2023

ANNUAL REVIEW

Year 2023	3
Kreate in brief	3
Highlights of the year	4
President & CEO's review	5
Strategy	7
Business	8
Sustainability	11

Investors	14
Kreate as an investment	15
Financial targets	16
Information for investors	17

Corporate governance	18
Corporate Governance Statement	19
Remuneration Report	24
Board of Directors	26
Management Team	27

Financial report	28
Report of the Board of Directors	29
Key figures	38
Calculation formulas	39
IFRS financial statements	40
Consolidated statement of comprehensive income	41
Consolidated balance sheet	42
Consolidated cash flow statement	43
Consolidated statement of changes in equity	44
Notes to the consolidated financial statements	45
Parent company's income statement (FAS)	71
Parent company's balance sheet (FAS)	72
Parent company's cash flow statement (FAS)	73
Accounting policies applied in the parent company's financial statements	74
Notes to the parent company's financial statements	74
Signatures of the Report of the Board of Directors and the financial statements	79
Auditor's note	79
Auditor's Report	80

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Kreate is a Finnish infrastructure construction company that particularly focuses on executing projects that are technically challenging or that require special expertise. We provide versatile solutions for bridges, roads and railways, environmental and foundation construction, the circular economy and geotechnical needs.

In 2023, our consolidated revenue was EUR 320 million and we employed over 450 people. Kreate Group is listed on Nasdaq Helsinki.

Highlights of 2023

Kreate's professionals have worked on more than 100 projects around Finland, building sustainable infrastructure and a better tomorrow every day. Below are a few highlights of the year's successes.

In April, we won the Cross Road Improvement project in Oulu, where we will build 4.5 kilometres of fairway and 10 new bridges, repair 5 bridges and carry out diverse track work. We build on a busy road section close to industry and residential areas, making extensive use of our railway, bridge and fairway expertise. The nearly EUR 30 million contract will be completed by the end of October 2025.

In May-June, Kreate's investments in strengthening railway construction began to show in the growing size and diversity of the winning projects. We won two railway contracts between Kytömaa and Ainola as part of the extensive Helsinki–Riihimäki project, as well as an electric railway contract. The total value of the contracts is approximately EUR 18 million. Kreate Rata Oy was merged with Kreate in May.

In the summer, work was intensively carried out in Sweden on the repair of the Bohusbana tunnels. Kreate entered the Swedish market in autumn 2022 through an acquisition, and a few months later Kreate Sweden signed a major subcontracting contract to renovate 10 tunnels in Bohusbana during summer 2023. Winning the approximately eight million euro contract was a great success, and its implementation on a tight schedule is proof of strong expertise.

At the Kruunuvuori bridge of TYL Crown Bridges, the massive steel beams of the cable-stayed section were lifted into place with the help of a sea crane at the end of July. At its longest, the steel beams were 72.5 metres, i.e. the length of the tower of the Helsinki Stadium, and the maximum weight was 550 tonnes.

In October, the jacking of a rare concrete joint structure was carried out on the Hessundinsalmi bridge in Pargas, Finland. The Kirjalansalmi and Hessundinsalmi bridges renewal project is the largest in Kreate's history. The total cost of the bridge project is approximately EUR 128 million and it will be built in 2022–2026.

In Hyvinkää, the last pile slabs at Kesko's logistics centre received their concrete at the end of October. The exceptionally large casting project lasted 10 months, during which a total of 50,000 cubic metres of concrete was cast, a significant part of which is green low-carbon concrete.

The renewed Veturitie bridge and the widened Veturitie were fully opened to traffic at the beginning of November. During the demolition of the old bridge on Veturitie and the construction of a new bridge three times wider, almost 500,000 train services passed under the bridge construction site, but thanks to our professionals, traffic disruptions were almost imperceptible.

In December, Kreate was included in the development phase of the Koskela depot alliance contract, which strengthens the company strategically also in tramway construction and alliance projects. In terms of railway construction and circular economy, Kreate acts as a partner of the main contractor Skanska in the development phase. The development phase will last until autumn 2024, after which the possible implementation phase will last until spring 2028.

Focus on profitability

There is an old saying that good sailors are known in a storm. The year 2023 tested the industry, but Kreate did very well considering the circumstances. We implemented our strategy strongly and front-loaded, increased revenue by 17% while the market declined and took care of our financial position, as evidenced by our strong cash position. The year 2024 looks bright from Kreate's perspective. The goal is to be more selective and focus on challenging projects that meet our core competence. Instead of increasing revenue, the focus in 2024 will be especially on improving profitability.

Since 2020, the industry, Finland and the world have been plagued by the coronavirus pandemic, Russia's war of aggression, cost inflation and, most recently, rapidly changing interest rates and economic downturn. Construction is one of the industries that has been hit hard by these crises. Against this background, I can be very proud of Kreate's performance in 2023.

In 2023, we implemented the strategy systematically and front-loaded. Our revenue was EUR 320 million, exceeding the EUR 300 million target for the strategy period until the end of 2024. We increased our revenue by 17 per cent from the previous year, while the construction market declined by double digits and infrastructure construction by 4–10 per cent.

The acquisition completed in Sweden in 2022 has also proven successful. The integration process has progressed well and the revenue of our Swedish business has almost doubled compared to the level at the time of the acquisition. Although the short-term outlook for the construction market in Sweden is weak, the rock and concrete construction market, which is essential for Kreate, is expected to develop strongly in the Greater Stockholm and Gothenburg areas also in the coming years.

We have also paid special attention to operational efficiency and profitability in 2023. We were able to maintain good liquidity throughout the year and improve our cash flow towards the end of the year – this is clear evidence of successful working capital management throughout the organisation. We have also sharpened our risk management, and we are more precise in terms of contracts and what projects we offer in general, for example. The increased importance of risk management is well illustrated by, among other things, the fact that in the fourth quarter of 2023, after careful consideration, we did not participate in tenders for projects worth several hundred million euros, as we considered their risk-sharing mechanisms too unfavourable. Healthy business, good order backlog, strong liquidity position and bright outlook give us confidence and peace to wait and choose projects that look like Kreate. Our core competence is technically difficult infrastructure projects that combine high technical challenges with several types of construction, good contract expertise and listening to the customer.

"Expertise is appreciated. It is appreciated by our clients who are satisfied with the end result and Kreate's way of acting according to its values with integrity, ambitious, humane and straightforward manner."

We entered 2024 with confident. We have coped well with the market turmoil and have good visibility into projects starting and underway in 2024. Our order backlog of EUR 196 million is at a sustainable level, although it is lower than in the previous year. It is estimated that EUR 168 million of the order backlog will be recognised as income during 2024. We estimate that in 2024 our revenue will decrease to EUR 270–300 million and EBITA will increase to EUR 8–11 million. Declining revenue and increasing profitability are affected by the fact that we offer projects more selectively.

Bright market outlook

In Finland, the construction market weakened considerably during 2023, and the decline was particularly steep in the second half of the year due to high cost and interest rates, weak confidence, and the economic downturn. However, there is great dispersion within the construction market. While housing construction fell by about forty per cent, infrastructure fell by only five per cent. In addition to being relatively stable, the infrastructure sector is also countercyclical. Towards the end of 2023, our offer calculation picked up and market demand was surprisingly high. There was activity in all customer groups: state, municipalities, and private customers.

