STEICO : Annual Report 2023 incl. Consolidated Financial Statements, Group Management Report and Report of the Administrative Board

STEICO SE

2023 Annual Report

The green share

2023

2023 - a challenging period which stabilised at the end of year

Natural building products for healthier buildings

Overview

2023 - a challenging period which stabilised at the end of year

2023 Revenue growth in € millions

500
		445.2				-17.9%
400
								365.3
300
200
100
€m
2022	2023
2023 EBITDA growth in € millions
100
			88.6
					-34.9%
80
60											57.7
40
20
€m
		2022	2023

2023 EBT growth in € millions

75

63.7 -62.0%

60

45

30				24.2
15
€m
		2023
2022

2023 Gross Earnings growth in € millions

250		202.0	-17.7%
200
			166.2
150
100
50
€m
2022	2023
2023 EBIT growth in € millions
75
		65.2		-53.4%
60
45
30							30.4
15
€m
		2022	2023

2023 Profit for the Period growth in € millions

5047.9 -64.7%

40

30

20				16.9
10
€m
		2023
2022

| ADDITIONAL KPIS

		2023	2022
1.	Total operating revenue in € millions	€ 356.8 million	€ 467.4 million
2.	EBITDA margin as a percentage of total operating revenue	16.2 %	19.3 %
3.	EBIT margin as a percentage of total operating revenue	8.5 %	13.9 %
4.	Equity ratio (as of 31 December)	53.3 %	53.5 %

Percentage changes and margins are calculated using non-rounded figures.

2 STEICO 2023 Annual Report

2023 Annual Report

2023 was a challenging year for the STEICO Group in many ways. The construction industry suffered throughout Europe due to high inflation and higher interest rates. At the start of the year, disproportionately high levels of inventories at traders and processing companies also dampened demand. What is more, heightened competition on the market for wood fibre insulation materials also depressed sales prices. Growth stabilised again at the end of the year, however the STEICO Group recorded lower sales figures for the first time since going public.

Total revenues fell by 17.9 % to € 365.3 million. EBITDA was down by 34.9 % year-on-year to € 57.7 million and EBIT fell by 53.4 % to

• 30.4 million. The profit for the period was down by 64.7 % to
• 16.9 million year-on-year.

The company's management is taking a cautious view of the further course of the year, however it believes that the market will continue to stabilise.

If the continued economic and competitive developments do not result in any negative effects, the management is forecasting revenue at the previous year's level of around € 365 million and an EBIT ratio of between 9 % and 11 % (to total operating revenue).

Company profile

STEICO develops, produces and markets ecological construction products made of renewable raw materials. STEICO is the global market leader for wood fibre insulation materials.

STEICO is positioned as a system provider for ecological residential construction and is the only manufacturer in the industry to offer an integrated wooden construction system in which innovative wooden construction components and ecological insulation material supplement each other.

Laminated veneer lumber and I-joists form the structural components of the system. The insulation materials include flexible and stable wood fibre insulation panels, facade insulation materials, as well as cavity wall insulation made of wood fibres and cellulose.

Disclaimer

Sealing products for the building shell complete the overall system.

The STEICO Group offers its customers a unique range of products through to the prefabrication of complete components for timber element construction.

The Munich-based company's products are used in new construction and when renovating roofs, walls, ceilings, floors and facades. STEICO's products allow the construction of future-proof, healthy buildings with a particularly high quality of living and a healthy atmosphere. STEICO's products offer reliable protection against cold, heat and also noise, and they permanently improve the building's energy efficiency.

This document is a translated version of the German original document. The translation has been prepared with utmost care. However, only the German original document is binding.

STEICO 2023 Annual Report

3

Foreword

Udo Schramek

CEO / Chairman of the Managing Directors

Dear business partners,

2023 marked a strategic milestone for the STEICO Group. STEICO has a strong, international partner on board after the acquisition of a 51% interest in its shares by the Irish Kingspan Group. This also opens up new and attractive growth opportunities for STEICO.

