7. Cost of sales

Cost of sales for the year ended December 31, 2021 amounts to EUR 578,515 thousand (respectively EUR 467,861 thousand in 2020 and EUR 398,518 thousand in 2019), consisting mainly in the cost of materials, components and labor expense related to the production and distribution of goods and services. Cost of sales also include depreciation and amortization of EUR 46,258 thousand (respectively EUR 45,296 thousand in 2020 and EUR 38,497 thousand in 2019).

All Cost of sales items increase in the year ended December 31, 2021 as a result of the significant growth in sales volumes. In particular, the increase in other costs of sales is the direct consequence of the growing revenues in the Engineering Segment that brings to higher industrial overhead for additional facilities as well as to increase of subcontracting work to cope the additional workload with external resources.

Nevertheless, the overall Cost of sales increase by 23.7% for the year ended December 31, 2021, less than proportionally to revenues mainly due to efficiency maximization in production process and better absorption of industrial overheads.