I am confident that activity will continue in 2024, driven especially by investment programmes of cities located in growth areas and by state rail investments. In the early part of the year, the public sector is expected to include the Tampere passenger rail yard and the Tampere-Pori and Helsinki-Riihimäki railway projects. There has also been commendable activity in industry, both in terms of the green transition and data center projects. Housing construction still seems very quiet, but public building construction continues to be brisk.

The long-term outlook for infrastructure construction is bright. Major projects are expected in areas such as the Government's transport investment programme and the green transition. Finland's NATO membership and the prevailing geopolitical situation will also increase the need and significance of rail, road and port infrastructure and, for example, airport infrastructure to the north and western borders from the perspective of Finland's security of supply and accessibility. Although the long-term outlook is strongly positive, it is difficult to estimate the size and timing of projects.

Time to celebrate

In 2024, there is cause for celebration. This year marks 10 years since Kreate was founded. In 2014, infrastructure construction specialists Fin-Seula, Kesälahden Maansiirto and Insinööritoimisto S. Rantala combined their expertise to create Kreate. Kreate sounds rough, just like the industry, and also describes how we create and build something new every day. There has also been renewal. In 2017, we expanded into railway construction, in 2018 into rock engineering and in 2022 into demanding underground infrastructure construction in Sweden. At the same time, our joint venture company KFS Finland made two successful acquisitions through the acquisitions of Sotkamon Porapaalu Oy and Nordpile Oy. To date, the companies belonging to the Kreate Group and merged with it have accumulated a total of 271 years of experience.

Expertise stands out. This is reflected in clear division of responsibilities, well-functioning processes and safe operating methods. Last year, Kreate's personnel had two lost-time injuries and our accident frequency was 2.8. Even though every accident is one too many, I am immensely proud of our people and the way we operate. Safety culture and its development are important for any construction company, and this will remain one of Kreate's responsibility priorities also this year. In the future, we will report the combined accident frequency, which means that we will report not only our own accidents but also the accidents of our subcontractors working on our construction sites. I hope that this will contribute to understanding that a shared construction site is a shared workplace and that every accident can be prevented.

Our expertise is also reflected in great results. It can be seen every year around Finland and Sweden in dozens of locations and more than a hundred projects. Some of our works stand as sculptural landmarks in Pargas, Pasila and Tampere, for example. Much of our work remains completely hidden from view. Underground construction and increasingly demanding groundwork are commonplace in city centres, where work

must be carried out in confined spaces, on tight schedules and with as little disturbance as possible. The more challenging the project, the more we are in our element.

Expertise is appreciated. It is appreciated by our clients who are satisfied with the end result and Kreate's way of acting according to its values with integrity, ambitious, humane and straightforward manner. The NPS promoter rate, which describes client satisfaction in 2023, was very high 70. We are honoured with this feedback and want to continue to act in a trustworthy manner also in the future. Experience is appreciated also by our future colleagues. We employ dozens of trainees every year, many of whom return to us year after year and eventually want to be a permanent part of our team. There is power in the team, and I am proud to be the skipper of such a great team.

Thanks for our success in 2023 go to our personnel. Thank you, every member of our team, for the past year and to shareholders for their trust. We are in good position to continue our journey in 2024.

Timo Vikström President and CEO Kreate Group Plc

Strategy for profitable growth

WE ARE A PROFITABLE GROWTH COMPANY THAT EXECUTES THE MOST DEMANDING INFRASTRUCTURE PROJECTS. WE OFFER SKILLED PROFESSIONALS THE MOST INTERESTING WORKING COMMUNITY IN THE BUSINESS AS WELL AS OPPORTUNITIES FOR DEVELOPMENT.

WE POSITION OURSELVES IN GROWING MARKET SEGMENTS

We continue to focus on projects that require special expertise. We leverage our good market position and aim to grow in the core market segments that particularly benefit from the increased demands in infrastructure construction. These include, for instance, projects carried out in densely built urban environments and demanding soil conditions.

WE STRENGTHEN AND EXPAND OUR CUSTOMER BASE AND SERVICE OFFERING

We aim at growing and strengthening our customer base and service offering. We see growth opportunities in areas such as the Government's transport investment programme and the green transition. Finland's NATO membership and the prevailing geopolitical situation will also increase the need and significance of rail, road and port infrastructure and, for example, airport infrastructure to the north and western borders from the perspective of Finland's security of supply and accessibility.

WE SUPPORT THE STRATEGY WITH SELECTED ACQUISITIONS

In autumn 2022, we expanded to Sweden by acquiring a company with a revenue of EUR 12 million focusing on demanding underground construction. Since then, we have almost doubled our revenue in Sweden. Successful corporate transactions continue to be a way for us to expand and supplement our current capabilities. We focus on profitable companies with a good financial standing whose culture, strategy and values are compatible with those of Kreate. We also aim to complement our service offering with new capabilities.

WE CONTINUE TO IMPROVE OUR OPERATIONAL EFFICIENCY AND PROFITABILITY

We strengthen profitability by ensuring the high competence of our personnel, developing internal cooperation and processes, and through more active risk management. We are more precise about things like contract terms and what projects we offer. We improve operational operations and efficiency, for example, through an annual development programme aimed at improving operational efficiency.

Our business

Kreate's core competence is challenging infrastructure projects that combine high technical complexity with several types of construction, good contract expertise and listening to the customer.

In 2023, 82% of Kreate's revenue came from Structural engineering, which consists of bridge construction and repair, foundation and engineering construction, and the Swedish business, all of which have included large projects during 2023. The share of Transport infrastructure construction was 22%, and it includes the construction of roads, streets, railways and light railways.

Kreate has one reporting segment that includes all types of Kreate construction. Different units – types of construction – work closely together across unit boundaries: One in four of Kreate's projects involves us in at least two different types of construction. The types of construction are presented in more detail on the following pages.

A large part of Kreate's business is countercyclical, which ensures a stable operating environment over economic cycles – more than half of the company's revenue comes from projects commissioned by the state and municipalities. Private sector customers are typically financially sound large companies for which projects such as trade, logistics or industrial buildings are carried out.

Of the revenue, 93% comes from Finland and 7% from Sweden. Kreate expanded to Sweden through an acquisition in 2022, after which the company has almost doubled its revenue in Sweden.

Kreate's reported revenue do not include its half-owned joint venture, KFS Finland Oy, but it is an important part of the company's technical expertise. KFS is involved in 16% of Kreate's projects.

IN ROAD AND STREET CONSTRUCTION, we focus

especially on implementing demanding and extensive projects involving challenging technical dimensions, such as geotechnical structures, several exit ramps and intersections. We often carry out projects in demanding environments, such as street repairs in urban areas. We also carry out demanding water utility construction in Eastern Finland and, depending on demand, industrial infrastructure contracting.

Our projects completed in 2023 include the improvement of highway 19 between Seinäjoki and Lapua, the transfer of the highway and the construction of new municipal engineering in Hervanta, Tampere, and the renovation of the Ilkontie street network and municipal engineering in Kangasala, the construction of lighting and the implementation of piping for telecommunications and electricity operators.

Customers are mainly the state, cities and municipalities. Private sector customer relationships are often related to, for example, construction required by industrial projects.

Urbanisation, the geopolitical situation and the Government's transport investment plans support the stable growth prospects for road and street construction.

Revenue by customer group

OUR RAILWAY CONSTRUCTION activities include construction work related to railways, railway yards, tramways and metros. The projects range from more extensive railway yard renovations to smaller bridge and mass replacement works. Railway construction also covers the electric railway and signalling equipment business.