We, and also Kingspan's management, are convinced that biologically based insulation materials will play a key role in the mix of various insulation technologies. Wood-fibre insulation materials are the dominant natural insulation materials, have a unique benefits provile and also make a major contribution to climate protection. They not only help to cut CO2 emissions by making buildings more energy-efficient and thus reducing energy requirements for heating and cooling. The wood used in the insulation materials also binds the CO2 that the trees absorbed from the atmosphere while they were growing. This CO2 storage makes natural insulation materials and wood-fibre insulation materials in particular so special.

However, these perspectives for the future should not cloud the fact that 2023 was the most difficult year for STEICO for a very long time. For the first time since going publich STEICO was not able to grow, and had to accept lower revenues. The prevailing mix of inflation and higher interest rates had a massive impact on construction activities throughout Europe. At the same time, pressure on sales prices from increased competition also grew. STEICO has never experienced such a sharp turnaround in its economic environment. The entire team pulled together to help STEICO adapt to the changed market conditions and end the year with positive earnings. Thanks to all of you for your excellent work!

Now we are working on getting back to on-track growth. STEICO enjoys an excellent position, offers future-oriented solutions and has state-of-the-art production facilities. The new site in Gromadka is ready for going live, and the Group also has sustainable growth reserves which will secure STEICO's leading role as the construction economy continues to stabilise.

Please allow me to end this introduction with a few personal words: I will resign from my position as STEICO's CEO in the summer of 2024 and take my retirement after more than 38 years with the company. Working for the company has been a pleasure. STEICO has a highly competent and visionary successor as CEO - Ms. Aiveen Kearny. I wish her and the STEICO team the greatest success. I know from many of our shareholders that they have supported STEICO throughout the years - through our highs and lows. Thank you all for your loyalty. The future for STEICO isexciting - we have so many new ideas!

Yours sincerly

Udo Schramek

4 STEICO 2023 Annual Report

2023 Annual Report

Contents

CONTENTS

Report by the Administrative Board	6
Growth of STEICO's shares	9
Group management report of STEICO SE	10
A	Fundamentals	10
B	Economic report	13
C Opportunity and risk report, forecast	22
Consolidated income statement	31
Consolidated balance sheet	32
Consolidated cash flow statement	34
Consolidated statement of changes
in shareholders' equity	35
Notes to the consolidated financial statements	36

1. General information on the consolidated

	financial statements	36
II.	Information on the consolidated balance sheet	40
III.	Information on the consolidated income statement	44
IV.	Information on the consolidated cash flow statement	45
V.	Other disclosures	45
Independent auditor's opinion	49

STEICO 2023 Annual Report

5

Report by the Administrative Board

Dear business partners, dear shareholders,

The overall economic situation in 2023 dampened the general economy and the construction sector in particular, and faced the STEICO Group with great challenges. The company had to record lower sales figures for the first time since going public. Despite initial signs of stabilisation, the group will continue to be in a difficult environment in 2024. The Administrative Board and the company's management are thus focusing all of the Group's resources on reinforcing its operating business. In this connection, the Administrative Board will make a

recommendation­to the General Meeting that no dividend should be paid for 2023. On the whole, STEICO's natural and energy efficient­ products­ are excellently positioned on the market. The ­company's management and the Administrative Board thus believe that, if construction activities revive, there will be above-average growth in demand.

The STEICO Group is planning to further increase its revenues and market shares in the coming years, in particular as a result of its higher production capacity, and this in particular in view of the newly constructed production sites in Poland. In the view of the company's management, the Group will benefit from central development opportunities such as an integrated ­insulation and construction system, a high level of vertical integration, the launch of new products, further internationalisation and process optimisation and increased efficiency. The strategic alliance with the new majority shareholder Kingspan will bring positive opportunities for growth in this regard.

The Administrative Board would like to issue a special vote of thanks to the STEICO team, in which each individual contri­ butes to our overall success thanks to their daily commitment.

MANAGEMENT AND MONITORING BY

THE ADMINISTRATIVE BOARD

In 2023 the Administrative Board fully performed all of the tasks and obligations required by the law and the articles of association It defined the fundamental principles of the company's activities and monitored their implementation by the Managing Directors. The Administrative Board was included directly in all decisions which were of fundamental importance for the company.

