home healthcare market size valued at USD 106.7 billion in 2024, is projected to reach USD 204.4 billion, CAGR of 7.5% from 2025-2033.

SOL has positioned itself as one of the purest ways to play this growth through public equity markets. The company's family control provides long-term orientation; its disciplined acquisition strategy builds market position without diluting shareholders; its geographic focus on underserved markets avoids competitive response from larger players.

The risks are real: regulatory changes could pressure margins, healthcare concentration creates earnings sensitivity to a single segment, and family control may not always align with minority shareholder interests. But for investors seeking exposure to European healthcare demographics through a well-managed, conservatively financed company with nearly a century of operating history, SOL presents a compelling case study in how smaller companies can thrive by choosing their competitive battles wisely.

The Annoni and Fumagalli families bet on healthcare in 1989. Thirty-five years later, that bet generates 70% of the company's operating profit. In business, as in investing, the quality of decisions matters more than the quantity—and SOL's founding families appear to have made an exceptional decision at precisely the right moment.