Our projects completed in 2023 include the railway work on Helsinki's Veturitie, the repair of the Voisalmensaari railway tunnel in Lappeenranta, and the construction of the Juurikorpi meeting point with the extensive Kouvola-Kotka/Hamina railway project.

At the moment, the customer base consists almost entirely of the state, where the Finnish Transport Infrastructure Agency acts as the client for VR's tracks. In the future, cities and municipalities will be an even larger customer group in the market, as several cities have significant railway projects underway or about to start, especially with regard to tramways. Kreate is involved in the development phase of the Koskela depot alliance contract.

Urbanisation and the growth of rail-based public transport, the Government's transport investment programme and Finland's geopolitical position support long-term growth prospects.

BRIDGE CONSTRUCTION AND REPAIR covers both the

construction of new bridges and the repair of existing sites. Our strong experience is reflected in the versatility and complexity of the projects we carry out. We apply our decades of experience in bridge construction in all demanding skill and concrete structures.

Our projects completed in 2023 include challenging bridge work on Veturitie, pedestrian and bicycle bridges crossing Hervanta valtaväylä in Tampere, renewal of the Kiiskijärvi bridge in Virolahti, and repairs to the Köhniö overpass and crossing bridges in Jyväskylä. In addition, the company was working on the Crown Bridges project in Helsinki and the Kirjalansalmi and Hessundinsalmi bridges renewal project in Pargas.

Customers are mainly the state, cities and municipalities, whose mutual share varies from year to year.

Urbanisation, the bridge repair backlog and the Government's transport investment programme support the growth potential of bridge construction and repair.

Revenue by customer group

Revenue by customer group

FOUNDATION AND ENGINEERING CONSTRUCTION

designs and implements foundations, pilings, piling piles, pile slabs and demanding concrete construction related to the construction of demanding urban environments. In addition to high-quality construction, we utilise strong BIM and formwork expertise in comprehensive foundation and engineering solutions that are challenging at a technical level or environmentally.

Our projects completed in 2023 include foundation and concrete construction work for the Katajanokan Laituri business premises and hotel project in the heart of Helsinki, the renovation, reinforcement and sealing of the underground staff facilities of Meilahti Hospital in Helsinki, and the renovation of the Pieksämäki station tunnel.

The customers of foundation and engineering construction are mainly from the private sector. Dependence on cyclical housing construction is low. Turnover related to building construction consists of, for example, groundwork for trade, logistics or industrial buildings.

Increasingly dense urban construction and the growing challenge of construction support the long-term growth prospects of the sector.

ROCK AND CONCRETE CONSTRUCTION implements demanding underground solutions in the Swedish market.

In 2023, the largest ongoing work was a subcontracting contract for a major repair of the Bohusbana tunnels. The section to be renovated was from Stenungsind to Uddevalla, especially the 10 rock tunnels between them and their open cuts. Several concrete, wall and anchoring projects related to the Stockholm bypass were also completed in 2023.

In the Swedish market, our customers are private, but the end customers of projects are often public operators, making the nature of operations stable and highly predictable.

Increasingly dense urban construction and the growing challenge of construction support the long-term growth prospects of the sector. In addition, the Swedish infrastructure market is twice the size of the Finnish infrastructure market, offering a lot of growth opportunities.

Revenue by customer group

OUR SPECIAL FOUNDATION CONSTRUCTION expertise

is focused on our half-owned joint venture, KFS Finland Oy, which is not included in Kreate's net sales, but is reflected in Kreate Group's result as a share of the associated company's result. However, KFS is an important part of our technical expertise, as KFS often carries out special foundation construction work at sites where Kreate also acts as a contractor. KFS is the market leader in special foundation construction work in Finland. Its functions include a wide range of foundation reinforcement methods from retaining walls, anchoring and foundation reinforcements to bore and driving piles, and from jet injections to stabilization.

The projects completed in 2023 include shower pilings and the installation of steel piles related to the renovation of the Pieksämäki station tunnel, as well as steel pipe pilings for the new interlocking equipment building in Järvenpää related to the Helsinki-Riihimäki 2 project. KFS was also responsible for reinforced concrete piling at Kesko's logistics centre, where a total of more than 148 kilometres of piles were laid.

IN THE CIRCULAR ECONOMY, we offer solutions for the efficient utilization, use and recycling of materials as well as for environmental and landfill construction. We use recycled materials as much as possible, such as side streams from energy production plants, to replace virgin soil, and we actively seek solutions that support the circular economy, utilising them both in our own projects and offering them to our partners. Kreate has its own recycling areas, where we accept soil materials and other waste, such as concrete, and process them into recycled materials for use on construction sites.

In 2023, circular economy solutions were utilised, for example, in Veturitie in Helsinki, where the demolition concrete from the old bridge was further processed into crushed stone at the construction site and used on site as a support structure and embankment fillings for Veturitie instead of virgin building materials. We also made efficient use of material flows generated in our nearby contracts, which allowed us to minimise waste and at the same time shorten and make transports shorter and more efficient.

Sustainability

Kreate's sustainability vision is that Kreate has satisfied and competent personnel who carry out even the most challenging infrastructure projects with strong professionalism and safety, building a better and more sustainable society every day.

Measures and indicators aimed at achieving the responsibility vision can be examined from the perspective of social responsibility, environmental responsibility and good governance.

In terms of social responsibility, we actively monitor, among other things, the accident frequency and personnel satisfaction of our personnel, and strive to maintain and increase competence through training and active cooperation with educational institutions, for example.

In terms of environmental responsibility, we aim to reduce our footprint by minimizing the impacts of construction. In practice, this means, among other things, minimising site visits and promoting circular economy solutions within our sphere of influence.

When it comes to good governance, we see integrity, fairness and transparency as essential. In practice, this can be seen, for example, in the fact that we pay taxes in Finland and Sweden in accordance with the conduct of our business, comply with the requirements and recommendations of the Corporate Governance Code for listed companies, and promote ethical practices through communications, training and management, among other things.

Responsibility management

At Kreate, the highest party responsible for sustainability is the company's Board of Directors. In addition to the Board of Directors, the Management Team also discusses responsibility issues regularly and ensures that sustainability perspectives are taken into account in strategy work. At Kreate, responsibility is organised into a financial organisation, and the CFO is responsible for leading the progress of sustainability goals. The company also has a responsibility working group, whose members are responsible for managing operational responsibility. In business units, supervisors guide responsibility work on a practical level, and every member of staff and those working at Kreate's construction site must act in accordance with the ethical guidelines.

Priorities for 2023

At Kreate, sustainability work is largely integrated into the business and its daily practices. Social responsibility is implemented, for example, through occupational safety and human resource management, and environmental responsibility is implemented through work planning and implementation, for example, when construction is carried out as resource-efficiently as possible. In 2023, responsibility work was strengthened especially from the perspective of governance and reporting capabilities.

During the year, the company implemented updated ethical guidelines for the Finnish personnel of Kreate Oy and associated company KFS Finland Oy. The implementation utilised both printed materials and online training, which all employees must successfully complete. By the end of the year, approximately half of the personnel had completed online training – the promotion and training of the Code of Conduct will continue this year, and in the future, the Code of Conduct will become part of the regularly renewed training. During the year, the company also updated its contract templates and in its new contracts requires its subcontractors to commit to the Code of Conduct. In addition, the company introduced a whistleblowing channel through which suspicions of misconduct concerning the company can be reported by name or anonymously.