To the extent that approval by the Administrative Board was required for decisions or activities by the company's management according to the law, the articles of association or the by-laws, the corresponding resolutions were only passed after these issues had been discussed in detail with the Managing Directors.

The Managing Directors reported regularly, in good time and in detail to the Supervisory Board according to Section 40 (7) of the SEAG in connection with Section 90 of the AktG on the course of business and the general position of the company and the group including the net assets, financial position and results of operations. In addition, in-depth discussions were held in particular concerning business policy and the company's strategic further development. The Administrative Board was also informed about the risk position and risk management.

The Managing Directors regularly submitted an in-depth report to the Administrative Board detailing the course of business, including the growth of revenues, earnings and liquidity, and also on the position of the company and the group companies­ Differences in the course of business were discussed in detail. The Administrative Board discussed in detail all business trans­ actions of importance to the company on the basis of the reports of the Managing Directors and contributed its own ideas. The Managing Directors provided additional information at the Board of Director's request. The Administrative Board was also consulted on special transactions which were of major importance for the company. In addition, the Chairman of the Administrative Board was in regular contact with the Managing Directors and received regular reports on the company's growth and he reported to the Administrative Board on the information obtained.

KEY AREAS OF DISCUSSION IN THE

ADMINISTRATIVE BOARD

In fiscal year 2023 the Administrative Board held five face-to-face meetings. With the exception of the meeting on 12 May 2023, at which one member was not able to attend after providing prior notice, all of the members of the Administrative Board attended all of the meetings. The Managing Directors participated in the meetings of the Administrative Board to the extent not otherwise determined by the Chairman of the Administrative Board.

In the first meeting for the fiscal year on 28 February 2023 the Administrative Board agreed the business plan for 2023

6 STEICO 2023 Annual Report

2023 Annual Report

Report by the Administrative Board

for the company and the group. In addition, it also received reports on the budget for the Gromadka site. What is more, it also reworded the rules of procedure for Managing Directors with regard to currency hedging.

In its meeting on 5 May 2023 the Administrative Board dealt, in particular, with STEICO SE's annual financial statements, the dependent companies report and the consolidated financial statements as of 31 December 2022 as well as the respective management reports. This meeting also dealt with the report of the Administrative Board for fiscal year 2022. In addition the proposed resolutions for the company's ordinary general meeting on 23 June 2023 were passed. What is more the Managing Directors reported in detail on currency hedging transactions. As a result of the current situation it also discussed the challenges in the group's financing. Finally there was also a detailed report on investments, in particular construction progress at the Gromadka site.

In the meeting on 23 June 2023, the Managing Directors welcomed the newly elected, unchanged Administrative Board, and Mr. Udo Schramek was re-elected as chairman and Prof. Heinrich Köster was elected as deputy chairman. The Managing Directors also reported in detail on the subject of currency hedging.

In the meeting on 20 September 2023 the Managing Directors reported in particular on the current status of the group's financing and on the pending commissioning of the first plants at the Gromadka site. In addition Mr. Udo Schramek informed the Administrative Board of the sale of 51 % of shares in STEICO SE by Schramek GmbH to the Kingspan Group.

The last meeting of the year on 8 December 2023 dealt with issues including an in-depth discussion of the risk management report by the Managing Directors, which forms part of the early warning system set up according to Section 22 (3) of the SEAG. In so doing, the Administrative Board made sure that developments which could endanger the company's continued­ existence can be recognised at an early stage. However there were no such developments. What is more, the Managing Directors reported in particular on the investments and the current status of the Gromadka site. The Administrative Board revised the distribution of business in the rules of procedure for Managing Directors due to the exit of Mr. Uwe Lange and the arrival of Mr. Roger Fränkel.