In 2023, the focus was also on preparing for new legislation on sustainability reporting. Preparations for sustainability reporting were reflected in the strengthening of the organisation with a new IR/ESG position, the company started conducting a double materiality analysis in accordance with the directive, and developed its ability to calculate its scope 1, 2 and 3 carbon dioxide emissions.

The following page presents Kreate Group's sustainability goals, which are linked to the UN Sustainable Development Goals. Our main focus is on Sustainable Development Goals 8, 9 and 11. Goals 10, 12 and 17 are also strongly linked to our business and its impacts.

472	4,23
employees at the end of	employee promoter
2023	score on a scale of 1–5
Lost-time injury	Combined accident
frequency	frequency
2,8	11,0
Completed projects	70
+100	Customer NPS

Sustainability targets

Building with passion	Target-related metrics and target levels	Progress in 2023
Employee satisfaction	• Willingness of employees to recommend an employer, eNPS > 50	• Personnel survey in autumn 2023, where the personnel's employer's willingness to recommend was 4.23 on a scale of 1–5, the NPS measurement will begin in 2024
Occupational safety and safety culture	• Combined accident frequency – target level to be decided during 2024 • Occupational safety observations made in 100% of projects • At least 6 occupational safety observations per person	• Kreate accident frequency (own personnel) 2.8 • Combined accident frequency (own personnel and contractors) 11.0 • Total occupational safety observations 3348, i.e. 7.4 per employee
Increasing competence	• Provide internships at least to 50 students annually • Grow trainees into future colleagues - The goal is that at least every third supervisor and project engineer recruited to a permanent employment relationship has previously worked as a trainee at Kreate • Support career opportunities for personnel: Performance appraisals conducted and white-collar development plans recorded with 75% of employees	• 51 trainees during the year • 5 trainees hired for permanent employment during 2023 • Performance appraisals with 43%
Responsible employer	• 100% of new employees have received orientation • 100% of personnel trained in the company's Code of Conduct • 0 ethical violations	• Code of Conduct updated and online training open, approx. 50% completed • 7 ethical violations detected in 2023
Reducing our footprint	Target-related metrics and target levels	Progress in 2023
Minimizing the impact of construction	• A growing trend in offering circular economy solutions • Increasing the use of circular economy solutions • Receiving and further processing of waste for reuse	• We have received and/or further processed 478 398 thousand tons of construction and demolition waste and soil for reuse.
Tackling climate change	• Set climate targets for the company during 2024	• CO2 reporting capabilities developed starting from Finnish business • CO2 emissions (FI) scope 1: 3,700 tn CO2e, scope 2: 200 tn CO2e, scope 3: 445,800 tn CO2e
Increasing our handprint	Target-related metrics and target levels	Progress in 2023
Sustainable and safe solutions	• Satisfied customer and end user, Customer NPS > 50	• Customer NPS 70 in 2023
Infrastructure projects supporting megatrends	• Growing business operations in the rail environment, share of revenue >15%	• Electric railway and signalling equipment business established • Involved in the development phase of the tram alliance
Corporate responsibility	• We pay 100% corporate taxes to Finland and Sweden	• We paid 100% of corporate taxes to Finland and Sweden

KREATE AS AN INVESTMENT

3 reasons to invest in Kreate

Kreate operates in an infrastructure market that is stable by nature and offers historically safe growth. Kreate's operations emphasise superior technical expertise combined with financially sustainable operations. A strong cash position and balance sheet enable us to reward our shareholders with an increasing dividend.

We specialise in demanding infrastructure construction, which is stable and countercyclical in nature. The more demanding the infrastructure construction project is, the less sensitive the investment decision is to the momentary level of inflation and interest rates. More than half of our revenue come from the public sector, which effectively evens out fluctuations in demand due to economic cycles. Our expansion into the Swedish market diversifies our offering from the perspective of construction types and geographically, which reduces our dependence solely on the Finnish market and reduces risks. Historically, infrastructure construction has grown by about 2% per year. Kreate has grown much faster than the market – for the past 7 years we have grown with a CAGR of 12%.

Growth in a stable and countercyclical market Strong technical expertise with great prospects Good dividend yield

We carry out even the most challenging infrastructure projects with great professionalism and listening to the customer. We aim for above-average profitability in the industry with the help of skilled and motivated personnel, significant references and satisfied customers. We also pay special attention to risk management and financially sustainable operations. Instead of growth, we are primarily looking for better profitability. We look to the future and think carefully about what projects we offer and on what terms. Urbanisation, the green transition and the growth of public transport are examples of megatrends that will support our growth in the future.

We want to be a stable and reliable dividend payer over economic cycles. Our strong cash flow and good balance sheet position enable both growth and dividends. Our target is to distribute at least half of our annual net profit as dividends, taking into account our financial position, cash flows and growth opportunities. For 2023, the Board of Directors proposes another increasing dividend, for the fourth year in a row. The proposed dividend of EUR 0.48 per share corresponds to a dividend yield of 6.6% per share.

Financial targets 2021–2024

GROWTH

Our aim is to grow the revenue to EUR 300 million by 2024 through a balanced combination of organisational growth and selected acquisitions.

PROFITABILITY

We aim for an EBITA margin of more than 5 per cent in the medium term.

GEARING

We aim for a Net debt/EBITDA of below 2.0.

DIVIDEND POLICY

We aim to distribute at least half of the annual net profit as dividends, taking into account our financial position, cash flow and growth opportunities.

Kreate's Capital Markets Day in May

More information available early spring at Kreate's investor webpages: kreate.fi/investors

Information for investors

Kreate publishes its financial information in Finnish and English on its website at: kreate.fi/en/investor.

Release of financial reports in 2024

The interim report for 1–3/2024 will be published on 26 April.
The half-year report for 1–6/2024 will be published on 16 July.
The interim report for 1–9/2024 will be published on 25 October.

Quiet period

Kreate observes a 30-day quiet period before the publication of interim reports, half-year reports and financial statement bulletins. During the quiet period, the company's representatives do not comment on the company's financial standing or any questions related to the overall outlook or meet with investors and analysts.

General Meeting of shareholders

Kreate Group Plc's Annual General Meeting will be held on Monday, March 25, 2024 at 10 a.m. The notice of the General Meeting and other documents and instructions concerning the General Meeting can be found at https://kreate.fi/en/investor/governance/general-meeting/annualgeneral-meeting-2024/.

Notifications of major shareholdings

According to the Securities Markets Act, a notification of major shareholding must be made without undue delay when ownership reaches, exceeds or falls below 5, 10, 15, 20, 25, 30, 50, 66.7 (2/3) or 90 per cent of the voting rights or shares in the company. Notifications of major shareholding are submitted to Kreate by email to: [email protected].

Analysts following Kreate

Mika Karppinen, Danske Bank
Olli Koponen, Inderes

Contact details

For meeting requests and enquiries:

Niina Streng, Head of Investor Relations and ESG, +358 41 732 3362, [email protected]

Timo Vikström, President & CEO, +358 40 074 0057, [email protected]

Mikko Laine, CFO, +358 50 599 9201, [email protected]

[email protected]

CORPORATE GOVERNANCE

Kreate Group Plc Corporate Governance Statement 2023

1. Introduction

Kreate Group Plc ("Kreate") is a public limited company established in Finland, the shares of which were admitted to trading on the official list of Nasdaq Helsinki Ltd in February 2021.

In 2023, Kreate's corporate governance system was based on Kreate's Articles of Association, the Finnish Limited Liability Companies Act (624/2006, as amended) and other legislation applicable to the company. Furthermore, Kreate complies with the Finnish Corporate Governance Code 2020 ("Corporate Governance Code") published by the Securities Market Association, which entered into force on 1 January 2020, and Nasdaq Helsinki Ltd's Rulebook for Issuers of Shares (the "Rules of the Exchange"). The Corporate Governance Code is available on the website of the Securities Market Association at: www.cgfinland.fi.

2. Governance

2.1. General Meeting of shareholders

Kreate's ultimate decision-making body is the General Meeting of shareholders. At the General Meeting, shareholders participate in the administration and supervision of the company by exercising their right to speak and vote.

Kreate's General Meeting decides on matters determined by the Limited Liability Companies Act and Kreate's Articles of Association. Key matters resolved by the General Meeting are adoption of the financial statements, discharging the members of the Board of Directors and the President & CEO from liability, deciding on the distribution of profit, electing the members of the Board of Directors and the auditor and deciding on their respective remuneration. Furthermore, according to the Limited Liability Companies Act, shareholders have the right to submit matters falling within the competence of the General Meeting to be decided by the General Meeting.

Kreate's Annual General Meeting is held annually no later than six months after the end of Kreate's financial year. The notice of the Annual General Meeting must be sent to the shareholders by a notice published on the company's website no earlier than three months and no later than three weeks prior to the Annual General Meeting, but no later than nine days before the record date of the Annual General Meeting.

Kreate Group Plc's Annual General Meeting for 2023 will be held on 25.3.2024.

2.2. Board of Directors

The Board of Directors sees to Kreate's administration and the appropriate organisation of its operations in accordance with the Limited Liability Companies Act. According to Kreate's Articles of Association, Kreate's Annual General Meeting elects a minimum of three and a maximum of ten Board members, and the Board of Directors elects a chairman from among its members. In 2023, the proposals for the composition of the Board of Directors were made to the General Meeting by the Board of Directors.

2.2.1. Duties and operation of the Board of Directors

In accordance with the Corporate Governance Code, Kreate's Board of Directors has prepared a written charter for its operations, which sets out the Board's key duties and operating principles. Furthermore, the Board of Directors annually draws up an action plan for the period between the Annual General Meetings. The Board of Directors evaluates its operations on the basis of the implementation of the action plan. At the same time, the Board of Directors assesses the expectations of Kreate's stakeholders regarding the Board of Directors' operations and considers the extent to which the Board has been able to meet them. The Board of Directors also reviews the timeliness of the Board's charter of operations.

In addition to the duties set forth in the Limited Liability Companies Act, Kreate's Articles of Association, the Corporate Governance Code and the Rules of the Exchange, Kreate's Board of Directors:

• directs and oversees Kreate's management and operations;

annually confirms the charters of the committees of the Board of Directors;
decides on significant matters concerning Kreate's operations;
reviews and approves Kreate's interim reports, annual reports and financial statements;
approves the strategic objectives and risk management principles of Kreate and its business as well as certain Kreate's guidelines and policies and monitors their implementation;
decides on the remuneration of the President & CEO and the Management Team and on Kreate's incentive schemes in accordance with Kreate's remuneration policy;
decides on significant acquisitions, investments and divestments;
defines Kreate's dividend policy; and
is responsible for Kreate's corporate responsibility

Kreate's Board of Directors convenes in accordance with a pre-agreed schedule and as required. In its meetings, the Board of Directors receives current information on Kreate's operations, finances and risks. Minutes are kept of all Board meetings. Kreate's President & CEO and CFO attend meetings of the Board of Directors, unless they are the subject of discussion. However, the Board of Directors convenes at least once a year without the presence of the operational management.

The remuneration of the Board of Directors is decided by the Annual General Meeting, and the remuneration must be based on the remuneration policy presented to the Annual General Meeting. Kreate may temporarily deviate from the remuneration policy presented to the Annual General Meeting if the deviation is necessary to ensure the long-term interests of the company. Deviations are only possible if the remuneration policy specifies which parts of it can be deviated from and which procedures are to be followed in the event of a deviation.

During 2023, the Board convened a total of 14 times. Information on the Board members' attendance in the meetings is presented in section 2.2.2. below.

2.2.2. Composition of the Board of Directors

The members of the Board of Directors must have sufficient qualifications and skills as well as the opportunity to spend a sufficient amount of time working on the Board. Experience and competence that complement each

other is sought for the Board, and Kreate's objective is to ensure that the age and gender distribution and educational background of Board members are taken into account when preparing the composition of the Board of Directors, in addition to experience, competence and industry knowledge. Kreate believes that the composition of its Board of Directors is appropriately diverse.

The General Meeting on 29.3.2023 elected 6 members to Kreate's Board of Directors. Petri Rignell (Chair), Jussi Aine, Timo Kohtamäki, Timo Pekkarinen, Elina Rahkonen and Petra Thorén were elected to the Board.

The following table presents information about Kreate's Board members as at 31.12.2023:

Name	Personal information	Total number of shares as at 31.12.2023		Attendance in Board meetings in 2023
Petri Rignell	Chair of the Board of Directors Serving on the Board since 2015 Born: 1962 Education: MSc Technology Main occupation: CEO of PriRock Oy Independent of the company and its major shareholders	71,940 (1)		14/14
Jussi Aine	Member of the Board Serving on the Board since 2021 Born: 1954 Education: MSc Engineering, MSc Economics Main occupation: CEO of Harjavalta Oy since 2014 and CEO of Puustelli Group Oy since 1999 Independent of the company but not independent of one major shareholder	1,783,689	(2)	14/14
Timo Kohtamäki	Member of the Board Serving on the Board since 2015 Born: 1963 Education: LicSc Technology Main occupation: CEO, Suomi-rata Oy Independent of the company and its major shareholders	15,952		14/14
Timo Pekkarinen	Member of the Board Serving on the Board since 2021 Born: 1973 Education: Construction Engineer Main occupation: Board memberships and investing in the construction industry Independent of the company but not independent of its major shareholders	1,000,000	(3)	14/14
Elina Rahkonen	Member of the Board Serving on the Board since 2020 Born: 1979 Education: MSc Economics Main occupation: CEO of Wulff Group Plc Independent of the company and its major shareholders	2,000		14/14
Petra Thorén	Member of the Board Serving on the Board since 2022 Born: 1969 Education: MSc Economics Main occupation: Boardman Partner Independent of the company and its major shareholders	3,330		14/14

(1) Including indirect holding trough Prirock Oy (69,908 shares) and direct holding (2,032 shares).

(2) Indirect holding through Harjavalta Oy

(3) Indirect holding through Tirinom Oy

2.3. Board committees

The Board of Directors may establish standing committees to assist the Board of Directors in the preparation and performance of its duties and responsibilities, and the Board may also decide on their size, composition and duties. The Board of Directors is responsible for the duties assigned to the committees. The committees do not have independent decisionmaking power; the Board of Directors makes decisions under its decisionmaking power at the meetings of the Board of Directors. The committees regularly report on their work to the Board of Directors.