AUDIT OF THE ANNUAL AND CONSOLIDATED FINANCIAL STATEMENTS

The annual financial statements and the managing report as well as the consolidated financial statements and group ­management report as of 31 December 2023 were prepared by the Managing Directors according the regulations of the Handelsgesetzbuch­ (HGB - German Commercial Code). The firm of auditors (Deloitte GmbH Wirtschaftsprüfungsgesells chaft, Munich) audited the annual financial statements and

management­report of the company as well as the consolidated­ financial statements and group management report, discussed this in the audit reports and issued both the annual financial statements as well as the consolidated financial statements with an unqualified auditor's opinion. Performance of the audit and the audit reports correspond to the statutory requirements in Sections 317, 321 of the HGB. The company's annual financial statements and management report and the group's ­consolidated financial statements and group management report as well as the proposal by the Managing Directors for the use of the profits and the auditors reports by the auditors were passed on to the Administrative Board in good time. The auditors participated in the meeting to discuss the financial statements and responded extensively to questions and reported in detail on the course and results of the audit of the annual financial statements and consolidated financial statements.

The Administrative Board reviewed the annual financial state- ments, the consolidated financial statements and the associated management reports. As there were no objections, the board concurred with the results of the audit by the auditors and approved the annual financial statements and consolidated financial statements. The annual financial statements were thus adopted. The Administrative Board also approved the management reports.

The Administrative Board reviewed the proposal for the

appropriation­of profits while considering the company's financial position and the expectations of shareholders and the ­capital market, and discussed this with the Managing Directors. It then concurred with the Managing Directors' proposals for the appropriation of profits.

STEICO 2023 Annual Report

7

Report by the Administrative Board

AFFILIATED COMPANIES REPORT

The Managing Directors prepared the report on affiliated companies (dependent parties report) for fiscal year 2022. Accordingly, the company received reasonable compensation in each case for the transactions presented with affiliated companies.

The dependent parties report was audited by the auditor and issued with the following unqualified auditor's opinion:

"After our proper audit and assessment we confirm that

1. The facts in the report are correct and
2. The company's payments for the transactions listed in the report were not unreasonably high."

Both the dependent parties report and also the audit report were received by the Administrative Board in good time. After the conclusive results of its own review, the Administrative Board raised now objections to the affiliated companies report and the final statements it included from the Managing Directors.

Feldkirchen, 25 April 2024

Paul O'Gorman

Chairman of STEICO SE's Administrative Board

8 STEICO 2023 Annual Report

2023 Annual Report

Growth of STEICO's shares

A. SHARE PRICE GROWTH IN 2023

STEICO's shares started the year with a price of € 44.50 on 2 January (Xetra closing price). The highest price for the year was € 56.30 on 15 February. The share price fell in the weeks following STEICO falling victim to a cyber attack at the start of March 2023. The share price recovered temporarily in connection with the sale of the majority of shares in STEICO SE before a profit warning was issued on 21 June causing the share price to slump. Growth was uneven during the following months. The shares recorded their lowest price for the year on 25 October at € 21.95 shortly after the report on figures for the third quarter was published. The share price also benefited from the stabilisation of the market towards the end of the year. STEICO's shares closed at a price of € 33.40 in Xetra trading on 29 December 2023. This corresponds to a drop of 24.4 % over the year as a whole.

STEICO's shares: development 2023

70 €
			STEICO SE
60 €
50 €
40 €
30 €
20 €
10 €
10 €

.2023	.2023	.2023	.2023	.2023
.01	.03	.06	.09	.12
02	31	30	29	29

B. INVESTOR RELATIONS

As was the case in previous years, STEICO SE engaged in open and direct communication with the capital markets in 2023, and was also in close contact with its shareholders. In 2023, in addition to the transparency policies for the Basic Board and m:access, STEICO SE fulfilled its publication requirements, for example with end-to-end communication in German and English and the regular publication of quarterly reports. In addition, up-to-date press releases and financial reports are also always published on the Web site www.steico.com/ir. Information on key events is disseminated via a well-known institution to comply with publicity obligations.

C. CAPITAL MARKETS DIARY 2023

5/6 January 2023	STEICO presented the company at the ODDO BHF Forum (Lyon, France)
7 February 2003	Publication of initial figures for 2022 as well as the outlook for 2023
16	March 2023	STEICO presented the company at the Berenberg EU Opportunities Conference (London, UK)
14	May 2023	Publication of the 2022 annual report and Q1 2023 report
16	May 2023	STEICO presented the company at the Morgan Stanley Conference Enablers
of a Sustainable Built Environment (virtual conference)
15/16 June 2023	STEICO presented the company at the Warburg Highlights Conference (Hamburg, Germany)
23 June 2023	STEICO's Annual General Meeting
24 July 2023	Publication of H1 2023 report
6 September 2023	STEICO presented the company at the Commerzbank / Oddo BHF Corporate Conference (Frankfurt/Main, Germany)
18	September 2023	STEICO presented the company at the Berenberg / Goldman Sachs Corporate Conference (Munich, Germany)
12 October 2023	STEICO presented the company at the m:access specialist conference for technology (virtual conference)
18	October 2023	Publication of Q3 2023 report

STEICO 2023 Annual Report

9

Group management report for fiscal year 2023

STEICO SE, Feldkirchen

A. FUNDAMENTALS

1. THE STEICO GROUP'S BUSINESS MODEL

1. OVERVIEW

STEICO develops, produces and markets ecological construction products made of renewable raw materials. STEICO is, in its own opinion, the global market leader compared to the relevant competitors in terms of revenues for wood fibre insulation materials.

STEICO is positioned as a system provider for ecological residential construction and is - according to the Managing Directors - the only manufacturer in the industry to offer an integrated wooden construction system in which wooden construction components and insulation material supplement each other. These include flexible wood fibre insulation materials, stable insulation boards, wood fibre insulation boards for facade insulation (ETICS external thermal insulation compound system), air-injected insulation made of wood fibre and cellulose as well as system-based products for insulating the building shell. The construction elements comprise I-joists and laminated veneer lumber. In addition, the STEICO Group also produces natural fibre boards (hard fibre boards) and was involved in timber wholesale in 2023. In the UK the group's product range also includes products for ceiling and floor construction.

The STEICO Group's production equipment also enable a wide variety of specialty products to be produced, such as door panels, pinboards, etc. which can be sold to a wide variety of industries.

2. THE STEICO GROUP'S PRODUCTS AND SERVICES

The STEICO Group is a system provider for natural construction products for insulation and construction. The core product range comprises "natural wood fibre insulation materials". In 2023 the bulk of revenues (65.4 %) were generated with ecological wood fibre insulation materials and air-injected insulation for insulating buildings and floors.

The STEICO Group's current range of products and services comprises:

Wood fibre insulation materials

STEICO's insulation materials are made of fresh softwood. These are used for new construction and renovation, where they protect against heat, cold and noise.

Wood fibre insulation materials are produced at the manufacturing subsidiaries using various methods - including the wet and dry method. In both methods, wood is broken down into individual fibres using steam and mechanical treatment. The fundamental difference between the two methods is that in the wet method the wet fibres are processed (formed into boards) whereas in the dry method the fibres are dried to form boards. In the dry method, depending on the technology used, the fibres can be used for air-injected insulation, flexible (compressible) mats or rigid insulation boards.

Air-injected insulation

Air-injected insulation comprises individual insulation fibres or flakes which are blown into the building's cavities under high pressure, where they then compress. The STEICO Group produces and sells air-injected insulation made of wood fibres and cellulose flakes.

Construction products: Laminated veneer lumber (Laminated Veneer Lumber)

Laminated veneer lumber is a high-performance timber material comprising several layers of lumber veneer which are glued together. It is characterised by its particularly great rigidity and ability to bear loads while still offering dimensional stability. Laminated veneer lumber is used in construction as well as for industrial applications (for example in making doors and furniture). It forms a key component of I-joists (flange material).

Construction products: I-joists

I-joists are supporting components which are optically very similar to traditional double-T-joists. They comprise two "belts" (square timber posts made of laminated veneer lumber) which are connected using a fibreboard. Some of the bridge material is purchased (OSB: Oriented Strand Board), but the majority is produced in-house (Natural Fibre Boards). STEICO's I-joists offer an alternative to standard construction products such as construction lumber or laminated timber in terms of both their price and energy consumption.

Special products

The special products segment bundles all of the products that the group produces itself which are not directly allocable to the construction sector. These include, for example, fibreboards for pinboards or door fills, as well as other products for industrial applications.

10	STEICO 2023 Annual Report