Kreate's Board of Directors has an Audit Committee and a Remuneration and Nomination Committee

3. President & CEO and management team

3.1. President & CEO

The President & CEO is responsible for managing, supervising and controlling the business operations of Kreate. Furthermore, the President & CEO is responsible for the day-to-day executive management of Kreate in accordance with the instructions and orders given by the Board of Directors. In addition, the President & CEO ensures that the accounting practices of Kreate comply with the applicable legislation and that its financial affairs have been arranged in a reliable manner. The duties of the President & CEO are governed primarily by the Limited Liability Companies Act. The President & CEO shall provide the Board of Directors and its members with the information necessary for the performance of the duties of the Board of Directors.

The Board of Directors appoints and dismisses the President & CEO. The Board of Directors decides on the terms and conditions of the President & CEO's employment, which are specified in the written service agreement.

The remuneration of the President & CEO must be based on the remuneration policy presented to the Annual General Meeting. Kreate may temporarily deviate from the remuneration policy presented to the Annual General Meeting if the deviation is necessary to ensure the long-term interests of the company. Deviations are only possible if the remuneration policy specifies which parts of it can be deviated from and which procedures are to be followed in the event of a deviation.

3.2. Management Team

Kreate's Management Team is tasked with supporting the President & CEO of Kreate in the planning of activities and operational leadership. Furthermore, the Management Team prepares potential investments, acquisitions and development projects. Kreate's Management Team convenes regularly, and it comprises the Vice Presidents of key business functions and service units. The Board of Directors decides on the remuneration of the members of the Management Team.

The following table presents information about Kreate's Management Team members as at 31.12.2023:

Name	Personal information	Total number of shares as at 31.12.2023
Timo Vikström	President & CEO Born: 1968 Education: Engineer, eMBA	41,108
Tommi Hakanen	Executive Vice President, Special Foundation Construction Born: 1978 Education: MSc Technology	16,264
Antti Kakko	Executive Vice President, Bridge Construction and Repair Born: 1977 Education: Bachelor of Engineering	1,380
Jaakko Kivi	Executive Vice President, Technical Office Born: 1971 Education: MSc Technology	32,757
Sami Laakso	Executive Vice President, Transport Infrastructure Construction Born: 1975 Education: Bachelor of Engineering	500
Mikko Laine	Chief Financial Officer Born: 1975 Education: Master of Social Sciences	1,900
Timo Leppänen	Executive Vice President, Railway Construction Born: 1973 Education: Bachelor of Civil Engineering	0
Katja Pussinen	Executive Vice President, HR Born: 1975 Education: MSc Economics	27,463

4. Risk management, Internal control and Audit

4.1. Risk management

Kreate's risk management is based on a risk management policy approved by the Board of Directors, which aims at comprehensive and proactive management of risks. The Board of Directors of Kreate approves the risk management policy and its targets, and directs and oversees the planning and implementation of the risk management. The risk management policy aims at the continuous and systematic identification of the most significant risk factors and their optimal management such that the company's strategic and financial targets are reached. The policy is based on managing the group's overall risk exposure and not just the management of individual risk factors.

Risks are defined as external or internal uncertainties that, if realised, would have a positive or negative effect on Kreate's abilities to reach its strategic and financial targets in a sustainable and ethical way.

Risk management is integrated into the Group's management, monitoring and reporting systems. Risk management covers the identification and assessment of risks as well as contingency plans for all the main risk categories. Kreate classifies risk factors into strategic, operational, accident risks and financial risks.

The risk management measures target the most significant risks through cost-effective and appropriate policy options, including the following:

reducing, sharing or transferring a risk, for example through changes in operations, improved controls, insurance policies or by contractual means;
eliminating a risk, for example by giving up activities that involve an excessive risk, or preparing for the materialisation of a risk, for example with recovery plans; and
accepting a risk without specific risk management measures.

Responsible persons are appointed for risk management measures and tasked with the responsibility for the planning, implementation and monitoring of measures. The specified measures are linked to action plans and monitoring.

The President & CEO has the overall responsibility for risk management. The President & CEO is responsible for organising and the planning, development, coordination and monitoring of the risk management strategy as well as for its implementation and communication throughout the organisation. The President & CEO reports to the Board of Directors. The Group's Management Team is responsible for the implementation of risk management, i.e. the identification, monitoring and assessment of risks and risk-related measures. The Group's Chief Financial Officer is responsible for identifying and assessing financial risks, and reports to the Group's President & CEO.

4.2. Internal control and audit

The Group's outsourced internal audit organisation supports Kreate's management in organising and developing risk management and internal control. Internal audit reports to the Audit Committee of the Board of Directors and, administratively, to the CFO. An annual internal audit plan is drawn up annually and approved by the Audit Committee. The priorities of the annual plan is reviewed during the year.

5. Other information

5.1. Insider management

Kreate has an insider policy with the purpose of establishing clear operating guidelines for, among other things, the management of insider information, maintenance of insider lists and disclosure of transactions by persons subject to the notification obligation.

The insider policy complements the provisions of Market Abuse Regulation (596/2014/EU) and related regulations, Finnish regulations, especially Chapter 51 of the Criminal Code (39/1889, as amended) and the Securities Markets Act (746/2012, as amended), the Rules of the Exchange, the Guidelines for Insiders of Nasdaq Helsinki Ltd and the valid guidelines concerning insider matters by the Finnish Financial Supervisory Authority.

The person in charge of insider matters at Kreate is Kreate's CFO, and Kreate's Financial Controller acts as the CFO's deputy. The person in charge of insider matters performs duties relating to Kreate's insider management, monitors compliance with the obligations under Kreate's insider policy, is in charge of the insider list and the list of persons discharging managerial responsibilities and persons closely associated with them, and carries out the duties related to trading restrictions and notifications of transactions.

Kreate has in place a whistle-blowing procedure that provides Kreate's personnel a way of making a report in case there is reason to suspect that someone employed by Kreate has violated the laws and regulations concerning the securities market.

5.2. Obligation to notify transactions

Persons discharging managerial responsibilities at Kreate and persons closely associated with them have an obligation to promptly notify Kreate and the Finnish Financial Supervisory Authority of their transactions in the financial instruments of Kreate and no later than three business days after the date of the transaction. Kreate discloses the notifications of transactions by means of a stock exchange release within two working days of receiving a notification by a person discharging managerial responsibilities.

The Chair and deputy Chair of the Board of Directors, members and any deputy members of the Board of Directors, the President & CEO and their deputies, if any, as well as the Management Team members are deemed to be persons discharging managerial responsibilities at Kreate.

Kreate maintains a list of persons discharging managerial responsibilities and persons closely associated with them. The list is not public.

5.3. Insider lists and trading restrictions

Kreate maintains a project-specific insider list of all persons who have de facto access to insider information and who work for Kreate under an employment contract or otherwise perform tasks through which they have de facto access to insider information.

The persons included on a project-specific insider list and other persons who are in possession of insider information regarding Kreate are prohibited from trading in Kreate's financial instruments, cancelling or amending an issued trade order, recommending another person to trade in such financial instruments or inducing another person to trade in such financial instruments after receiving information concerning the project.

Persons discharging managerial responsibilities are prohibited from conducting transactions in Kreate's financial instruments on their own account or for the account of a third party before the publication of

Kreate's interim report, half-year report or the financial statement bulletin from 30 days before the publication of the interim report, half-year report or financial statement bulletin until the end of the day of publication (closed window). In case the financial statements include material information that has not been previously disclosed in the financial statement bulletin, such as the future prospects, the closed window also applies to the financial statements. .

Furthermore, Kreate has decided to also apply the closed window to persons participating in the preparation and drawing up of the interim reports, half-year reports and financial statement bulletins of Kreate (company's trading restriction).

Prior to conducting transactions in Kreate's financial instruments, persons discharging managerial responsibilities with an obligation to notify of transactions and persons subject to the company's trading restriction must always confirm with the person in charge of insider matters that there are no impediments to the transactions. A transaction in Kreate's financial instrument must not be conducted before the person in charge of insider matters has approved the transaction, and the transaction must be conducted within two weeks from the approval.

5.4. Principles for related party transactions

Kreate complies with the regulations in force and follows the recommendations of the Corporate Governance Code on the monitoring and assessment of related party transactions. Kreate assesses and monitors transactions with its related parties and maintains a list of its related parties. As a rule, Kreate or other companies within the Group and related parties do not enter into transactions that differ from customary business and are material to the company or that have been made on unconventional commercial terms. Kreate's Board of Directors decides on significant related party transactions.

Kreate's related parties include the Kreate group's parent company Kreate Group Plc, the subsidiaries and the joint venture KFS Finland Oy. Related parties also include Kreate's key management personnel as well as their close family members and the entities controlled by them. Key management personnel include the members of Kreate's Board of Directors, President & CEO and the members of Kreate Group's Management Team.

Kreate reports the related party transactions annually in its consolidated financial statements and, if necessary, discloses the related party transactions in accordance with the Market Abuse Regulation, the Securities Markets Act and the Rules of the Exchange.

6. Audit

Pursuant to the Articles of Association, Kreate has one auditor that must be an audit firm approved by the Finnish Patent and Registration Office. The auditor's term of office begins from the General Meeting that elects the auditor and then ends at the close of the Annual General Meeting following the election.

Kreate's Annual General Meeting held on 29.3.2023 elected the audit firm KPMG Oy Ab as Kreate's auditor,with Authorised Public Accountant KHT Turo Koila as its principal auditor for the financial year 2023. KPMG Oy Ab has acted as Kreate's auditing firm continuously since the Annual General Meeting held on 2.5.2019.

In 2023, the fees paid to the auditor amounted to EUR 138 thousand for the audit and EUR 13 thousand for other non-audit services.

Kreate Group Plc – Remuneration report of the governing bodies

1. Introduction and remuneration principles

This remuneration report presents information on the remuneration of the Board of Directors and the President & CEO of Kreate Group Plc ("Kreate" or "Company") between 1.1.–31.12.2023. Kreate's corporate governance system complies with the Finnish Limited Liability Companies Act and the Finnish Corporate Governance Code 2020 ("Corporate Governance Code") published by the Securities Market Association.

The remuneration of the governing bodies at Kreate is based on the remuneration policy approved with an advisory decision by the Annual General Meeting on 5 May 2021. The remuneration policy will be applied until the Annual General Meeting of 2025, unless the Board of Directors decides to present it to the Annual General Meeting earlier.

The objective of the remuneration policy is to promote the Company's long-term financial performance and assist in implementing Kreate's strategy, in which the Company pursues a position as one of Finland's leading companies delivering demanding infrastructure construction projects. The primary objective of the remuneration policy is to ensure that Kreate applies performance-based remuneration, which rewards the implementation of Kreate's strategy in a transparent and understandable way.

The remuneration policy is based on the following key principles:

providing a competitive earning opportunity for overall remuneration;
emphasising performance-based remuneration by establishing the overall remuneration of the President & CEO such that part of the earning opportunity is based on performance-based incentives; and
emphasising a strong connection to the interests of our shareholders such that part of the earning opportunity for the President & CEO's annual variable remuneration may be based on long-term share based incentive plans.

The remuneration policy has been prepared to follow the remuneration practices applicable to all of Kreate's personnel. This is reflected, for example, in the variable remuneration earning criteria, which are derived from the company's strategy with the aim of supporting the Company's profitable growth and which are partly shared by the President & CEO as well as all the other personnel.

2. Development in the revenue and result as well as the remuneration of the members of the Board of Directors, President & CEO and personnel 2019-2023

The tables shown below present the development of Kreate's revenue and result for the period 2019–2023 as well as the development of the remuneration of the members of the Board of Directors, President & CEO and personnel for the period 2019–2023.

(EUR million)	2023	2022	2021	2020	2019
Revenue	320.0	273.9	237.6	235.3	221.1
Change (%)	16.8 %	15.3 %	1.0 %	6.4 %	14.9 %
Result for the period	3.9	5.6	6.9	7.8	8.7
Change (%)	-31 %	-18 %	-11 %	-11 %	129 %

(EUR thousand)	2023	2022	2021	2020	2019
Remuneration paid to the Chair of the Board(1)	63.0	58.5	60.0	54.0	54.0
Change (%)	7.7 %	-2.5 %	11.1 %	0.0 %	-5.3 %
Remuneration paid to ordinary members of the Board	30.0	25.5	25.5	9.0	8.2
Change (%)	17.6 %		0.0 % 183.3 %	9.8 %	28.1 %
Remuneration paid to the President & CEO	460.5	551.0	518.0	427.0	323.0
Change (%)	-16.4 %	6.4 %	21.3 %	32.2 %	3.9 %
Remuneration paid to Kreate's employees, on average	75.6	64.0	66.0	64.0	60.0
Change (%)	18.1 %	-3.0 %	3.1 %	6.7 %	5.3 %

1) Other remuneration and benefits paid to the Chair of the Board include the remuneration paid to PriRock Oy, a company controlled by Petri Rignell, in accordance with the consulting agreement between Kreate and PriRock Oy. The consulting agreement between PriRock Oy and Kreate ended in December 2020.

3. Remuneration of the Board of Directors in 2023

The Annual General Meeting of Kreate decided on 29.3.2023 that the following fees are to be paid to the members of the Board of Directors: The Chair of the Board is to be paid a monthly fee of EUR 5,250 and the other Members of the Board are to be paid a monthly fee of EUR 2,500.In addition, the Annual General Meeting decided that an additional yearly fee of EUR 1,500 is paid to each member of the Board of Directors elected as the Chair or Member of the Audit Committee or Remuneration and Nomination Committee and that reasonable travel expenses are reimbursed according to invoices.

The following table presents the remuneration paid to the Members of the Board 1.1.–31.12.2023.

2023	Position in Board	Yearly fee (EUR)
Petri Rignell	Chair of the Board, Chair of the Remuneration and Nomination Committee	63,000
Jussi Aine	Member of the Board, Member of the Audit Committee	30,000
Timo Kohtamäki	Member of the Board, Member of the Remuneration and Nomination Committee	30,000
Timo Pekkarinen	Member of the Board, Member of the Remuneration and Nomination Committee	30,000
Elina Rahkonen	Member of the Board and Chair of the Audit Committee	30,000
Petra Thorén	Member of the Board and Member of the Audit Committee	30,000

4. Remuneration of the President & CEO in 2023

The remuneration of the President & CEO comprised a fixed base salary including taxable fringe benefits, short-term performance bonus, long-term incentive plan (LTI) and pension benefit.

In 2023, the President & CEO's fixed base salary including the fringe benefits grew year-on-year and was EUR 369,883.34.

At the beginning of 2022, the Board of Directors set the short-term performance bonus criteria for the President & CEO, on the basis of which a performance bonus of EUR 90,623.37 was paid to the President & CEO in 2023.

Kreate's maximum short-term performance bonus for the President & CEO remained unchanged in 2023 at 71.5 per cent of the fixed base salary including the fringe benefits. In the performance bonus plan, the criteria set by the Board of Directors for 2023 were the Company's indicators for profitability (90% weight), indicators for working capital management (5%) and indicators for occupational safety (5%). The performance bonus will be paid according to the actual figures in the financial year 2024.

In 2021, the Board of Directors of Kreate Group Plc decided to launch two new long-term share-based incentive plans for the key persons of the Group and the Group's joint venture.

The Performance Share Plan 2021–2024 consists of 2 two-year performance periods, the calendar years 2021–2022 and 2023–2024. Each performance period is followed by a two-year restriction period. The company's Board of Directors decides on the plan's performance criteria and the targets set for each criterion at the beginning of each performance period. For the 2021–2022 performance period as well as 2023–2024 performance period, the bonus is based on the Group's cumulative operating profit (EBITA), Kreate's total shareholder return (TSR) and the completion of the company's strategic goals.

The share bonus plan offers the key persons in the target group an opportunity to earn shares in the company by converting into shares a portion, decided by the Board of Directors, of the performance bonus earned for 2023 within the performance bonus plan. A performance bonus converted into shares is multiplied by a bonus multiplier decided by the Board of Directors before the payment of the bonus; for 2023, the multiplier was 1.5. A possible bonus within the share bonus plan is paid after a two-year commitment period in 2026 partly in shares in the Company and partly in cash. The purpose of the cash portion is to cover the taxes and tax-like charges incurred due to the bonus by the key person. In connection with the payment, the key person is credited for the dividends paid and other possible funds distributed during the commitment period.

Furthermore, the President & CEO is entitled to a supplementary pension paid by the Company. The date of withdrawal is at the discretion of the President & CEO, but the supplementary pension can be withdrawn at the earliest from the age of 58. The supplementary pension is based on a money purchase scheme. The President & CEO is also covered by the Finnish statutory pension system.

The following table presents a summary of the remuneration paid to the President & CEO during 1.1.–31.12.2023.

EUR thousand

Fixed base salary including fringe benefits	370
Performance bonus	91
Supplementary pension	58
Total	518

Board of Directors

Master of Science (Technology) Board member since 2015, Chair of the Board

31 December 2023

Petri Rignell Jussi Aine Timo Kohtamäki Master of Science in Engineering, Master of Economic Sciences Board member since 2021

Licentiate of Science (Technology) Board member since 2015

Construction Engineer Board member since 2021

Timo Pekkarinen Elina Rahkonen Petra Thorén Master of Science (Economics) Board member since 2020

Master of Economic Sciences Board member since 2022

Management Team

31 December 2023

Timo Vikström President & CEO Master of Engineering – Meng, Construction, eMBA Management team member since 2017

Jaakko Kivi EVP, Technical Office Master of Science (Technology) Management team member since 2018

Timo Leppänen EVP, Railway Construction Bachelor of Civil Engineering Management team member since 2021

Sami Laakso EVP, Transport Infrastructure Construction Bachelor of Engineering Management team member since 2021

Antti Kakko EVP, Bridge construction and repair Engineer (MSc) Management team member since 2022

Mikko Laine CFO Master of Political Sciences Management team member since 2022

Katja Pussinen EVP, HR Master of Science (Economics) Management team member since 2017

Tommi Hakanen EVP, Special Foundation Construction Master of Science (Technology) Management team member since 2020

In the picture from left to right: Jaakko Kivi, Mikko Laine, Timo Leppänen, Katja Pussinen, Timo Vikström, Sami Laakso, Tommi Hakanen and Antti Kakko

FINANCIAL REPORT

Report of the Board of Directors

Kreate is a Finnish group focusing on demanding infrastructure construction. Kreate's service offering is divided into Transport infrastructure construction and Structural engineering. Transport infrastructure construction includes railway construction as well as the construction of roads and streets. Structural engineering includes bridge construction and repair, foundation and engineering construction, special foundation construction and the Swedish business, which consists of demanding rock and concrete construction. In addition, Kreate offers circular economy services in Finland. Kreate's goal is to be one of Finland's leading implementers of demanding infrastructure construction, offering comprehensive solutions for demanding infrastructure construction projects with the help of a wide range of expertise and a range of services. The aim is also to strengthen its foothold in the Swedish infrastructure market, especially in technically demanding infrastructure construction projects in the greater Stockholm area, and to grow the Swedish operations into a second pillar of business in addition to Finland. In 2023, more than 90 per cent of the Group's revenue came from Finland.

Kreate is an industry-leading company in Finland particularly in bridge and foundation construction both in terms of volume and expertise. The Group's operations are guided by strong basic values through which it offers solution-driven services, high quality and cost-efficiency to its broad range of clients. The customer base includes both public and private operators.

Kreate Group consists of the Group's parent company Kreate Group Oyj together with its 100% owned subsidiary Kreate Oy and its 75% owned Kreate Sverige Holding AB, whose subsidiary is Kreate Sverige AB. In addition, the Group has a Finnish joint venture KFS Finland Oy, in which the Group owns 50 per cent, and a Swedish associated company Karell Schakt AB, in which Kreate Sverige AB owns 34 per cent. In 2023, the following changes took place in the Group structure: Kreate Rata Oy was merged with Kreate Oy and EstRock AB with Kreate Sverige AB.

STRATEGY FOR 2024 AND FINANCIAL TARGETS

Kreate executes well-functioning comprehensive solutions in infrastructure construction in a solution-oriented way, particularly focusing on offering projects that are technically difficult or that require special expertise. Kreate aims at being a profitable growth company with an entrepreneurial spirit and the most attractive employer in the industry.

A clear strategy that aims at continued profitable growth

1. Positioning in growing market segments

Kreate leverages its good market position and grows in the core market segments that particularly benefit from the increased demands in infrastructure construction. These include, for instance, projects carried out in densely built urban environments and demanding soil conditions.

2. Strengthening and expanding the customer base and service offering

The company aims at strengthening its customer base and service offering. We see growth opportunities in areas such as the Government's transport investment programme and the green transition. Finland's NATO membership and the prevailing geopolitical situation will also increase the need and significance of rail, road and port infrastructure and, for example, airport infrastructure to the north and western borders from the perspective of Finland's security of supply and accessibility.

3. Supporting the strategy with selected acquisitions

Kreate has successfully carried out corporate transactions, which are a way to also expand and supplement its capabilities in the future. In corporate acquisitions, Kreate focuses on profitable companies with a good financial standing whose culture, strategy and values are compatible with those of Kreate. The company also strives to complement its service offering with new capabilities.

4. Continuous improvement of operational efficiency and profitability

We strengthen profitability by ensuring the high competence of our personnel, developing internal cooperation and processes, and through more active risk management. For example, we are more precise about contract terms and what projects we offer in the first place. In order to improve the operations and efficiency, the company has implemented an annual development programme designed for this purpose.

Kreate is currently reviewing its strategy and financial targets, the results of which will be published by the company during spring 2024. The company will also organise an Investor Day in the spring - more information about the event will be posted on the company's investor website https://kreate.fi/en/investor/investors/.

Financial targets 2021–2024